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📄 Contents

  1. The Internal Benefits of Clear, Consistent, and Valued Identities
  2. The External Benefits of Clear, Consistent, and Socially Valued Identities
  3. The Virtuous Cycle
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The External Benefits of Clear, Consistent, and Socially Valued Identities

The external benefits of identity are not fundamentally different from those that are primarily internal, and the two are mutually reinforcing.

Recognition

In an economy where many competitors offer comparable products and services, it is important for firms to make themselves easily recognizable to customers, prospective employees, investors, and opinion makers. Companies such as Starbucks, IKEA, and The Body Shop have achieved high levels of external recognition through a unique combination of physical aspects (design of outlets, visual identity), product selection, marketing strategies, and corporate values. Bang & Olufsen has distinguished itself from all other makers of consumer electronics through consistent emphasis on design, careful management of the brand and the distribution network, and projecting to the outside world its unique philosophy and management practices (relaxed working atmosphere, care of its people).

A firm that enjoys a high level of recognition thanks to a unique and valued identity does not need to promote itself in the usual ways to relevant constituencies.

Attractiveness and Loyalty

A clear and positive identity acts as a magnet for employees, customers, investors, and other business partners who are attracted to deal with the firm. The process creates a sort of halo effect and enables the firm to build a loyal audience in the circles whose input it needs for its survival and growth. For example, when it has achieved a high level of external recognition, it is much easier for the firm to attract new talent.

Trust and Predictability

With a consistent identity, a firm can nurture a feeling of trust among its employees, customers, and investors. Employees know who their employer is and do not fear overnight changes in corporate goals, strategies, and management practices. Customers come to and keep buying from the firm because they trust it and expect it to stand behind its products and services. Investors support and remain loyal to the company because they perceive it as reliable and predictable.

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