BRANDING’S BOTTOM-LINE IMPACT
During 2017, I wrote articles on choosing the right market segments, competitive positioning, building customer value propositions, lead generation, maximizing promotional dollars and right pricing. By now, I hope you realize that all these aspects of Marketing are designed to do one thing. They are to greatly strengthen the organizational brand in the eyes of customers and to expand the appeal to potential ones. Choosing the right customer, effectively differentiating with product and messaging (promotion and price), undoubtedly leads to unwavering customer commitment. Going further, when a customer ties its self-image or prowess to the image your brand represents, there is nothing more powerful or lasting.
Many wonder why Callaway Epic Pro Golf Clubs can sell for up to $1800 a club or a woman’s Luis Vuitton handbag can demand $1,500. The short answer is – monumental branding. It’s very likely there is superior product craftsmanship involved and the best materials are used. However, keeping this in mind, can one really justify a 10 to 20-fold price differential? These two examples are chosen to highlight the heightened influence branding makes on purchasing decisions. Yet it should be noted, that brands don’t have to be expensive to enjoy a loyal following. Declarations are made on brand allegiance every time one goes to the grocery store or even fills up with a tank of gas.
A company’s brand tells its customers who they are, what they do, why they do it, and who they do it for. It is the promise made to your customers and sets expectations for future, on-going interactions. Effective branding, attributes goods and services with certain positive and unique qualities or characteristics that are attractive to the target audience. Robust branding offers significant rewards that can enormously impact the bottom-line. The benefits are best described in the chart below.
Branding in the Industrial Marketplace:
The question arises as to whether branding is as important or even realistic in the industrial marketplace. I fervently make the case that branding efforts may have more weight in an industrial setting because the company has a greater chance of separating from the pack. This is due to having fewer manufacturers razor-focused on the activity. Top tier industrial companies with dominance in their fields, make a practice of optimizing and exploiting branding opportunities. Examples of industrial companies with strong brand recognition include, Caterpillar, GE, BASF and CSX.
While solid branding of these companies may not be as glamorous as others, they offer the same tangible benefits as noted above. The biggest difference in Industrial branding is that the desired product or company association with the brand is more complex and not as well defined. It can also be abstract in nature. This often means branding efforts will be longer to take hold by the audience. It may also mean greater market resources may be needed which can significantly increase expenses. Branding goals for most manufacturers are to conjure up the following about their products:
- Superior performance (accurate and reliable)
- Application breadth and depth
- Enhanced safety features
- Utility efficient
- Competitive total cost-of-ownership
- Ease of use (including troubleshooting)
- Low maintenance
As with any organization seeking to enhance its marketplace branding, there should be market consistency and a realistic time expectation to reach a visible market crescendo. Organizational activities that are also vital ingredients to improving the brand are:
- Commitment to its promotion. For industrial companies, promotion must include traditional avenues (i.e advertising, digital marketing and tradeshows). And should also involve risk mitigation promotional strategies that address performance capability. These include, promoting performance through customer testimonials, customer application/industry reference lists, pilot programs and noting adherence to quality standards and testing. This type of performance promotion is required because of the customer’s production environment has little tolerance for errors and downtime.
- Regular audits should be conducted (quarterly or bi-annually) on the brand image – with customers, the organization’s leadership & employees. Key questions to ask are:
- Does our company stay in the forefront of the mind of our customers? If not, why not?
- Are there positive sentiments associated with the company and its products and services? What actions can we take to further strengthen these sentiments?
- Has there been recent events that have tarnished the brand? If so, what corrective actions have we taken or will take to reassert market position?
- Are we living up to customer brand expectations?
- Does our brand continue to represent our value proposition(s) to the target audience?
- Does the company’s target audience have a clear impression of the company vision, products and markets served that help distinguish the brand?
- Is our technology and ways of doing business keeping pace with the market, allowing our brand to remain strong?
- Do we have a 90-day action plan to further our brand in the minds of our customers?
- How will we determine branding enhancement success for implemented initiatives?
Keep in mind, the last two points are the most overlooked with branding efforts. Make sure to ask the right branding questions and then execute on a chosen plan! Follow it up with concrete measurements that will lead to an honest branding assessment and refined approach. There is also ever-increasing market noise which has the potential effect of weakening one’s brand. This makes branding engagement now imperative.
Good Branding Has Staying Power:
Unless you change your products or the way you market them (i.e. switch channels), or the customer changes in some profound way, for example has altered their market direction, the customer will usually stay cognitively tied to your product. There are caveats to this brand loyalty truth, it is whether you’re keeping pace with market trends and whether your competitors’ branding has remained unchanged. An example of keeping up with market trends for branding purposes, is having the ability for customers to purchase your product online like your competitors offer or having the latest imbedded product safety features. The second point, on competitor’s branding movements are the ‘new and improved’ or constant product upgrades being rolled out by them.
What is the ultimate goal of branding? How do you know when you have captured the branding prize? It’s when your branded product is so tightly associated with the product in question, that it’s often used synonymously to describe the product category. For example, Kleenex is inserted in place of tissue or Googling for Internet searching. If that happens, your branding has reached its pinnacle. Congratulations, you cannot get much better than that. Happy Hunting!