You need a brand

by Max Carey

The opportunities to sell value-added products and services at value-added prices are greater today than ever before.

Since most buyers believe there’s not much difference among competitors’ products, the method of bringing your product to your customers will be more important than the product you bring. If you ignore this brand-identity phenomenon, the only way you can prosper in the commodity market battle is through volume and economies of scale. You will forever labor in a marketplace dictated by price and delivery. Given that your customers can buy your product or service from numerous sources, they will competitively negotiate you down to the lowest common denominator. You will become the victim of increasing predatory pricing pressures.

Worse still, you will face the challenge of every new competitor who comes along. Not a way to gain price points, margin and profit.

Identify intangible value
Company attitudes and plans are moving from a short-term to a long-term focus. Businesses are asking more of vendors. And vendors no longer see selling as one transaction after another.  Instead, there has been a shift to advisory relationships.  Companies that have entered into beneficial relationships to integrate different areas of expertise have gained a powerful advantage. In this environment, the companies that offer niche products or services, with clearly differentiated brand identities, will be the most successful.

How branded are you?
Your mission is to position your company in this competitive environment. You’ll have to be smarter in picking your markets, think long-term and make commitments to vendors and customers. The most successful companies will offer specialized expertise to their customers.

The critical success factor for a small business will be the ability to identify the “intangible value” of your product or service. No longer will a certain product, low prices, or great service generate success in the marketplace. You have to create, sell and maintain a solid brand identity, and attract the prospects who are most likely to identify with your brand.

Your end-user will have to believe that your product or service is different from, and more valuable than, the other products in your market. And your customers will have to be willing to pay more for it. That, in a nutshell, is what brand identity is all about.

Take a look at the products and services your company provides. Then ask: What do your customers receive?  Don’t say on-time delivery, or customer service, or quality.  These will not be the characteristics that will allow you to stand out from the rest, to create and own your own niche.

Your brand identity is the business that your customers and prospects think you are in. You can control what you send to them. You can’t control how it’s received.

So, if you want to find out what business you’re in, call your customers and prospects anonymously or have some outsider do it. Ask them questions about your company and your product or service. Right or wrong, they’ll tell you what business you are in.

There are three different ways either you or your customers can describe your business:

1) By virtue of your product, which is the simplest and least sophisticated form of identity.

2) By virtue of your process, the extras you wrap around your product.

3) By virtue of the outcomes, what your product or service does for the customer.  This is the most sophisticated form of brand identity.

Maybe you already have developed a successful brand identity for your product or service. Maybe you think you have, but your customers see you in a different light. The following two sections describe brand-identity tests that can help you gauge how your customers see you and how you see yourself.

Your marketplace image
Ask yourself:

• Do your customers understand your product or service well enough to be able to describe the product or service clearly?

• Do customers know what makes your company special?

• Do your customers value your brand so much they are willing to pay more for whatever it is that makes it special?

• Do your customers feel so strongly about your brand that they will defend it, even at a higher price, when it comes under attack?

If you answered yes to all of these questions, your brand identity is succeeding in the marketplace. But are you as profitable and growing as fast as you would expect? Are you meeting all of your performance goals? Perhaps a little polish would add to your outcomes.

If you don’t pass the test, you fall into that large, gray, amorphous, commodity-producing zone.

Your brand image
There are two ways your customers learn what business you are in: design and behavior. Design is the business you tell them you are in; behavior is the business you show them you are in.

The first way they hear about you is the way you describe your business, either by product, by process, or by outcome.

Test the way you identify your business by asking yourself the following three questions. Try to answer each question in one sentence:

1) What business are you in?

2) What do you do?

3) Who do you do it for?

How did you describe your business? Most people respond in terms of product, which is the most common way to identify your business. It is also the least sophisticated way.

There are only two places you can be in the mind’s eye of the people you sell to: brand or generic.

We see examples of generic products and sales pitches every day. Take stockbrokers, for example. How many cold calls do you get with vague offers to satisfy any investment needs you might have? Probably a lot. And they probably turn you off.

When you ask a stockbroker the questions above, here are the answers you will get: What do you do? I’m a stockbroker. What do you sell? Stocks, bonds, tax shelter annuities, whatever you need. Who do you sell those to?  Anyone who’s buying.  I can have you in a mutual fund by sundown.

Stockbrokers are a good example of peddlers of generic products. Think about your business. When you make prospecting phone calls or sales visits, does the way you describe your product or service sound a lot like the stockbroker?

Check your business pulse
The first step in creating a brand identity is market research. It doesn’t have to be exhaustive. But you do have to take a close look at three aspects of your business.

1) Product or service

2) Process and procedures

3) Outcomes

As you assess each aspect, ask the following question: If I bring my product/service and my people together in a special way, what outcome could they create that no one else has?

That question is the cornerstone of brand identity. Write it in big letters on the top of your notebook as you analyze your product or service, your process and your outcomes.

Use these questions as a guide:

• What, exactly, is your product or service?

• What are the processes and procedures you use to produce those products or services?

• What outcomes do your processes achieve? Are you profitable?

• How well does your operations system function?

• What is your marketing system?  Is it effective?

• How do you contact prospects?

• Who makes up your customer base?

• Who is your typical customer?

After assessing your business, ask these questions about your market:

• Who are the leaders in your market?

• Where is your product or service positioned?

• Who are your closest competitors?

• What do they provide that you don’t?

• What do you provide that they don’t?

• What are the current market trends?

• What are the future market trends?

Much of the information you will need will come from customer and vendor surveys, as well as industry analyses. If you don’t have recent customer and vendor feedback on how, and what, they think you are doing, getting such feedback should be a top priority.

Selling and living your brand
The opportunities to sell value-added products and services at value-added prices are greater today than ever before. That’s the upside of the current economic climate. The downside: At the same time, there has never been a greater propensity on the part of the buying side of every transaction to push all products and services down to commodity pricing and delivery levels.

In this environment, we have a situation that can be characterized as Economic Darwinism. It’s not how big and strong you are to survive, it’s your ability to adapt. This is where small businesses have a great advantage. You have the ability to be flexible and to respond more quickly than other businesses to the most price competitive market we’ve ever faced. But you have to be prepared to alter significant segments of your business to ensure that you have the systems in place to maintain your competitive position.

Maintaining brand identity in a competitive environment is a constant process of innovating and adapting to changes in the marketplace, as well as anticipating future demands on your operations systems. To be successful, the most important challenges you face are redesigning your business, changing your traditional modes of operation, refocusing your target customer base, and creating a new sales strategy. 

Your business functions exactly as it’s designed to function.  Your marketing, sales, accounting and customer service people function according to a design, a certain approach to accomplishing tasks.

For example, if you ask a salesperson to call on a prospect, he or she follows a system to accomplish that task. Somewhere between the assignment and arriving at the prospect’s office, a design takes place: what to say, what brochures to leave, what the desired outcome should be. Your design might have come from a dominant employee, an idea you shared from a seminar or a magazine article, or it simply could have evolved to fill a vacuum. But the design is there.

To build a brand identity, you have to remodel your business design. Like an architect faced with a renovation job, you have to take a long look at your company’s structure before you can begin. You have to assess all aspects of your business, marketing, sales, accounting, customer service, administration, and analyze the outcomes each part creates.

Outcomes fall into two basic categories: those that support your business strategy and those that hinder your strategy.

Outcomes that support your business strategy contribute to growth and profitability. Typically, they include increased market share and margins, higher-rated customer satisfaction, or repeat orders, whatever you use as your measurement system. Your job is to understand which designs create these results, formalize them and make them better.

Outcomes that hinder your business strategy lead to declining growth and profitability. They are not sufficient to provide the margin or the reinvestment capital you need for operating revenues to grow your business. These outcomes might include declining market share, flat margin, smaller customer base, fewer repeat orders.

If you have outcomes that are not sufficient for driving the strategic intent of your company, you have only one alternative: Change the design of your business. Change the design of your marketing; change the design of your selling; change the design of your customer service. Every aspect of your operation must add outcome value, profit and growth,  to your business.  Otherwise, it must be altered or eliminated.

Sell your outcomes
As mentioned earlier, your customers can brand you by your product, your process, or your outcome. The least sophisticated branding is product branding; the most sophisticated is outcome branding.

In moving from product identity to outcome identity, you have to establish in the minds of your customers not just what your product is and how it’s processed, but what it does for them.

Xerox Corporation used to call itself the “copier company.” It described itself in terms of its product. When Japanese companies entered the market with a faster and more advanced copying process, Xerox began to lose market share.

So Xerox started calling itself the “document company.”  It positioned itself as a problem-solver. The company publicized case studies describing businesses’ copying problems, bottlenecks in document processing, and how its product and process came to the rescue, the ultimate outcome for satisfied customers. The Xerox story is a lesson in brand positioning that distribution companies can copy.

Max Carey, founder and chief executive officer of Corporate Resource Development Inc., a sales and marketing consulting firm based in Atlanta, can be reached at (404) 231-9904 or at www.crdatlanta.com. 

This article originally appeared in the Progressive Distributor 2001 ASMMA/I.D.A. Spring edition. Copyright 2001.

back to top                                       back to marketing archives