Small Business Branding Q & A

Originally published in Maine Today...

Q. Many of us throw branding, marketing and advertising into the same bucket. Can you help us sort out the differences?

A. Marketing is a discipline (or set of activities) ultimately designed to generate and increase revenues.  It includes a wide variety of sub-disciplines, strategies and tactics.  For instance, all of the following can be components of a marketing program:

•Marketing research
•Customer knowledge/analysis
•Competitive knowledge/analysis
•Product
•Packaging
•Pricing
•Branding
•Marketing communication (including advertising)
•Distribution
•Promotion
•Publicity
•Media relations
•Industry analyst relations
•Signing
•Merchandising
•Cause-related marketing
•Event marketing
•Trade shows
•Sales support
•Web sites
•Customer relationship marketing, including data base marketing and direct marketing
•Viral marketing
•Guerilla marketing

A marketing plan should promise specific revenue or market share increases in return for specific levels of funding for particular marketing strategies and tactics.

The marketing function can be organized by brand, customer, customer need segment, product category, functional sub-discipline (such as advertising, promotion, etc.) or some combination of these.

Advertising is paid for marketing communication.  It is a marketing sub-discipline as noted above.  Advertising’s major benefit is to increase awareness.  It also communicates the brand’s (or product’s) relevant point(s) of difference and can achieve other ends, depending upon the objective.  For many consumer product categories, it can actually elicit a sale.  For most business to business categories, it can only increase awareness and preference and put the brand in the consideration set.

A brand is the personification of an organization or its products and services.  Brands are designed to build relationships and emotional connection with customers.  Brands are also the source of promises to customers.  They should promise relevant differentiated benefits.  So, branding is the process of creating an identity for an organization or its products and services for the purpose of creating relationships with customers and making promises to customers.  Branding is a sub-discipline of marketing, but given its increasing role at an organizational level (organizational branding versus product-specific branding) and the resulting need to manifest the brand promise at each point of customer contact, branding should influence virtually every activity in the organization.  Branding is the source of (1) customer goodwill and (2) a significant portion of the financial value of a company.

There is increasing evidence and consensus that strong brands deliver the following business benefits:

•Decreased price sensitivity
•Increased consumer loyalty
•(For manufacturers) increased bargaining power with retailers
•Independence from a particular product category
•Increased flexibility for future growth (through extension)
•Increased ability to hire and retain talented employees
•Increased ability to focus the organization's activities & resources
•Increased market share
•Increased stock price
•Increased shareholder value

In summary, marketing is a broad set of activities designed to generate and increase sales (in the short-.medium- and long-term).  Branding is designed to increase sales and market share in the long-term by establishing relationships with customers.  Both rely on advertising as a very powerful tool.

Q. Small businesses don't have budgets like P & G to invest in their brands. How can they apply branding concepts to their business?

A. The two most important branding concepts that a small business must focus on are awareness and relevant differentiation.  You can offer the best products in the world with the best service at the best overall value, but if no one is aware of you, you will go out of business.  Awareness is the cornerstone of strong brands.  Second, people choose brands that are different in relevant and compelling ways.  Relevant differentiation today is a leading edge indicator of market share and profitability tomorrow.  What can your brand do better than any other brand in its category?  Better yet, what can it deliver that no other brand in its category can?

Arriving at the most compelling relevant points of difference is a strategic exercise informed by an intimate knowledge of your customers, their needs, their wants, their anxieties, their hopes and their fears.  Ideally, you want to choose a benefit that meets these three criteria: (1) it is extraordinarily important to your customers, (2) your organization delivers against it very well and (3) no other competitors are addressing it.  Once you have decided upon the unique benefits your brand intends to promise to its customers, you should translate those promised benefits into a tag line, which should always appear with your brand’s logo.

You can build awareness in a wide variety of ways: through advertising, publicity, insignia merchandise (polo shirts, ball caps, jackets, etc.), workshops, presentations, articles, newsletters, signing, sponsorships, legendary service that creates buzz, customer referral programs, product sampling, branding your vehicles, network marketing, co-marketing with complimentary products, being a guest on local radio and television shows, getting involved in civic organizations, joining and networking in professional associations, writing a column for a local paper, writing a book, etc.

One other important consideration is to always and consistently display your brand’s logo, tag line and URL (web site address) at all brand-related customer touch points, from letterhead, business cards and e-mail messages to company vehicles, building signing and employee uniforms.  The following factors affect brand identity recognition and recall:

•Frequency of use
•Consistency of use
•Distinctive symbols, shapes and colors
•Use of mnemonic devices (memory encoders)
•Size
•Background clutter

Most organizations don’t have to spend a fortune nor do they need to place ads in large national magazines or on TV to reach their target audiences.  It is imperative to know who the primary decision maker is, what motivates him or her, where he or she goes to get information on your product category and the messages to which he or she is most likely to respond.  Then get those messages to him or her as efficiently as possible through the sources on which he or she relies for information.  For instance, when I was vice president of marketing at Element K (an e-learning company), we discovered through research that our target customers primarily got their information from two industry magazines, two trade shows and two industry experts.  We focused 80+ % of our marketing efforts and dollars in getting our messages out through those few information sources.

Q. Your book describes color theory. Can you explain a little about how color is used for effective branding?

A. First, color is one of the most important components in creating brand identity.  The purpose of a brand identity system is to encode a brand in people’s memory and retrieve it from their memory.  In a visual system, the two most powerful components are the consistent recognizable shapes and colors.  (Scents and sounds are more powerful than visuals as understood by Cinnebons and Harley-Davidson.)  It is best if these shapes and colors are distinctive (at least within the product category).  Second, color can have a significant affect on people’s perception of a product or brand.  For instance, burgundy and forest green are perceived to be upscale while an orange label or package indicates an inexpensive item.  Third, colors can actually have an affect on a person’s state of mind and cognitive ability as demonstrated by numerous research studies.  For instance, pink has been shown to increase a person’s appetite and calm prison inmates.  Finally, if your brand is sold outside of North America, be aware that colors can have different symbolic meanings (not all positive) in different countries and cultures.

Q. One of your chapters is entitled "Nontraditional Marketing Approaches That Work." Can you share the top three approaches?

A. Proactive publicity is a must.  Always search for ways to get your brand in the news.  The news media is more likely to cover your story if the story:
•Ties into what people are talking about today
•Adds to discussions on current “hot” issues or topics
•References prominent people, places or things
•Has visual impact
•Is dramatic
•Is unexpected, controversial or outrageous
•Directly impacts a publication’s readership
•Has “human interest”
•Educates or entertains a publication’s readers
•Has a “local” angle
•Ties into a holiday or special occasion
•Represents a significant milestone or a major honor

Develop strong relationships with writers and editors of publications read by your target customers.

Free online newsletters are a highly effective form of marketing.  They keep your brand fresh in your customers (and potential customers) minds, establish your brand’s expertise and credibility, reinforce your brand’s identity and promise and help to build emotional connection and loyalty with your customers and potential customers.  The newsletters are very inexpensive to create and cost virtually nothing to publish.  Because of the low cost, you can afford to send them to non-respondents indefinitely.  Be sure to provide fresh, useful content in each issue.  You can use the newsletter to lead people to your web site or specific offers based upon their interest in a topic or product (through hypertext links).

Finally, membership organizations can create customer loyalty and increased sales.  Examples include Harley-Davidson’s Harley Owner’s Group (HOG), Hallmark Keepsake Ornament Collectors Club and Pond’s Institute.  But this can also take the form of customer advisory boards, expert councils, product launch parties, customer seminars and other forums.  Even frequency programs can begin to feel like membership programs to customers if they contain relationship-building elements.

Q. What part does public relations play in branding?

A. Public relations is one of the most powerful brand building techniques.  News coverage, articles and reviews are more believable than advertising and much less expensive.  PR frequently results in more brand-promoting copy than an ad and articles are much more likely to be read than ads.  The following brands built their businesses with little or no advertising: Body Shop, Compaq, Gateway, Haagen-Dazs, Harley-Davidson, Hotmail, ICQ, Starbucks, Trivial Pursuit and Wal-Mart.  Many of these brands were built with PR.  PR is the most powerful marketing tool for smaller and newer businesses.

Q. Please feel free to offer any additional insights on how branding can help a small-business owner protect and strengthen her market position.

A. The Blake Project has identified the following five factors to be drivers of customer brand insistence (across all industries and product categories):

•Awareness
•Accessibility
•Value
•Relevant differentiation
•Emotional connection

Focus on increasing these five factors for your brand, and your brand will succeed.

Following are the other most important factors in building strong brands:

•Brand management initiatives require senior management support.  The CEO must be the chief brand champion.
•The corporate culture must reinforce the intended brand promise and personality.
•Market the brand to your employees as much as to your customers.  If your employees don’t know what your brand stands for, neither will your customers.  The goal should be to make each and every employee a brand champion.
•Front line employees are the most important and powerful brand positioning proof points.  Hire, train and manage them well to ensure their delivery against your brand’s promise.

Some of the most powerful brands in the world evoke emotions, create sensory experiences and stand for something.

Does your brand achieve any or all of the following:

•Make people feel more in control?
•Is it nostalgic of something from their childhood?
•Does it make them feel warm and safe?
•Does it offer a sensual experience?
•Does it make them feel smart or frugal or important when they use it?
•Does it help them play out unfulfilled fantasies?
•Does it make them feel as though they have become the people that they had always wanted to be?
•Does it make them feel more connected to the group they most admire?

Often, the most successful new brands break through the marketplace clutter via one or more of the following:

•Breakthrough ideas
•Redefining their categories
•Out-of-the-box marketing tactics
•Strong differentiation
•Thought leadership
•Taking bold stands
•The element of surprise
•Radical product or package design

I wish you great success with your branding efforts.  May you unleash your brand’s power and transform your organization through branding!