- August 17, 2014
- Posted by: Madrigal Admin
- Category: Business Info Blog
I was involved in an online discussion about the use of the word leverage in marketing. I was surprised that quite a few participants considered leverage to be a weasel word – that is a word that sounds good but really doesn’t mean anything.
In its original, physical sense, leverage is the advantage gained by converting a weak force over a long distance into a strong force over a short distance. A lever is a long pole that is used to lift an object using a fulcrum.
Lever comes from the Latin word levare meaning to raise (fulcrum also comes from Latin and originally meant the post of a couch or bedpost). This Latin root, levare, crops up in a wonderfully diverse set of words but all with a common sense of something being raised:
- A levee is a raised embankment that stops rivers overflowing.
- To levy is to raise funds; originally referring to the collection of taxes.
- Leaven is a substance, usually yeast, added to dough to make it rise.
- To levitate is to rise, or cause to rise and hover in the air.
- Elevate is to lift to a higher position or raise to a higher level or status.
- The Levant is the Mediterranean lands east of Italy, so called because it is in the direction from which the sun rose.
In the financial sense leverage refers to the amount of debt used to finance assets, for example, a company with significantly more debt than equity is considered to be highly leveraged.
In the marketing sense leverage is less well defined and used rather loosely. However it relates to the power or ability to influence people or their buying decisions. So leverage in marketing relates very closely with concepts like brand and reputation. The stronger your brand the more leverage you have in selling products.
It is apparent in major brands selling a wide range of products – it is not the quality of the individual product that sells it but the reputation of the brand. This is where leveraging is very tangible, when companies make the most of their brand to sell a range of products. It is also evident in the power of celebrity advertising – using well-known people to sell products is leveraging their reputation to the product brand.
The case for using leveraging in the marketing sense is legitimate and not really very weasel like.