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Introducing Entrepreneur's Top Brands of 2014: Learn Their Secrets

This story appears in the April 2014 issue of Entrepreneur. Subscribe »

Brand is one of those perfectly good words that has picked up a lot of baggage over the past decade. At one point, it simply meant the label used to signify a product. Chiquita bananas. Ford cars. Coca-Cola. Now we talk about personal , political brands and . And even though the conversation around brand has become bloated with jargon and gobbledygook, its importance can't be oversold. Marketing guru Seth Godin defines brand as "the set of expectations, memories, stories and relationships that, taken together, account for a consumer's decision to choose one product or service over another."

Entrepreneur set out to learn from its readers why certain brands elicit their respect and engagement. What our survey revealed is that brands that deliver on their promises, that consistently give consumers the highest level of service and best product--not just star-studded commercials or marketing hype--topped the list. Brands that think, feel and act like entrepreneurs, those that push to keep pace with customer demands and changing technology while staying true to their core principles, were the most respected. We also found some common themes and lessons among our top brands.These days a brand is the sum of a company's marketing efforts, customer experiences, its emotional impact and how it places itself in the culture. It's a mark of quality and status. In other words, it's the reason one company succeeds and another company fails.

Disrupt, but with purpose.

Tech companies talk constantly about disruption, and in the digital world, where pixels are cheap, that's fine. For and service brands, however, disruption just for the sake of change can spell disaster. When it is done right, though, a good game-changer can help a brand stand out and even create its own niche.

At the time the French company , which topped our list, came to the U.S. in the late 1990s, shopping for cosmetics and perfume meant going to department stores where representatives from various parfumeries would give customers the hard sell. Sephora, however, opted to bring all the brands into one stylish shop and let customers browse in peace, sampling scents and nail polish at will. It was a big change for the perfume companies, too.

"Originally, bigger brands were not comfortable selling in our environment, so they didn't," says Julie Bornstein, executive vice president and chief marketing and digital officer of Sephora. "So we carried up-and-coming brands and were able to cultivate new trends. As we became more successful, we were able to win over the bigger brands, but we protected the DNA of our original concept."

Bahram Akradi, founder of Life Time--The Healthy Way of Life Company, the highest-ranking fitness brand on our list, is also a fan of disruption, as long as it has a clear purpose. "Don't change things for the sake of change," he says. "If you're constantly innovating to delight your customers, disruption follows. Do the right thing."

When Chanhassen, Minn.-based Life Time innovated its no-contract policy and money-back guarantee for members, the move flipped the fitness industry's traditional model on its head. "Some old friends thought I'd lost my mind," Akradi says, "but demanding that people sign the longest possible contracts was designed to benefit businesses, not customers."

The idea that customers could choose to renew their memberships every month energized Life Time trainers to earn member loyalty, creating real relationships between employees and customers.

Sephora is always trying to improve the , too, and that means continuous innovation. In recent years it unveiled Color IQ, a device that measures skin tone and helps customers find the perfect products and shades from Sephora's huge lineup. Most recently, the company partnered with designer Marc Jacobs on an exclusive cosmetics line and acquired a scent research company that will help it develop a "digital fragrance experience." It's a far cry from a bored cosmetics-counter clerk spraying White Diamonds into customers' eyes.

"I think the one thing that is unique about Sephora is that innovation is at the heart of our brand," Bornstein says. "With anything we do, we move fast, and we're focused on how to create new experiences for clients. They are at the center of everything we do."

Good branding is expensive. Great branding can't be bought.

Many of the top brands have little or no budget dedicated to marketing, or they don't distinguish it from other initiatives, such as sales or service. Instead, the best brands rely on something much more precious--authenticity. They deliver on their brand promises--whether that means providing good value, friendly service or consistent food. But they do it in a way that shows a genuine interest in serving the customer.

"The key is to act on what matters," says Phil Cordell, global head of focused service and Hampton brand management for Hilton Worldwide, whose Hampton Inn is No. 38 on our list. Cordell talks a lot about the "table stakes" given to businesses, especially those in industries in which sales are decided in large part on price. Hampton is constantly tinkering with its offerings, last year adding power strips in its rooms and this year planning to upgrade the breakfasts served in its lobbies.

And if you've ever seen a hotel bedspread under ultraviolet light, you know that Hampton's decision to wash the duvet covers after every stay was impressive--and the company drives the point home to its guests with personality, in the form of a handwritten sticky note on the bed frame announcing that the linens have been freshly laundered.

Hampton's recent "Hamptonality" campaign is starting to stick, proving that delivering through authenticity is within reach of any company.

The customer is the only thing that counts.

There are endless stories about exceptional service. A waiter at the Ritz-Carlton in Dubai--another of our top brands--overheard a guest lamenting the fact that his wife couldn't make it down to the beach because she was in a wheelchair. The next afternoon, the couple found a wooden walkway built just for them.

Cordell remembers a bride-to-be who tried to steam her wedding dress by hanging it on a fire sprinkler and ended up flooding the hotel. When she said she was dissatisfied with the inconvenience, Hampton made good on its guarantee and comped the entire bridal party. Later that year, Hampton signed a corporate travel deal with a Fortune 10 company; turns out the decision-maker had been part of the wedding group and was blown away by the hotel's extraordinary service.

But a focus on customers is not about press-worthy anecdotes or fixing complaints aired on . It's about institutionalizing constant change to meet developing customer needs. At Hampton, that means focusing on its people and culture.

"Brand is about spirit, not just execution," says Cordell, who shares a seemingly endless list of tools he uses to communicate with the company's hotels and, perhaps more important, empower them to share ideas with one another.

It's a powerful entrepreneurial idea to think of employees and partners as "customers." "We're not geniuses, and we don't have the world cornered, but I do know that focusing on making that emotional connection with employees and customers is what pays off," Life Time's Akradi says.

Bornstein agrees that making customers feel like they are part of something special is behind much of her company's success. Sephora has built on that through its investment in social media; it is not only active on Facebook and Pinterest but has launched its own social platform, Beauty Talk, where customers can learn makeup tips and techniques and get recommendations from fellow users. Getting customers to engage, even when they aren't necessarily opening their wallets, is what differentiates a good brand from a great brand.

It can't be all about the money.

Trained as an engineer, Akradi is always looking for problems before they happen. Every day, he and his staff improve their products, services, gym layouts and traffic flow based on customer experience and feedback. It's a tremendous amount of work. "As soon as you don't think you have to do that, there will be another guy who wants it more," he says. "You need to be passionate."

This might seem like a fairy tale for entrepreneurs who face an ugly, every-day grind just trying to stay afloat or break even. But for a to really work, something else has to inspire it. Though money is a great reward for hard work, a brand has to fulfill a larger purpose, too, whether it's Chipotle spreading more humane animal practices, Patrón staying true to ancient processes or Apple putting design on equal footing with tech. This is true for startups as well as for the leadership and teams at multibillion-dollar brands.

It shows itself when Sephora's customers are allowed to sample and play with products, then walk out of the store not just without a hard sell, but with the feeling that they're welcome back anytime.

That larger purpose is something a brand needs to stay aloft through tough financial times and setbacks, and through the long years it can take to succeed.

After all, a brand without passion is just a logo--and even terrible companies invest in those.

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