Insuring Your Brand
According to American research, our brains respond just as powerfully to strong insurance brands as to strong automotive brands.
While this research evoked surprise as insurance is considered a “dull’ area compared to such consumer status symbols as cars – it did show the powerful psychological pull of a brand.
A brand - or trade mark - is the way people remember you - it’s what makes you stand out from others and it’s what gives you your market edge.
The branding of the insurance industry as a whole is currently under review by the Insurance Council of New Zealand concerned that there is public perception of insurance as a solely financial sector. This review will ultimately be used to look at re-branding the insurance industry as one that helps “restore” the lives of communities and individuals.
So, it’s likely that over the next few years insurance companies and even brokers will be looking at redeveloping their brands to better serve new perspectives. Consider VERO, formerly Royal and Sun Alliance, which has recently spent millions on rebranding to create its distinctive and bold new bull on a red background brand – which stands out in the market.
While brand development can be a costly process if done with diligence, it creates a core business asset with huge wealth potential. Brands not only provide market status, distinction and a competitive edge, but reduce promotional costs, allow premium pricing and effectively increase cashflow.
With such wealth potential it makes sense to protect brands as you would any other tangible business asset. Thus brand protection is a form of business insurance. Unprotected brands are vulnerable to ‘piggybacking’ by others looking to latch onto a company’s market edge. Brands can also cause legal disputes between companies if there are similarities. Consider AMI and AA Insurance. The similarities between the two brands with use of the colour yellow have led to proceedings in the past. While both still use the colour yellow now the rebranding of AMI to “Am I?” and the new stylization of its AMI logo has no doubt lessened confusion between the two companies.
So doing due diligence is crucial to creating a distinctive and exclusive trade mark that isn’t going to step on the toes of another company.
Insuring your brand
One of the main legal ways of protecting a brand is by trade mark registration under the Trade Marks Act 2002.
There are limits on what can be registered as a trade mark, but in general, it’s important to know that the more unusual and distinctive your brand is, the easier it is to legally protect.
Registering a trade mark provides exclusive rights to the owner to use that mark and prevent others from impinging on your brand. The owner of a trade mark can sue someone who uses that same mark or something similar to it on the same or similar products.
However, if a company invests heavily in a brand which is not distinctive enough from other brands in the market, a court is much less likely to be convinced that another’s brand should be stopped from using similar words, colours etc. Investment will be wasted if your brand features are not sufficiently unique.
Ultimately, you want recognition and exclusivity with your brand and legal protection helps you achieve that.
Brand development
Before investing in brand development, there are two key factors to consider – can you use it safely and can you stop other people from using it?
Search the Trade Marks Register for already protected brands to ensure what you are doing is not ‘too similar’ to another company’s brand.
Being original as possible in your brand is one of the best ways to avoid stepping on another company’s toes. Some of the most successful trade marks are made up words – consider the likes of KODAK, KLEENEX, PEPSI to name a few. There are many tricks to making up words that represent your brand such as onomatopoeia, joining words, clipping etc.
Third-party licensing
Once you have a registered trade mark, it can be licensed to a third party, a useful tool for expanding your business and its financial returns. For small insurance companies and brokers especially, licensing provides a low-cost means of growing a business without having to front up with costs – consider the Mike Pero and Adam Parore Mortgages franchises.
However, as any arrangement allowing another party to use your trade mark can impact on the reputation and value of your brand. There are many factors to consider and it’s advisable to seek professional advice in granting a licence to a third party. Some of the issues include:
- Setting clear boundaries on what you are licensing, and what the other party can do with your trade mark
- Imposing quality controls to protect the value of your brand such as prohibiting the use of other trade marks, symbols or devices in conjunction with your trade mark
- Outlining ways in which you can control and protect your brand such as ensuring you can terminate the licence if the licensee is not performing by setting minimum performance obligations (such as minimum sales) and set clear termination rights.
Ultimately, your trade mark is the way people remember you – so do not underestimate its importance. It does not make good business sense to select a mark which you cannot use or protect or will be confused with another trade mark. So, the best advice is to get some expert advice in the selection and protection of your trade mark.
By Elena Szentivanyi. An edited version of this article appeared in CoverNote Magazine, January 2009.
