Q. I’m thinking about investing in a branding campaign for my small business, but it is going to be expensive. What are your thoughts regarding branding?
A. Moses Foster, the President of West Cary Group said, “A brand is a promise that when kept delivers preference, and sometimes forgiveness.” There is value in a strong brand, but how can you build one cost effectively.
There is a massive amount of information on branding and brand management available these days. Entire schools are focused on the topic. Fortune 500 companies pay high-powered consultants millions of dollars to help them figure out how too brand themselves. However, in our experience, money spent on branding can be either a very effective investment or a complete waste. Therefore, when thinking about branding, we suggest answering three questions: (1) What message do you want to communicate? (2) What is the most cost effective way to communicate it? (3) Are you getting an acceptable return on your marketing investment (ROMI)?
What message do you want to communicate? A brand is much more than a logo or a tagline. It’s everything that someone thinks about when he or she sees or hears something that identifies you, your company or your product/service. What image do you want in the minds of prospective customers? Of course, the answer is that you want them to think about something that will cause them to buy your product or service.
This brings us back to the one question that every business must be able to answer, “Why should a prospective customer buy my product or service rather than that of a competitor?” If you can’t answer this question clearly and concisely, your prospective customers won’t be able to answer it either and they won’t buy. Conversely, having answered this question, you know what differentiates your product or service from the competition. You have the message you want to communicate to prospective customers. Now, make sure there is a segment of the market that values the thing that differentiates your offering and that this segment is large enough to support your business.
What is the most cost effective way to communicate it? You’ll want to ensure that all of your marketing material is consistent with your brand (for example, your business cards, website and letterhead should be consistent with your message and with each other). Consistency is critical. We’ve seen too many companies suffer from “Brand Schizophrenia.” Don’t dilute your brand with inconsistent messages. Be consistent every time you present yourself, your company or your product/service. Stay on point.
Depending on your business, it may make sense to spend money on proactive marketing (for example, print ads, direct mail, search engine marketing (SEM), search engine optimization (SEO), radio or television spots, etc.). If you decide to do this, remember that markets are not homogeneous. You will want to make sure that the segment of the market that most values the things that differentiate you from the competition hear your message. It’s useless to communicate to a group of people who prefer red, that your product is blue. In fact, it may be worse than useless. Once you have identified the segment of the market that values your message, figure out how to most cost effectively reach them.
Are you getting an acceptable ROMI? Measuring ROMI is reasonably straightforward in some channels (for example, banner adds, direct mail, email, etc.). It can be significantly more difficult in other channels. Doing so may require estimates and approximation. However, our experience is that attempting to measure the cost effectiveness of your marketing efforts will enable you to make better decisions about how to spend your marketing dollars. The point is that a dollar spent on marketing should yield more than a dollar in gross margin. If it doesn’t, you are wasting money.
A brand campaign can be incredibly expensive. It can be a black hole into which you throw endless resources without result. On the other hand, if you deliver a clear, well-targeted message that resonates with prospective customers through cost effective channels, it can provide great value.