five strategies for building a brand without advertising. 

  • Product.
  • Experience.
  • Values.
  • Relationships.
  • Culture.
 
BRAND PHILOSOPHY

Consistent with my view that great marketing has the customer at the centre, great branding is all about the customer – so much so that it is the customer who defines the brand. Following on from this, my philosophy regarding branding might be summarised as follows:
  • Most organisations have two brands – the actual brand, as defined by the customer and the optimum brand, represented by the organisation.
  • The actual brand for an individual or organisation directly impacts the performance of that organisation, especially in terms of margins and customer lifetime value.
  • The key to great branding is substance, not the fluff created by many advertising agencies or the concept of ‘better,’ – often focused on by many marketing executives.  
 BRAND AND BRANDING DEFINED

There is no better definition of brand than that articulated by Jeff Bezos, the founder of Amazon. He defined a brand as being:
  • ‘What people say about you when you are not in the room.’
 Contrary to what many marketers would like to be the case – what people, or more specifically the target market, say or feel about a product – is the actual brand – the brand determining performance. How an organisation wants to be seen by its target audience is its optimum brand. The optimum brand is the brand the organisation believes is required to maximise performance.

It is rare for the actual and optimum brands to be identical.

Branding is about reducing the gap between the actual and optimum brands. It is all about creating within the target market the brand’s perception that will facilitate maximum performance.

IMPORTANCE OF BRANDING

An individual’s or organisation’s actual brand is important because it directly impacts on:
  • The expectations of a brand and, therefore, initial sales.
  • The perceived value of a brand and, therefore, margins.
  • Loyalty to a brand and, therefore, repeat business rates.
  • Experiences of a brand and, therefore, referral rates.
 
Branding is central to maximising the lifetime value of every enquirer and, indeed, attracting new enquirers.

The optimum brand for any individual or organisation is the brand that will ultimately maximise initial sales, margins, repeat business rates, referral rates and ultimately the lifetime value of every customer.

BRANDING OPPORTUNITIES

The opportunities for building a brand occur at each touchpoint in the customer journey and all engagements with members of related audiences. More broadly, every interaction with a customer and the audience impacts the actual brand of an individual or organisation. More specifically, there are three points at which an individual or organisation can influence its actual brand and, in so doing, create an alignment between the actual and optimum brands. They are:
  • Before the purchase – the product, the price, distribution, and communication.
  • During the purchase – the customer experience, service, and staff conduct.
  • After the purchase – service and maintenance, customer follow-up, and warranties.
 All three opportunities are addressed in this missive.

CASES IN POINT

There is a myth that advertising is essential for businesses to succeed. Indeed, there is a view that advertising is required to build a brand. Well, here is a list of world-leading brands that have no advertising budget:
  • Zara.
  • Rolls Royce.
  • Krispy Kreme.
  • Costco.
  • Ferraro Rocher.
  • Tupperware.
  • Lamborghini.
 These are just some leading brands that have used means other than a reliance on advertising to build their brand. I am not suggesting that all businesses can achieve their potential without advertising. What I am suggesting is that:
  • Advertising and branding are not the same things.
  • Advertising is not an essential element of branding.
  • Many brands are built and maintained without advertising.
  • Many businesses burn money using advertising to build a brand.
 STRATEGIES

A range of activities can be addressed to build a brand with or without advertising. Five strategic considerations must be addressed in every branding strategy: product, customer experience, values, culture, and relationships. In terms of communication, there are also alternatives to advertising – many of which can deliver superior results to advertising.

THE PRODUCT

I am a big fan of Scott Galloway, a University of New York marketing professor. Galloway once asked an audience a simple question – ‘what do Facebook, Apple, Amazon, Netflix and Google (the FAANG businesses) have in common?’ Not waiting for the audience to respond, Galloway answered his own question with the words – ‘a fucking-great product.’

This question and the answer point to two things:
  • The importance of the product.
  • The importance of the consumer.
 Having a great product is the starting point for every great brand. It is certainly the starting point for developing a tangible, credible, and sustainable brand. But who defines ‘great’ in the search for a ‘great product?’ In my opinion and that of Galloway, the customer determines when a product is a great product. It is the customer who defines ‘great.’ If your target market thinks your product is great, it is great, and if they do not believe it is great, it is not great. To be great, a product must exceed the expectations of customers and potential customers.

Perhaps the best approach to isolating a great product is – co-creation – or working with the customer to determine their requirements and then working with them to develop a product that exceeds those requirements. Co-creation shifts product design from the province of unreliable intuition – putting it firmly in the province of the customer. The value of co-creation is highlighted by the businesses using it, including:
  • IKEA.
  • Sodexo.
  • DeWalt.
  • Lego.
  • Heineken.
  • DHL.
 The value of co-creation is also highlighted in these statistics:
  • 77% of people favour brands that collaborate with their customers.
  • 81% of people think brands collaborating with their customers are more authentic.
  • 86% of people believe that brands that collaborate with their customers are more trustworthy.
 The importance of working with customers to develop the optimum brand is also highlighted by this statistic (from recent research):
  • 94% of marketers say understanding their customers is ‘extremely’ or ‘very’ important to their overall business performance.
 
 That said, while they know it is important – in my experience, most businesses think they understand their customers better than they do. Intuition is not an effective way to understand customers. This is highlighted in the following statistic:
  • 60% of people do not think that brands care what they think.
 CUSTOMER EXPERIENCE

The American author, Seth Godin, wrote a book entitled – ‘Purple Cow.’ In the book, Godin discusses the fact that a brown cow, while useful, is not especially remarkable, while a purple cow would be nothing if not remarkable – and therefore memorable. A good customer experience is important, but a remarkable customer experience is a formidable marketing tool. People confronted with a remarkable customer experience:
  • Seek it again.
  • Tell others about it.
 
 A remarkable customer experience is, therefore, a key to great branding and a powerful marketing tool as it promotes repeat business and referrals.

The customers experience referred to here is, of course, not just the purchase experience. It is the experience at every point along the customer journey. The customer experiences that impact the brand, repeat business and referral – occur before, during, and after the sale. Every experience will ideally:
  • Meet or exceed operational customer expectations.
  • Provide service and an experience that delights and even surprises the customer.
 Well-known businesses offering a well-researched customer experience that helps to build the optimum brand that drives repeat purchases and referral include:
  • Ikea.
  • Apple.
  • Netflix.
  • Uber.
  • Disney.
 Much like a great product, the customer defines a great customer experience. As with the product, the best customer experience can be defined using co-creation. Co-creation is a powerful tool for developing the optimum customer experience. Consider these statistics:
  • 32% of customers “break up” with a favourite brand after one poor customer experience.
  • 73% of people prefer brands that personalise the shopping experience; how personalised is the customer experience
  • 74% of customers can switch brands if their purchasing process is too difficult.
 VALUES

In his famous speech following his return to Apple (after being sacked), Steve Jobs addressed at length the critical importance of the Apple brand and the fact that ‘values’ lie at the heart of that brand. The truth is – that values should lie at the heart of every brand. Here is the proof:
  • 94% of customers are likely to show loyalty to a brand that offers complete transparency.
  • Customers will pay 50% more for businesses making an impact
  • 64% of consumers say that shared values help them create a relationship with a brand.
  • 90% of consumers would switch to brands that share their values and outlooks on life.
 There is a growing body of evidence supporting the notion that customers care a great deal about what they perceive to be a brand’s values. Consumers want to deal with businesses they believe share their values – believing in the same things and behaving ethically and morally. Consumers care about corporate citizenship and the businesses they deal with, making a positive contribution to the world we all share.
 
Further, a growing body of research shows that consumers are more inclined to be loyal to and more inclined to refer a brand to friends if they believe that the brand is a good corporate citizen. The actual brand incorporates a perception of the values of a business and the optimum brand will highlight values that matter to consumers. This is the central tenant of the book – It is not what you are selling, but what you stand for” by Roy Spence. Nothing in branding is more important than values. Without values – there is no brand.

Well know ‘values-based brands’ include:
  • Ben and Jerry’s.
  • Tesla.
  • SpaceX
  • Body Shop. 
  • Zappos
 These brands have built great businesses on the back of values – or highlighting their principled approach to what they do. Commenting on the importance of values, the CEO of Zappos noted:
  • “We believe it’s really important to come up with core values you can commit to. And by commit, we mean that you’re willing to hire and fire based on them. If you’re willing to do that, then you’re well on your way to building a company culture that is in line with the brand you want to build.”
 RELATIONSHIPS.

I once asked a respected business associate about his views on doing business with friends. He responded by saying that – ‘I don’t do business with anyone else.’ His point was that he takes the time and puts in the effort required to convert clients into friends – on the basis that as friends, they will be brand loyal. This makes good sense. When pondering which of the big four accounting firms to use, it will become evident that there is little difference between them and, more often than not, determining the firm to work with is all about relationships.

Relationships are a key driver of customer lifetime value. Relationships can drive conversion rates, repeat business rates and referral rates. This partly explains the growing use of customer relationship management (CRM) software and systems. Having a CRM in place can most certainly provide the foundations for relationship development, but while they can include a database of potential customers, a database is never enough. There needs to be a strategy to drive and a commitment to maintaining relationships. It is much easier to be loyal to a person than to a product. 

Highlighting the importance of relationships is research suggesting that – 81% of consumers said they want to form a relationship with brands.

Perhaps the most common approach to developing relationships with customers is loyalty programmes. Such programmes are becoming increasingly expected by consumers, as evidenced by this research findings: 
  • 70% of consumers are more likely to recommend a brand if it has a good loyalty program an
  • 72% of US adults belong to at least one loyalty program.
  • 95% of loyalty programme members want to engage with the brand.
 Good loyalty programmes can and do work. That said, a true relationship involves a level of communication that is uncommon in loyalty programmes. A more effective approach to developing and leveraging relationships is a brand community. A brand community provides an online forum to attract and engage customers. An online brand community offers a range of benefits, as evidenced by these statistics:
  • Branded communities are 21% more likely to see an increase in brand SEO than social media communities.
  • Branded communities are 16% more likely to foster brand loyalty than social media communities successfully.
  • 58% of online communities say that their customers are more loyal to the brand because of their community.
 Significant brands leveraging the potential of a brand community include:
  • Apple.
  • Lego.
  • Airbnb.
  • Sephora.
  • Red Bull. 
  • Harley Davidson.
 CULTURE

Tony Hsieh was the founder of Zappos, the largest shoe retailer in the world, which he developed over nine years and sold to Amazon for US$1.9 billion. Asked about branding, Hsieh famously commented:
  • “At Zappos, we view culture as our No. 1 priority. We decided that if we get the culture right, most of the stuff, like building a brand around delivering the best customer service, will take care of itself.” 
 Vern Dosch, the author of Wired Differently, noted:
  • “I used to believe that culture was ‘soft’ and had little bearing on our bottom line. I believe today that our culture has everything to do with our bottom line, now and into the future.” 
 Culture is the most important aspect of branding, so much so that without the right culture, there is no brand – or at least – no brand of merit. It is the culture that will determine the behaviour of staff, and it is the behaviour of staff that ultimately delivers the brand – or determines the actual brand. Culture determines how staff behave at all levels of the organisation and ultimately delivers the required:
  • Quality.
  • Service.
 No matter what a brand like Myer says about its offering (in advertising), the staff’s behaviour determines how the business will be perceived. It is the staff that delivers the product and the customer experience. In the complete absence of advertising, the Zara brand has been built almost entirely on the back of culture.
Brands built on the back of culture include:
  • Apple.
  • Ikea.
  • Zara.
  • Zappos.
  • Google.
 Culture is central to building a great brand. Culture is the key to having the people who can deliver the product and experience that is inherent in the brand. The culture will ultimately deliver the product and the customer experience. It is the culture that will give substance to values and relationships.

COMMUNICATION

While this missive talks about branding without advertising, advertising is not the only avenue of communication. Indeed, a purist would legitimately argue that advertising is not communication. Advertising involves information travelling in one direction and, as such, does not qualify as communication.

A brand community does however involve communication – and the two-way flow of information can be very effective, in building a strong brand. There is, for many businesses, no more powerful a tool for building a brand than a strong brand community. Such a community has the added benefit of driving marketing costs down.

Great branding involves communication much more than advertising.

Central to effective communication will be a strong brand story that can communicate the brand efficiently.

INSIGHTS
  • Your HR team has a bigger role in your branding than your advertising agency. 
  • No one ever purchased anything based on a business’s optimum brand.
  • No amount of advertising will create a brand – certainly not cost-effectively.
  • Your actual brand is nothing more than what your audience says about you.
  • A brand community involves communication – advertising does not!
 ANOTHER PERSPECTIVE

RECOMMENDED READING
ACTION
  • To create a great brand – start with a product the consumer will love.
  • To create a great brand – start with a customer experience the customer will love.
  • To create a great brand – develop the relationships that drive brand loyalty.
  • To create a great brand – exhibit values your target market will embrace. 
  • To create a great brand, build a culture capable of delivering that brand.
 QUESTIONS
  • Given that 77% of people favour brands that collaborate with their customers – what are you doing to collaborate with them?
  • Given that 73% of people prefer brands that personalise the shopping experience, how personalised is the shopping experience you offer?
  • Given that 64% of consumers say that shared values help them create a relationship with a brand, how closely do the values of your brand align with those of your customers?
  • Given that 70% of consumers are more likely to recommend a brand if it has a good loyalty program, what does your loyalty programme look like?
  • Given that for 58% of online communities, the customers are more loyal to the brand because of the community – when are you launching your brand community?
 STATISTICS
  • 81% of people think brands collaborating with their customers are more authentic.
  • 94% of marketers say understanding their customers is ‘extremely’ or ‘very’ important to business performance.
  • 94% of customers are likely to show loyalty to a brand that offers complete transparency.
  • 91% of consumers would switch to brands that share their values and outlooks on life.
  • 74% of customers can switch brands if their purchasing process is too difficult.
 
Return on investment in marketing is maximised when the customer is at the centre of the strategic planning process. Many businesses claim to be customer focused, but few are. Being customer focused requires a commitment to understanding consumer behaviour. Such a commitment drives costs down and results up.
 
 
D. John Carlson
0402273350
johnc@lincintegrated.com
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