The Value of Branding

In a growing industry having preferred status with customers is essential. A Sioux Falls, S.D., company has developed a way to help renewable energy companies define their brands and distinguish themselves among their competitors.
By Rona Johnson | July 08, 2008
What's it worth to a company or a product to have preferred status? For example, when most people think of jewelry, Tiffany's comes to mind. And if those people had a choice they would purchase jewelry from Tiffany's as opposed to "Ralph's" or some other name that they've never heard of.

"What if you decide you want to get into the jewelry business and you have an opportunity to buy the Tiffany's brand, but all you get are rights to the name and their famous blue boxno jewelry and no stores?" asks Tim Kubista, chief executive officer and brand strategist for Elements, a Sioux Falls, S.D., company that specializes in helping companies develop brands. "The market values it at $5 billion but that's not the point."

The point is having preferred status is priceless.

"Companies with a well-defined brand will find that they have increased market share, preferred status with customers, increased valuations, reduced employee turnover and often a very well-defined culture with employees aligned around a common purpose," Kubista says.

You may not have heard of Elements because the company has only been in the renewable energy business for a few years, but you may have heard of some of their clients such as Davenport Dryer LLC, Reznick Group, a national public accounting firm, US BioEnergy Corp., which merged with VeraSun Energy Corp. in March and Outland Energy, a wind services company.

Kubista decided to focus on renewable energy because it's an industry that's growing fast, and that's where having preferred status really makes a difference. "If it was 20 years ago and I was an ethanol producer I would have been one of only a handful and there would be no need to really pay attention to your brand because everybody who is anybody in ethanol knows who everybody is," he says. "But today everybody is clamoring for attention. There are more ethanol producers, more trade shows and conferences. So how does a company stand out among all of the noise, all of the clutter that's going on?" And, like many in the renewable energy business, Kubista wants to make the world a better place to live. "When we asked ourselves what we could do that is going to have some meaning in 20 or 30 years that led to renewable energy," he says.

The Process
Branding is more than just coming up with a catchy name and then splashing it all over the airwaves and in print. It's a process that starts with having a well-defined brand and ultimately leads to preferred status. To become well-defined, a company has to know who they are, what they stand for and why people want to do business with them.

Branding works because most buying decisions are based on emotions not facts. "When you talk about a brand you are talking about the emotional qualities," Kubista says. "Think of the car that you drive. Did you buy that car because of the wheel base or the size of the engine or any of the features or benefits? You probably bought it for some nonrational reasons. You might have felt good in it. You might have imagined that, Hey, I look good in this car.'"

The first step that Elements takes in working with a company to define its brand is to visit with senior leadership. Then they do what Kubista defines as a "deep dive" into their business in what's called brand essence discovery. This is where they find out the organization's true purpose. "Oftentimes many of the companies we work for, sure they want to
make money, but they really believe they are going to make a difference in how things are done with regards to energy production in America," he says.

The next step is talking with the company's various audiences, which is different for every company and could involve customers, vendors, employees, the government, a community or other stakeholders. "We can interview people and learn how they tick and how they make decisions, and we can build a brand and messaging around that in ways that are very appealing to them," he says.

In doing this, Elements tries to ascertain if there are any gaps between what the company thinks it does best and what everyone else thinks it does best. "Let's say we meet with company senior executives and they insist that what is so great about their company is their technology," Kubista says. "Then we go talk to their customers and we find out that the reason they buy from them is because they ship on time. You see there is a gap. What they are really good at is delivering on their promises and that's what their potential customers expect, so that's what our messages are going to revolve around."

When Kubista talks about messages he's not just referring to advertising. These are messages that have to permeate within the whole company before they can be broadcast outside of the company. "I don't care if it's five employees or 500, everyone needs to understand what the company's core competencies are," he says. "What's the essence of the business? What's the core truth? If people who work for the company don't understand what the company's core competencies are, there's no way they can connect with the outside world and communicate those messages."

Throughout the process people within the company will begin to understand their own decision-making processes, determine what threats they face and identify opportunities. "Once that's done it's time to talk to the outside world," Kubista says. "The company will have a guiding strategy that it can align its business with, and it will be crystal clear how they can communicate their visual, verbal and what we call their auditory identity."

Finding a Purpose
Kubista readily admits that Elements developed its branding process by accident. "I would love to tell you it was some stroke of brilliance but it wasn't," he says. "We just stumbled on it. We probably put ourselves through our own process and didn't even know we had it. In other words we just asked ourselves, What's our purpose? Why are we even doing this?'"

With its unique branding process and its ability to attract clientele, Elements seems to have found a home in the renewable fuels industry. A little persistence also pays off. "Their business development manager was pretty persistent that we give them a shot at doing some branding for us," says Robert Nixon, president of Davenport Dryer LLC, which supplies steam tube dryers to ethanol producers. "We'd seen them at the shows several times. They knew we were real and they gave us a proposal that made a lot of sense to us. Much of our advertising and branding has been pretty consistent with everybody else in the industry and their credentials were good."

Nixon says his company was interested in distinguishing itself from other dryer manufacturers and their message is that they are leaders in what they do and that their dryers can make dramatic difference to an ethanol producer's bottom line. "One of the first plants that we were inand you will see that in advertisementsthey are saving $10 million in energy over a direct-fired dryer system," Nixon says. The ad, which appears in the July EPM, features a testimonial by Brad Davis, general manager of Corn LP a 55 MMgy ethanol plant in Goldfield, Iowa.

"Now that the ethanol industry is maturing and the plants are getting much more sophisticated, and with natural gas prices rising, there was a fairly dramatic shift in interest and we
want to be at the forefront of that," Nixon says. "Branding can help put us there and Tim's efforts have been pretty good to date."

Although their advertisements are already running, Davenport Dryer isn't finished with the branding process. Nixon says they are in the middle of the process and he expects they could spend another 12 to 18 months making sure their message is consistent.

Every client that Elements works with has different needs and thus the process they go through will differ. "Sometimes we get hired, we get them launched and they are on their own," Kubista says. "We have other clients who we stay with and help them out."

So what is the value of branding? Simply put by Elements' principal and brand strategist Carmen Swartz in a paper called "Brand: What It Is and How It Can Give You an Advantage:" "A great brand not only drives sales, it adds material value to the business. Brand is as much an asset as employees, facilities or computer networks. According to estimates, the average market value of well-branded companies is about 70 percent greater than the value of their tangible assets."

If Elements is successful in communicating its message to the renewable energy industry it will have preferred status. "The whole topic of brand communications is something I'm very passionate about, and it's my desire that more people understand it," Kubista says. "Hopefully over time the industry can see the potential."

Rona Johnson is the features editor for Ethanol Producer Magazine. Reach her at or (701) 738-4962.