Whether you sell to consumers, contractors, or large corporations, your customers are bombarded with messages every day. In this environment, companies cannot assume that prospects, or even former customers, know everything about them. Companies must find a message that strongly communicates their added value. In many cases, they must also manage a portfolio of brands sold through a variety of distribution channels. To help companies develop winning strategies that meet the needs of multiple customer segments, Smart Business spoke with Bob Segal, a principal at Frank Lynn & Associates Inc. and leader of the firm’s brand strategy practice.
What does it mean for a brand to communicate added value?
More than 60 years ago, psychologist Abraham Maslow described consumer needs using a pyramid with basic needs like eating or sleeping at the bottom and higher-level needs like acquiring knowledge, being creative, or contributing to society at the top. We’ve developed a similar approach on the business-to-business side, emphasizing high-level needs like improving customers’ productivity, reducing their life-cycle costs, or helping them develop new products. For consumers or corporations, adding value means linking your brand to these higher-level needs.
Is it enough to simply link your brand to these higher level needs?
A successful brand position must satisfy three conditions: it must be unique, compelling, and credible. Linking your brand to a compelling customer need in a unique way is a good start. However, many companies fail in the implementation phase when credibility is proven or disproven.
Can you give us an example?
For one of our business-to-business clients, we developed a position that emphasized how the company works closely with its customers to reduce costs and production setup time. The client used a variety of internal means to educate its employees on setup time reduction at its own manufacturing facility, created cost reduction teams between employees and customers, and even created a setup time reduction institute at its website.
Even if you have a unique, compelling, and credible position, how do you get the message across in such a “noisy” environment?
The key to getting your company’s message heard is to develop an integrated marketing effort. You need to coordinate your advertising, website, brochures, distributor training and motivation, employee communications, word-of-mouth and telemarketing scripts. You then need to translate all of this into a campaign that is focused on specific, targeted customer groups or segments.
We talked earlier about customer needs. What can a company do if it has a diverse set of customers with different needs?
In the world of branding, we often talk about brand architecture. This concept addresses how many brands a company requires and the relationship between those brands. My default position is, the less marks, the better. Using a single brand costs less, is easier to manage internally, and easier to understand externally.
However, your question is astute because many markets today are fragmented. We have a customer that sells nail guns to consumers, contractors, and industrial users. Each of those groups is made up of multiple subsets. In a perfect world, you would extend your single brand to cover all those groups. In reality, it is difficult to find a single compelling message for such diverse groups. Many companies often develop new brands when a single brand just won’t beat. Toyota’s launch of the Lexus brand is a classic example.
How does a multi-brand company consistently communicate different messages to different markets?
The answer is complex, but one key is to carefully coordinate which brands are sold through which distribution channels. In my Toyota/Lexus example, Toyota recognized that the premium or luxury message it wanted to communicate with its Lexus brand would be undermined by the middle-class nature of its existing dealerships. To carry the Lexus brand, Toyota required its dealers to establish separate Lexus-branded dealerships that exuded the image of luxury.
Can’t companies outsource their branding work to advertising or public relations agencies?
Some agencies do a stellar job. However, many agencies, particularly those that work for smaller companies, are often more comfortable designing brochures or writing press releases than developing overall brand strategies. Brand strategy reflects the overall mission of a company and the vision of the CEO. While advisors can help, the true success of any brand strategy is creating an idea that uniquely and credibly solves the pressing problems of key clients.