Reilly Newman | Did you know your business can have a brand deficit? Although the term “deficit” quickly reminds us of budgets, debt, and other bad things, its weight is just as important for the health of your brand and I believe this term can save your business.
Deficit is a perfect fit for describing an unhealthy brand. Why? Since brand is perception, then there can be a gap between how your brand is currently viewed by your audience and how you wish they viewed your brand. This is a gap between the current state and the desired state.
Similar to the gap between the revenue and expenses in a budget, when the expenses overwhelm the set budget spending based on the revenue, there is a gap between the current state and the desired budget state. A budget deficit!
A Brand Deficit works the same way. When the gap between your desired state is too wide from where you currently are budgeted, it creates a chasm that feels impossible to cross. This gap can apply to the perception and health of your brand because the brand is in “debt” from where it aspires to be. The “cost” of the gap is too wide because your current state is too far from where you aspire to be. The only way to solve this deficit is through — first — the acknowledgment of the deficit, and then followed by the willingness to transform.
These points are important because this gap is not static. Just as a brand can close the gap and become who they aspire to be, the gap can continue to widen as the perception of the business slips further and further away from the brand they desire. The deficit pulls the business further into the abyss as the brand erodes with time.
Brand Bridge
The journey “from this to that” is a bridge to help clear this ever-growing chasm. Just as a financial advisor may help a business overcome their revenue-to-expense deficit with plans, steps, or materials that recover, resolve, and reinforce, a brand needs a bridge to clear the gap.
Ultimately, a brand deficit can only be overcome through a complete transformation. This is not only an internal change of behavior and positioning but an outward signaling of this change that aligns to fix the deficit and, more importantly, get to the next level that is sought after. This is an identity change.
Just as James Clear writes in Atomic Habits, “…you can’t get too attached to one version of your identity. Progress requires unlearning. Becoming the best version of yourself requires you to continuously edit your beliefs, and to upgrade and expand your identity.”
For our actions and behavior to change as a business, we must transform our identity. “The more pride you have in a particular aspect of your identity, the more motivated you will be to maintain the habits associated with it.” Mr. Clear then goes on to explain how these actions, habits, and behaviors support the upgraded identity of who we are becoming and (soon) fully become. Brands are no different.
The bridge you construct to clear the gap is through a transformation that empowers your business to shift, pivot, invest, and grow closer to the new level as the identity is upgraded. The decisions, actions, and behaviors of the business will then follow which compound this identity to reach the aspired level of the brand. This is how we get from this to that.
>>Find out your Brand Deficit Score with our Quick Scorecard: Survey Quiz Link
Brand Deficit Impact
The pain inflicted by a brand deficit can take many shapes and forms, but here’s a consolidated list:
- Relevance Gap: A brand deficit could signify a gap between customer expectations and what the brand currently delivers. This might include outdated positioning, messaging, or aesthetics that no longer resonate with the target audience.
- Equity Decline: It could also refer to a decline in brand equity, where brand loyalty, recognition, or value has eroded over time, perhaps due to inconsistent branding, lack of innovation, or poor customer experiences.
- Strategic Misalignment: A brand deficit might describe misalignment between the brand’s purpose or values and its actions, leading to lost credibility and weakened brand identity.
- Competitive Weakness: In a competitive analysis, a brand deficit could highlight the areas where a brand falls behind its competitors, identifying specific weaknesses in market positioning or differentiation.
One or multiple of these could be decaying your brand and damaging your business as the gap grows between your current state and where you should be. The deficit in these scenarios isn’t an immediate pain that you’ll feel, but rather a slow, gradual decline that could actually be quite comfortable. The business can be just coasting along and leadership gets cozy as the gap claims more ground and leaves your brand deficit for another day.
A weak brand might not immediately show obvious losses but can erode long-term value in ways like lower customer loyalty, weak market positioning, or missed growth opportunities.
This is by far what makes it so dangerous. Like financial debt, the burden grows and the can is kicked down the road as the responsibility is put off. We sometimes will pretend it isn’t there or don’t know how to deal with it as the debt and deficit continue to grow and grow and grow…
Like financial health, brand health isn’t just one-and-done. It must be monitored and refined. It must be part of the identity change so the entire system can upgrade. This includes striving for that ideal place we wish to be. Going from this to that means we must take steps toward that. This is the only way we can be transformed and our brand can upgrade.
