Branding is no longer limited to groceries or cosmetics.

According to James Twitchell, professor of English and advertising at the University of Florida, nonprofits—even cultural or educational institutions—need to brand in the same way profits do. He discusses three specific nonprofits in his book Branded Nation: The Marketing of Megachurch, College Inc., and Museumworld.

B&S: What is Branded Nation‘s contribution to the concept of branding as storytelling?

James Twitchell: I’m an English teacher, so storytelling is different to me than it is in the commercial world. Essentially, storytelling generates feeling. Commercial storytelling applies this emotionality to a thing as opposed to a human character. It may be a story about Coke as opposed to Pepsi or McDonald’s as opposed to Burger King. But we’re connecting to sensations, not objects.

Do you agree with the notion that branding is first and foremost about the spirit of a product or service?

Yes, especially in relation to luxury products. They’re ordinary things that have been spiritualized. They’re just shoes, handbags, purses, scarves, ties—things you could buy at Kmart. “Luxury” is the only thing separating them (the quality might be superior, but not always).

Marketers have tapped into the human response to religion; owning these designer products feeds our need to feel special or redeemed.

Explain the Diderot Effect and how it relates to brand coherence.

According to the story, Dennis Diderot, a seventeenth century French philosopher, bought a new dressing gown. Since his old furnishings and clothes didn’t match his fancy new gown, he decided to buy new ones—and replaced everything from wallpaper to paintings to slippers.

This phenomenon is part and parcel with modern consumption. You buy the Armani shirt, and then you have to have the Louis Vuitton purse and the Prada shoes. In other words, things fit together in constellations and ensembles.

How do you recommend older nonprofit organizations rediscover the essence of their brand?

In the realm of branding, there’s no difference between colleges, museums, philanthropies, and Proctor & Gamble. As long as you have a large number of suppliers in the market, the process of branding inevitably follows. The story you tell is the experience you provide. You separate yourself not by the product, but by the spirituality, which is the branding.

The Dip is inevitable in every great venture. You start out high on adrenaline, and then things don’t go as planned. The campaign doesn’t deliver the results you hoped for, the new business doesn’t scale, your enrollment or membership hits a plateau.

You’ve hit the Dip, says Seth Godin. And the key when facing a Dip is knowing when to quit and when to keep at it. In this interview with CZ, Godin explains why quitting is actually a good thing.

B&S: Quitting is important to success, you say. But organizations are notoriously bad at quitting activities that no longer work. Why such resistance?

Seth Godin: Nothing gets done in an organization without a meeting, and meetings about quitting are downers. They are associated with layoffs or failure. So they don’t happen. They get put off. It’s easier not to rock the boat, to let it ride.

Quitting a business venture often comes because of a lack of capital. You run out of cash. But you seem to believe that quitting in the dip goes much deeper than that. How so?

Why did you run out of capital? Is it because you didn’t plan for the Dip? Probably. We avoid thinking about it or talking about it. If you pick a project with a Dip you can make it through, your life gets a whole lot better.

You talk about the importance of being the best in a category, and how the world is getting smaller as well as bigger. How do you create your own micro-market? It seems the hard part isn’t being the best, but creating the new category so you can be the best.

Exactly!

McDonald’s and Starbucks did it. So did Motown and a thousand others. That’s the art of it. There’s no easy answer, except to try.

So what’s wrong with not being the best?

Superstars get a premium. Superstars can make more sales while they spend less on marketing. My point: if you have a choice, why not be first? And you usually have a choice.

It seems really hard to anticipate the emotions that swirl once you hit the Dip. Any advice?

The Dip is GOOD. It’s your friend. Without the Dip, you’re on a cul de sac, a dead end. If there is no Dip, you should quit. When the Dip arrives, have a party.

Most people don’t escape junior high without reading Robert Frost’s “Road Less Traveled” in which the speaker contends that when “two roads diverged … taking the road less traveled by … made all the difference.”

In marketing, taking the road less traveled means launching a new brand, rather than extending a brand name; it’s called diverging. To diverge is to notice a hole in the marketplace and then build a completely new brand. Al Ries, co-author of Positioning, and author of the new book The Origin of Brands, trumpets the power of diverging—for both small and large organizations:

B&S: How do you define divergence?

Al Ries: A brand category tends to split up over time and become two or more separate categories. The best example of this is computers. Initially, a computer was a mainframe computer. Nobody called it a mainframe, though, because it was the only kind of computer there was. Now, we have mid-range computers, personal computers, laptops, notebooks, servers, and many other distinct categories of computers.

How do you not lose out?

Al Ries: You create completely new brands. Back in 1921 when Alfred P. Sloan took over General Motors, they had 12 percent of the market. Sloan laid out brands to match what he figured were five emergent categories: Chevrolet, Pontiac, Oldsmobile, and Cadillac. At one point in time, GM had 52 percent of the market.

Look at the success of Lexus. What if Toyota had called the Lexus a Toyota Supreme or Toyota Ultra? Would the premium Toyota be the leading luxury car brand in America today? Would the Mercedes owner trade in a Mercedes for a Toyota? I don’t think so.

So the key is to think more narrowly.

Al Ries: Right. Most people want to broaden it instead of narrow it.

A good example of divergence in action goes back to right after World War 2. Every town in America had a coffee shop, in which you could walk in blindfolded, spin around and point to something. You take the blindfold off and whatever you pointed to you could build a brand around.

If it hit hamburgers, you start McDonald’s. If it hit coffee, you start Starbucks. If it hit chicken, you start Kentucky Fried Chicken. If you hit ice cream, you start Baskin Robbins.

As time went on, the coffee shop disappeared, although almost every item on a coffee shop menu has become a powerful brand, making multi-millionaires out of many people. And they didn’t get to be multi-millionaires by combining something. They got to be millionaires by dividing something—looking at a segment of a market and building a brand around that segment.