Is Their Perception Your Reality? Find out if your branding efforts are making a positive impact on your customers.

Many years ago, I owned a toy company. At the time, I heard an interesting philosophy on packaging: You should design your toy's package so artfully that when children opened it and touched your product, they were just a little disappointed. Maybe this sold more toys in the short run, but I guarantee it didn't in the long run because when perception trumps reality, your brand is the loser.

That's why it's so important to know the market's perception of your brand. What do your current customers think of you? What do potential customers think of you? Most importantly, are these perceptions accurate? In other words, how close is your brand identity (who you are) to your brand image (who people think you are)? It's an important question that's often overlooked.

Ideally, your brand image and identity are the same. Unfortunately, it rarely works out that way--at least not without a lot of time, effort and flexible decision-making. Most small businesses spend the majority of their branding efforts strategizing how they want to be viewed and communicating their vision via advertising and other promotional vehicles. They spend very little time following up to see if they're making progress or if they should be headed in a different direction entirely.

Here are a few simple ways you can assess where you stand in your customers' minds:

1. Contact customers you've gained within the past year and ask them why they chose your brand. Granted, it's not always easy to ask a customer to rate your product or service. Worse yet, it can be difficult to get an honest answer. Interviewing customers is often like peeling an onion: You take it one layer at a time. It requires time and patience, as well as an attitude that makes your interviewee feel they can safely give any answer.

2. Call current customers and ask them what differentiates you from your competition. Another way to approach this is to ask customers the first thing they think of when they consider your brand, then the first thing they think of when they consider a competing brand. Again, this takes time and patience. You may be surprised at their answers, but accept them without argument. Remember, you are researching perceptions, which may or may not be true, but are valuable nonetheless.

3. Are you getting repeat business? Look for commonalities in the types of customers who are coming back to your brand. Contact them to get a feel for the source of their brand loyalty. Hopefully they're returning to your brand for reasons you include in your advertising. If not, reconsider your brand promise.

4. Is your business growing by referrals or word-of-mouth? This is always a good sign. Publicity is more valuable than advertising because it hasn't been paid for. What others say about your brand carries more weight than what you say.

5. Follow up on lost sales. Contact customers who chose a competitor over you and attempt to learn what led to their decision. Frame your call in nonthreatening terms and communicate upfront that it's not a sales pitch.

6. Can you recite your brand promise or mission statement off the top of your head? Branding should play a role in all aspects of your business. If your mission isn't guiding every decision, there's a disconnect somewhere.

The more market research you can conduct, the better. You don't have to spend thousands of dollars to learn what your market thinks, but you do have to spend time and energy.