by Tony Fannin, President, BE Branded
Your brand is the most valuable asset you have whether you are a Fortune 500 company or the local corner bakery. It is the one thing that is most difficult to duplicate. It doesn’t matter if you sell products or services, what you stand for and your perceived reputation with your customers are what people are really buying. This is extremely important for services since what you sell is invisible. Let me give you a real life example (names have been changed to protect the fortunate). A HVAC company that was 7 years old just sold for over $400,000 to a larger corporation. The HVAC company had only 1 employee other than the two founders. They had no large capital assets, no real estate (they rented their store front), no real customer list of value since their customers do not typically make repeat purchases on a regular basis. So, why were they able to sell their company for $400,000? Their brand and reputation was so well entrenched in the area that it would take years for the larger corporation to gain any traction. The brand is what the real value that attracted the larger company.
Brands are extremely valuable when built well. If you’re an accounting firm, wouldn’t you like the power of the brand Deloitte & Touche? If you make furniture, would marketing be easier with a brand like IKEA? Brands also make selling easier. Here are three ways in which brand helps the bottom line:
• It’s easier to tell a story – Many people find great products and services that aren’t brand names. But, when it comes to passing along the story, often times, they remember the experience, but forget who they bought it from. If you’re a brand name, it’s easier for people to pass along their story and your name.
• Brands sell themselves – One thing that customers fear is making the wrong choice. They seek security in a known name. Not many get fired for going with the “brand name” company. Many do get fired for going with a “no name” company who doesn’t come through. By being a brand name, much of the mystery and risk is taken out without you having to “sell” it to anyone.
• Having a brand name saves you money – By being an unknown, you have to go the extra 2 or 3 miles just to get an opportunity. Sometimes, with all of the additional work, your sale ends up being a loss because you had to spend more time than what you actually made on the sale. Same in the consumer world. Your marketing spend needs to exceed the brand name competitor because no one knows about you and who you are. You are seen as a risk while the brand name is the safe choice. When a brand name invests in marketing, they face little resistance from competitors, thus can spend less. When you are competing against a brand name, you need to spend more in marketing, to establish who you are and to make any gains on the leader.
Your products and services are easily commoditized. There will almost always be cheaper, faster, more features, etc. We live in an age of similarities: similar products/services, similar price points, similar quality. You true asset is your brand and what that brand means to your customers.