Branding is the key to selling on value and escaping the price trap. Good brands create customer loyalty and compete on how well they satisfy a need or solve a problem. Too many think that branding always falls into the category of the Nike swoosh, Coca-Cola swirl or Apple. While those are examples of great brands, they do not clearly represent what branding is all about. It is not just colors, fonts and logos.
Last month I had a great opportunity to conduct some in depth industry research and competitive intelligence for a newly acquired client of ours. Due to our NDAs I can’t say who the client is, but they are a mid-size niche online retailer. The purpose of the study was to identify key players, market size in terms of dollars, growth potential and then to identify a marketing plan/strategy that would best leverage the growth opportunities discovered.
Naturally, there was a lot learned during our study. Part of what we learned though came as no surprise. Without revealing anything about the company or study, I am going to share some high-level lessons learned, anticipated and not.
- Lesson 1. Buyers shop only on price when it is the only condition they understand or value.
- Lesson 2. Most companies do a poor job of helping their customers value anything but price.
- Lesson 3. Significant growth is always possible when your brand and your message creates and communicates real value.
A customer value hierarchy usually looks something like this:
- Satisfy a Problem/Need
- Brand Loyalty
If I need a truck, but my favorite brand is Mazda, I will forgo brand loyalty to serve the underlying need. I may have a secondary brand that I favor or a few that I am willing to consider. Once I identify the solutions that I know how to value, I rank the different solutions based on how they meet or exceed my needs. If they are all indifferent, or appear that way, then I resort to brand preference, and if there is none, I shop on price. This is a very generic and simplified version of most buying experiences.
In many cases, we have no brand loyalty and in some, brand loyalty means everything. There are many examples of both scenarios. When I go grocery shopping and my wife sends me for baked beans, I always buy Bush’s Baked Beans. I don’t even look at other options. I never even look at the price. I know every time Bush’s will deliver on great taste. It’s not worth it to try another brand risking a bad meal. The $.10 – $1.50 price difference is not enough to make me cringe. In the same shopping trip, if paper plates are on the list, I have zero brand preference. So I typically choose what seems to be durable at the best price. White label or a brand label makes no difference. These are both simple examples. The more complex the decision, the more money on the line, those are what makes some decisions more difficult to make.
So what should a company do then to stand out, get chosen and experience exceptional growth?
At the top of the marketing funnel is branding. This may be a hard pill to swallow for many, especially those that are driven by a strong sales culture. But that is because branding is not always well understood.
Branding is so much more than a logo and blasting that logo all over the place. At the core of a well executed brand lies the answer to “why” the company exists. “Why” they do what they do, and “why” they find purpose in this cause. Companies who solely exist to make money have a very shallow brand. I do not mean that in negative way, I simply mean that that there is no depth, there is nothing to become emotionally part of it, proud to use or desire to become associated with. This is not necessarily a bad thing, but it’s the truth. Tell me the difference between a GE and Whirlpool refrigerator? Most of us do not know. They both work hard to make good appliances that are long lasting and built with quality, but for most people, that is all we know. These companies share the same depth of brand equity, and with no real differentiation.
Now ask yourself, what is the difference between a Toyota Camry and a Ford Taurus? I think we all prefer the Camry. Why is that? Same reason I prefer Bush’s baked beans. Toyota has a reputation (or brand) for being far superior and we all know it. Ford trucks have great brand, but the Taurus, not so much. If those two are our car choices, we all will spend a little extra on the Camry. They have built a brand around reliability, trust, longevity, safety and more. The Taurus has not.
What makes a brand trustworthy is all in how you communicate it. This happens in how you communicate it to your employees and your customers. For sake of time, we are only going to cover communicating your brand to customers. Don’t misinterpret this to mean internal branding is not as important. In many circumstances, it is the most important step of the process.
Brand Communication Phase 1: Marketing and Advertising
One of the jobs of marketing and advertising is to communicate the “why” of the business and what you do as the delivery vehicle for that “why”. As you effectively drive home the marketing and advertising messages that communicate that why, you will connect with more potential buyers and better reflect their expected experience. Your brand should be reflecting it’s own values and purposes in such a way that it resembles the ideal outcome for the buyers.
Let me illustrate with a brief example. One great caterer in SLC, Utah is Culinary Crafts. On the top of their home page they say, “ Our Philosophy Is To Create Glorious Food While Creating Joyous Moments and Treasured Memories.” One of their competitors says, “ We specialize in catering to clients who demand high quality and extraordinary service at a great value. We’re based in Salt Lake City, Utah and we work carefully to stay within your budget.”
It is clear who will be shopped on price, and who will be shopped on desired outcome. Not only that, but Culinary Crafts is also successfully weeding out people who only value price. This means they are working more with clients they want and less with the clients they don’t want.
Communication Phase 2: Sales Process
One of my favorite companies is The Real Estate Guys Radio program. They have been around for over 20 years. They have no sales team, but a very effective sales process. Their brand is all about providing a great educational experience so that their students can find the right real estate market (homes, apartments, commercial etc). They live by the philosophy that if they need to say what their unique selling proposition is, then they aren’t doing a good enough job. In fact, if you go to any of their events, you won’t find books to buy at the end of the event. In fact, there is no high-pressure sales. Just high intensity learning situations. Because they provide such great content, they know the serious buyers will reveal themselves, and they do.
Your sales process needs to be a continuation of the marketing and advertising. If your sales team or sales process has a different message, the disconnect will scare off potential buyers and you will lose them. The Real Estate Guys know this. The great content starts with their weekly podcast, extends into their lead generating activities like email and continue on into the events they host. As a result, The Real Estate Guys do not need hustlers at the back of the room like many other event driven education companies, they don’t even need a sales team. The process creates buyers who come to them.
Communication Phase 3: Product or Service Deliverability
This is where the rubber meets the road. Do you deliver on your promise or not. To put it plainly, if you cannot deliver what you promise on, your company will be short lived or forced to change. It is better for you to change it, than for the marketplace to change it. Now is the time to have your own deep reflection moment. Ask yourself this question, “Does the quality of my product or service meet or exceed the brand promise I am communicating? And does it reflect the experience the customer expects to have?”
If the answer is no, it is time to go back to the drawing board.
Communication Phase 4: Customer Service – Post Purchase Experience
One thing every customer wants to feel is trusted and important. Nobody does this better than Nordstrom’s. Nordstrom’s has built a brand around not only high quality products, but creating a culture where all employees are empowered to do what is right for the customer. Think of one other high-end clothing retailer that has achieved the success and brand equity of Nordstrom’s? You can’t.
Communication Phase 5: Ongoing customer relationships
Another company similar to Nordstrom in terms of reputation is that of Ritz Carlton. Not everyone gets the great pleasure of being able to stay at the Ritz. But those who do, know that the Ritz Carlton family cares about a customers stay. In fact, they care so much, they take notes on each stay and keep a log of it. If you put the desk by the window, guess what will happen on your next stay, the desk will already be by the window for you. They know that in order to “craft unforgettable travel experiences” they must know what every individual customer wants. And so they pay attention to every single customer without fail. That is why they can charge the prices they do. Because those who want an unforgettable travel experience, won’t balk on the price. Price is not what is valued most.
Branding is the key to selling on value and escaping the price trap. Branding is not just a logo, color palette and set of fonts. Branding is about the brand. Internally and externally. Know your “why” so deeply that it penetrates every word said, every product or service sold, every customer interaction and what every customer says about you. Do it in a way that reflects the perfect intersection of why you are in business and what your customers expect their buying experience to be. If you can do that, you’ve built a brand that competes on real value, not price. You will attract buyers who want to be loyal to your brand because you are solving a need or problem, and they know they can trust you to deliver on that every single time.