An extravagance no sales-minded company can do without.
December 15, 2013
Your business needs every advantage it can get, not just in rough economic periods, but at all times. However, these needs become more pronounced when, like today, there are fewer buyers and no-less competitors. That’s where your distinctive brand can step up and separate your company and products from the rest – resulting in maximum sales from marketing expenditures – yes, even in bad times.
I know, I’ve heard the advertisers who say “Brand development is just too much of a luxury right now, I need sales.” Well, where do sales come from? I think, from consumers, who can choose your offering from a herd of very similar appearing competitors. And when many of them are shouting: “Buy our products – no, buy our products – or yelling ‘half off’ – buy our products ‘Red Tag’ sale – buy our products…the buyers perceive that all brands must be alike. So, they conclude “ I’ll take the least expensive.” At this point, your product or brand has just achieved “Commodity” status – price is your only measurement of value.
Retail automotive dealers are notorious for these approaches so consumers simply scan ads looking for the nameplate they are interested in that is offered at the lowest price. The retailer has no advantage without the lowest price. As a matter of fact, cannot really compete without a price advantage. Most dealer sales meetings focus on how to create a limited offering with little on no margin just to get potential buyers in the door to be sold a car with some profit in it. (You’ve all seen the disclaimer that reads “only 3 left at this price.”)
According to a McKinsey Quarterly article, (Managing Through a Downturn) published in September 08, “Financially sound companies should lift investment to gain strategic advantage over competitors.” Equally important are tactics such as recruiting talent from weaker players and investing in more precise market execution. The article goes on to include promotion as an effective recessionary period policy. It also suggested that companies with weaker financial health must focus on getting more from existing sales resources. Indeed, the key driver of economics is sales. It should be noted, however, that none of this advice will generate more sales or a faster recovery without first creating a unique distinction for your company and products. Without this separation from the pack, you are simply increasing your investment (marketing and promotion) for the entire category.
Creating that distinction is not the hocus-pocus, voodoo or secret solution that only global branding firms can facilitate. Smaller advertisers should not be inhibited from getting going. First of all, brand development is not branding. Brand development is the discovery of a company’s unique evidence of distinction and the creation of a memorable way in which to communicate it. Branding, then, is the tactical application of that distinction in all communications materials for both internal and external execution. And here’s the good news: once that distinctive message is developed, the whole marketing process will be streamlined and as a result, be more economical – no recreating the wheel every time a new ad or promotion is needed. And, this good work can be provided by any number of trained, qualified, and certified brand development specialist – check out The Brand Establishment’s list of Certified Brand Strategists who specialize in small to mid-sized advertisers.
No, brand development in not just for the Coke’s, Walmart’s and GM’s of the world. All retailers, manufacturers, professional services organizations, even non-profits need to distinguish themselves from all competitors or they will pay more for marketing and get less in return. And, according to the same McKinsey article: “Economies may be sluggish, but this is no time to hunker down and wait it out. Thoughtful executives use economic downturns to position their company for superior performance in the years ahead.”
Now, skeptics will say “yes but, I still need to be price competitive.” And I say yes you do. However, a well-established brand can offer its products in half-off sale and it will appear to be a unique and rare opportunity, rather than just another commodity. After all, how many of you wait for the Nordstom semi-annual sale? Admit it – consumers see it as an opportunity, not a red flag that the company is going out of business.
So what about brand development being a luxury? I think it is an extravagance no sales-driven organization can afford to do without.
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