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BRANDING: The Magic Bullet 24 nwflbusinessclimate.com APRIL 2009 By Chip Henderson Marketing paradigms are shifting. Photo copyright bigstockphotos.com Consumers and technology are evolving at a rapid pace. And the economy is becoming a tougher, more competitive landscape. Many businesses are struggling to adapt to the ever-changing marketplace and are searching for the magic bullet to solve their marketing and sales woes. Once reserved for corporate boardrooms and strategy sessions with marketing and advertising agencies, branding has become today’s business buzzword. It seems as if everyone is getting in on the branding discussion these days, even consumers. Smart companies are listening. With the right insight, planning and execution, the magic bullet may very well be branding. Brand Definition Just a few years ago, identity was all the rage. Before that, a funny word icon was in vogue. It seems that the advertising industry was trying to elevate the value of a logo. Many agencies focused on the aesthetic, creative parts of the marketing process: designing logos, brochures, ads, etc. As companies began to examine their return on investment (ROI), agency services evolved to include consulting aspects and strategies that would yield It’s kind of like what people say about you when you are not in the room. Tropicana recently “rebranded” its juice products, introducing new packaging just months ago. The redesign caused a stir among loyal consumers who didn’t care for the new look. Customers on social networks referred to the packaging update as “generic” or a store brand. Tropicana was not in tune with its consumers’ brand ownership and were caught off guard by the reaction. To Tropicana’s credit, they heard what consumers were saying and they quickly reintroduced the old design. The Benefits of Branding There are many benefits to having a brand. Branding allows a company to differentiate itself from its competitors by creating and reinforcing a relevant and meaningful position in the consumer’s mind. A strong The first rule in defining your brand is to be truthful. Take a cold, hard look at your organization and be honest. economic and market impact. What we all discovered is that having a logo does not mean you have a brand. While the term branding has become more mainstream, a lot of confusion exists surrounding the actual meaning of the word. A brand is not a logo, company name, marketing tagline or an advertising campaign. While these elements impact branding, they are merely visual expressions or symbols of the brand itself. A logo assists consumers in recognizing your brand. David Ogilvy is widely known as the father of advertising and created successful campaigns for Schweppes, Dove, Rolls-Royce and American Express (Don’t Leave Home Without It) to name a few. Ogilvy defined a brand as “the intangible sum of a product’s attributes: its name, packaging, price, its history, its reputation and the way it’s advertised.” My simple definition of branding is “everything you do.” Okay, that’s a lot, but it really is true. Branding is what your logo looks like. It’s the design of your letterhead and external forms (such as invoices, memos or fax cover sheets). It’s the message conveyed in your marketing materials (ads, brochures, web site, etc.). It’s the way you answer your phone. It’s the quality of goods and services you provide. Branding is the impression, feeling or meaning that your product or service leaves on a customer. It’s how people feel and think of their experience with your company. It’s what a customer would say about your company when describing it to a friend. 26 nwflbusinessclimate.com APRIL 2009 brand elevates a product or service from being a commodity. A commodity is a product or service that a variety of companies can provide and the buying decision is solely based upon the lowest price. For instance, most people purchase gas based on price. As the purse strings tighten, price is becoming more of a factor than ever. Today, banks, hospitals, attorneys, restaurants, telephone companies and the like are being seen as commodities. Which bank has the lowest fees or loan rates? Which telephone company has the lowest long distance charges? A well-defined brand creates a unique impression of your company and compels people to do business with you. Recognition & Loyalty A unique, recognizable brand name and logo will go a long way in making your company relevant to current and prospective customers. Branding will make your company easily recognizable and memorable in your prospect’s mind. Having an established identity can easily mean the difference between a no-sale and a sale. When faced with a choice among similar, yet unfamiliar products, customers are more likely to choose the product produced by the brand they trust. If a customer is happy with their brand experience, they tend to be loyal re-purchasers and are hesitant to try other brands. An Image of Strength & Size A strong brand projects a professional image and establishes credibility for your business. Since branding is traditionally associated with larger companies that are well capitalized and have staying power in the market, having a professional brand in place can make your business look larger than it is in reality. An Image of Quality When comparing two identical products, only one of which is branded, the branded product is almost always seen as the higher quality item. Branding must be based in truth in order to remain effective and build over time. An Image of Experience & Reliability A well-conceived brand identity creates an image of a business that has been around longer than it really has and one that has expertise in its field. People want to purchase goods that are well made and services that are reliable. Great branding can help you put your customer at ease and evoke trustworthiness. Cross-Selling Opportunities If your brand is truthful and relevant, you can reap many rewards from your existing customer base by cross-selling additional goods and services within your brand. It is easier and less costly to increase your business with existing customers that are known than it is to target and convert the unknown masses. Defining Your Brand Photo copyright bigstockphotos.com The first rule in defining your brand is to be truthful. Take a cold, hard look at your organization and be honest. Use the following questions as a guide to define your brand: 1. What is the mission of your company? 2. What are the core values of your company? 3. What products and/or services do you offer? List the qualities of each. 4. Who is the target market for each product and/or service you offer? 5. What does your company specialize in? 6. What is your company’s personality? Is your company innovative, creative, energetic, sophisticated, traditional, conservative? 7. How do your customers describe their experiences with your company? When considering the questions above, you will ultimately need feedback from within your organization, but don’t fall into the top-only approach. A common pitfall is to only take management’s viewpoint into consideration. You need to involve employees and shareholders from APRIL 2009 The Magazine of NW Florida’s Business 27 all levels, especially your frontline people. They are the primary liaisons with your customers. Input from current and prospective customers often leads to revelations beyond the expected. During a focus group for a local credit union with which my company was consulting, members (their current customers) revealed that they neither understood nor related to the market position that had been previously implemented. It’s amazing what you can find out if you just ask. It is also important to research your competition and develop a competitive analysis. You need to know what customer’s mind is known as positioning. You want to be the first choice based on attributes that are so compelling that price alone is not the determining factor. Coke is the Real Thing. Volvo is the safe car. BMW is the Ultimate Driving Machine. Nike is Just Do It. Do You Need A Logo? While it is not absolutely necessary to have a logo in order to have a brand, it sure makes the marketing job a lot easier. A logo is one step in your branding process and, remember, customers view branded products as Make sure that your logo is custom and that you own all rights to the finished design. your competition is doing, what their strengths and weaknesses are, and what their customers think. By doing a little recon work, you can better differentiate your business and refine your products and services. higher quality and worth more. Your logo is usually the first impression a customer has of your business, so make sure you invest the resources necessary to develop a professional image. Marketing Position A few tips on developing a logo: It’s time to get customers (current and prospective) to fall in love with your brand. So, what’s love got to do with it? Everything… if you plan to develop brand synergy between your company and your customers. Branding and good marketing create emotional connections that are difficult to break. Advertising Age recently published an article using ‘love’ as an analogy for the branding process. To illustrate his point, Al Ries, the article’s author explains, “Falling in love with a person is an emotion that has consequences that can last for years. People don’t usually fall in love a second time without falling out of love first. Falling in love with a brand has similar consequences. Just because you run across a ‘better’ brand doesn’t necessarily mean you will switch.” Think about it. This really makes sense. If you have an emotional bond with your customers, it is like getting a divorce if and when a customer switches brands. As a consumer, I am in love with ‘my’ brands: Apple, Samsung and Disney. Your interest in exploring other brand options is suppressed, if not eliminated, when you love the brand that is number one in your mind. Being first is a powerful position to be in. This emotional connection is hard to beat. So, if you are the number two or other number brand in a given category, your brand will most likely be based on attributes or advantages rather than emotion. The concept of establishing your brand in your Find a designer or agency that has an extensive portfolio of logo samples. If there is a vast body of work that is excellent, they will more than likely be able to create a great symbol for you. Print, clip and save samples of logos that you like from other companies. They don’t have to be in your industry. This is not an effort to copy but to determine your personal style. Share information about your company, the brand personality, your customer base and your competitors. A professional developer will take that information into account and conduct research on your industry prior to beginning the design process. Commission the development of original art for your logo. Some designers and online services utilize ‘clip art,’ borrow graphics from another source, or even re-sell designs to other companies. Make sure that your logo is custom and that you own all rights to the finished design. Confirm that your name and logo are unique and that there isn’t a potential infringement. I always check the United States Patent and Trademark Office web site (www.uspto.gov) to search for any possible conflicts. If there is any doubt, consult a trademark attorney and determine if you need a formal, professional search. Your logo should work well when blown up on a billboard or reduced in size to fit on a ballpoint pen. It should also work as well in black-and-white as it does in color. Prior to final sign off, you should view various sizes and color options 28 nwflbusinessclimate.com APRIL 2009 of your logo to ensure that your logo will meet your needs. Developing A Formal Marketing Plan Your brand is defined, you know your brand position and you have a great logo. A great brand is meaningless if no one knows about it. Now what? A formal marketing plan is critical to your branding success. Situation Analysis This is a snapshot of where your business is in terms of size, customer base, products and services, market share and sales. Research Both primary and secondary research will help you shape your plan. Know your competition’s strengths and weaknesses, understand what makes your target market tick and follow market trends so that you can stay ahead of the curve. Marketing Goals & Objectives Marketing is often mistaken as sales. Not true. Marketing is a mixture of strategic planning, target market development, advertising, public relations, sales promotion, etc. It’s the big picture, umbrella plan that encompasses everything you do to communicate your brand and generate results. Marketing goals must be specific, measurable and realistic. One goal for a bottled water distributor may be to increase residential sales in a specified geographic territory by 20 percent by end of year. Target Market In order to effectively develop advertising plans and other communication materials, you have to know to whom you are speaking. As business owners, we want to market to the world; we want everyone to buy our product or service. Unless you are Disney, you probably don’t have Advertising Goals & Objectives The objective of your advertising plan is to generate interest in your product or service among a specified target market and create a strong desire for that consumer to take action. Advertising should be designed to assist your business in achieving its marketing goals. In our bottled water distributor example, one advertising goal may be to communicate to 50 percent of the residents of the specified territory at least three times and generate inquires from 25 percent of those reached. Advertising & Media Tactics Quite simply, this means the method(s) you choose to employ to deliver your message to the desired audience. Most successful advertising campaigns utilize a media mix comprised of one or more elements such as direct mail, email, television, newspaper, radio, billboards, etc. Specific tactics are chosen based on budget resources, a clear understanding of the demographics and psychographics of your target market and the ability of a particular tactic to reach your intended audience. Based on the goals outlined above, our bottled water company does not need to reach the entire community. Therefore, a more targeted tactic such as direct mail or email campaign would be more effective in this case. I firmly believe in an integrated media mix presenting a consistent brand message and/or call to action. Each media has inherent strengths and weaknesses and should be evaluated based on its ability to reach your target market with enough frequency to generate the desired impressions in a cost-effective manner. A seasoned media buyer can alleviate the burden of fielding sales calls, evaluating media options and negotiating best placement and price for businesses across the board—and, in most cases, will not cost any more than purchasing directly from the media. Advertising should be designed to assist your business in achieving its marketing goals. the capital to market to everyone, and, in reality, not everyone wants to buy your product or service. Our bottled water company may want more residential customers, but they need to target their ideal customers: the ones with the ability to buy. Based on research, the list of prospects can be narrowed down based on their income, education level, home value, etc., so that they reach the greatest number of qualified prospects with as little waste as possible. Budget Once your goals are in place at all levels, formulate your budget. I don’t believe there is a true, accurate percentage of sales upon which to base your budget. I’ve seen businesses commit 3-5 percent of their annual budget to marketing, while others stretch upwards beyond 15 percent. The approach I recommend is to go back to your goals and determine what it’s going to take to do APRIL 2009 The Magazine of NW Florida’s Business 29 everything you need to do to reach your market. Then tally the numbers. Based upon this ‘ideal’ budget, what sales can you expect to achieve and does that number justify the investment? If not, adjust accordingly, scaling back and eliminating as appropriate. Evaluation This is the most skipped part of many marketing plans. Return on investment (ROI) is often difficult to manage and somewhat subjective depending upon your company size, territories, sales force, customer interfaces, etc. However, evaluation on a regular basis allows you to check and adjust your plan before its too late. I prefer a monthly evaluation that recaps the specific month, the quarter, the year and the last five years. This will give you insight in terms of budget spent during each of these timeframes, where sales leads and inquiries are coming from, and what results (sales) you have gotten along the way. The Bottom Line Branding, when done right, can be the magic bullet to build and sustain your business. It creates preference, builds loyalty and ultimately creates market value, yielding a strong customer base. Happy, loyal customers tend to cost less to serve, are less price-sensitive and increase their spending over time. This treasured group also tends to be your greatest source of referrals, in essence creating an outside sales force. In good times and in bad, you can always count on loyal customers to feed your economic engine. About the author: Chip Henderson is President/CEO of Emagination Unlimited, Inc., a full service marketing and advertising consulting firm. He has more than 20 years of experience in brand management, strategy development, marketing planning, creative direction, media buying, public relations and special events planning. Chip is past president of the Pensacola Bay Area Advertising Federation, the Pensacola Chapter of the Florida Public Relations Association and the Northwest Florida American Marketing Association. Visit www.EmaginationUnlimited.com or email: [email protected] for information about marketing and advertising strategies. Photo copyright bigstockphotos.com Branding, when done right, can be the magic bullet to build and sustain your business. 30 nwflbusinessclimate.com APRIL 2009