five tips for reducing the cost of branding. 

Burning money on branding is more common than most marketers think. Because few businesses truly understand what a brand is and how branding works, advertising agencies, branding agencies and design studios have become expert at spending their client’s money without effective accountability.

Branding is critical, and most businesses need to invest in it. That said, a lot can be done to reduce what many businesses spend on brand and brand.
  1. Reduce the cost of branding – get out of the boardroom. 
Perhaps the two most concerning issues about branding are the lack of understanding about what brand and branding are and the propensity to develop brands in the boardroom, perhaps with the help of a consultant.

There are hundreds of definitions of the word – brand. The one I think carries the most currency was first articulated by Amazon founder – Jeff Bezos. Bezos defined a f=brand as:
  • What people say about you when you are not in the room.
The strength of this definition lies in reference to ‘people,’ which I have taken to mean – the target audiences, given that no one should care less what other audiences think. I hate IKEA – but IKEA could not care less as I am not in their target audience. 
Branding might best be defined as follows:
  • The process of bridging the gap between what people say when you are not in the room’ and what you want them to say when you are not in the room.
The strength of this definition lies in the implied demarcation between the:
  • Actual brand – what people say.
  • The optimal brand – what we want people to say. 
The branding process is complete when the actual and the optimal brand are identical – and even then, further work will be required to maintain the match. The actual brand is the result of all that has occurred to date – while the optimal brand is what the data suggests is the brand most likely to maximise:
  • Sales
  • Margins
  • The long-term value of the business.
Implications of all of this include the following:
  • Research is required to know what your brand (actual brand) is.
  • Research is required to understand the gap between the actual and the optimal brand.
  • Research is required to determine what will maximise sales, margins, and value. 
Indeed, this all points to the idea that brands are best developed, not in the board room, but in collaboration with the client. Indeed, working with the client will almost certainly be more cost-efficient and makes for a better outcome. Co-created brands will almost certainly give rise to better outcomes.

INSIGHT – Co-create your brand, working with your customer or potential customers and other stakeholders. Work together to identify and eliminate the gap between actual and optimal.

QUESTION – What exactly do your customers say about you when you are not in the room?
  1. Reduce the cost of branding – become unique.
Pay Pall co-founder and Silicon Valley venture capitalist Peter Theil has written and spoken at length about the merits of ‘eliminating the competition.’ He is, of course, not talking about killing the competition or indeed putting them out of business. He is talking about differentiating a product so much that, in effect, it has no match. What is more, he is on to something.

Indeed, research shows an inverse relationship between the extent to which a business is effectively differentiated and the required investment in marketing and communication. Theil was highlighting differentiation as a key to driving sales and margins. I am highlighting here the importance of differentiation in managing expenditure. 

It has long been argued that effective differentiation through effective branding helps to make a product or service more appealing to a target market. Indeed, it can add significant value to a product or service.
In this way, differentiation can:
  • Drive sales through engagement.
  • Drive margins through the perception of value.
  • Drive repeat business and referral.
Equally, however, establishing a competitive advantage (point of difference) can help drive costs down by:
  • Making communication less necessary – as per Tesla or Zara.
  • Providing a more tangible message for communication.
  • Increasing the likelihood of relationships.
Instead, Tesla and Zara have no advertising budget – relying on a tangible competitive advantage.
At different ends of the market, Ikea and Ferrari have clear competitive advantages on which to hang their communication on – giving them a more tangible message to sell and requiring less to sell.

Apple and Microsoft have developed competitive advantages, real and manufactured, that have helped them develop a loyal client base to whom they need to communicate a lot less.

Research also suggests, however, that a point of difference will only deliver these benefits if it is:
  • Relevant
  • Tangible
  • Credible.
The point of difference needs to be entirely relevant to the needs and wants of the market – delivering the message that one brand is more attuned to consumer needs and wants than the others.

Points of difference can be manufactured, but they must also be tangible. ‘Better’ and ‘best’ are not tangible points of difference. Effective points of difference must be quantifiable.

Many businesses claim to have a point of difference they do not have or promote a point of difference that the market will not believe. People will never believe that Hyundai will ever make a vehicle that is truly ‘state of the art’, not that state of the art is an effective point of difference.

Where a product or service is poorly differentiated, it will inevitably cost more to promote effectively. It becomes all about building awareness and relying on top-of-mind awareness to drive sales – which is inevitably expensive.

INSIGHT – Differentiation is a key to driving sales and margins up while driving marketing expenditure down. Maximising brand differentiation can minimise the cost of branding. 

QUESTION – Exactly what makes your product a better buy than its primary competitors? 
  1. Reduce the cost of branding – deliver on time, to budget and to specification. 
Professor of marketing at NYU, Scott Galloway, once asked an audience – ‘what do Facebook, Amazon, Apple, Netflix and Google all have in common. Answering his own question after a period of audience silence, Galloway said – ‘a fucking great product.’ The point is – the foundation stone for every great marketing strategy and every cost-effective marketing campaign is a great product.

But what is a great product, and who defines ‘great?’

A great product might best be defined as follows:
  • It can meet or exceed customer expectations.
  • When purchased, the customers believe it does at least what is claimed.
The greatness of a product, any product, is determined by the customer. Unfortunately, research has shown that trusting a product to do what is claimed is increasingly difficult to establish. Research suggests that:
  • 96% of consumers do not trust advertising.
  • Just 42% of consumers trust business.
  • Just 32% of consumers trust government.
  • Just 8% of consumers trust the media.
Fortunately, this lack of trust can be addressed by way of referral. Indeed:
  • 81% of consumers trust brand referrals and reviews posted on social media.
  • 92% of consumers trust referrals from friends and relatives.
However, referrals will only be forthcoming if the product meets or exceeds customer expectations. In other words – referrals will only occur if it is a great product – or in the case of a service – delivering on time, to budget and to specification.

INSIGHT – Always meet or exceed the expectations set and ensure that the expectations set are consistent with those of the customer or target audience.

QUESTION – what exactly are your customer’s expectations, and do you consistently meet them?
  1. Reduce the cost of branding – prioritise accountability
Contrary to popular belief, it was not David Ogilvy who suggested – ‘50% of advertising does not work – thank God the client does not know which 50%,’ – but someone said it, and I would argue that they were nearly right. I would argue that in 2021:
  • It is much worse than 50%.
  • It no longer has to be this way.
  • The solution lies in accountability.
I suspect that less than 50% of advertising achieves or contributes significantly to achieving the required outcome. With the advent of digital advertising and other opportunities, the waste of money on advertising can, in 2021, be significantly reduced. Communication in 2021 can be made a lot more accountable than it once could – and accountability can help to deliver cost savings and significantly enhanced returns on investment. 
Such accountability can and should readily address:
  • The message.
  • The media.
  • The approach.
Messaging and media need to be held accountable, particularly given the investment so often made in these areas. The approach and, in particular, the reliance placed on communication also needs to be held to account. In this regard, it is interesting to consider the growing number of businesses that no longer have an advertising budget. They include – Zara and Tesla, among many.
Accountability can be enhanced through:
  • Focusing more on media that is accountable.
  • Undertaking regular market research.
  • Using various ancillary technology and techniques.
In 2021, advertisers should be reluctant to use traditional media where online media can do the same job. Unlike press, television and radio advertising, online media is potentially highly accountable. In almost all cases, advertisers can be aware of how many people viewed an advertisement and how many responded to it. They can even pay by view or response.

Market research that looks at awareness and brand image is interesting, but really effective research looks at behaviour and intention. Such research can provide a sound measure of how a campaign is impacting behaviour – and after all, behaviour is what it is all about.

Various technologies and techniques can be used to make communication more accountable. They include dedicated telephone numbers and website links, both of which can be measured and traced back to specific messages and media. There are, of course, others – including the use of social media.

The fact is – in 2015, communication can be a great deal more accountable than it once was, and it can certainly be far more accountable than many advertising agencies will talk about. Indeed, they can be considered to have a vested interest in not making advertising and communication, in general, more accountable.

INSIGHT – All communication, including brand-related advertising, can and should be accountable. In 2021 higher levels of accountability can be achieved with limited or virtually no cost.

QUESTION – How much of your advertising and communication more broadly is falling on deaf ears or not being seen by the primary target market?
  1. Reduce the cost of branding – do it over and over.
If I had a dollar for every time a visual branding guru, or indeed marketing genius, has told me that the brand identity of an enterprise has to be applied consistently throughout the organisation, I would be a wealthy man – or not so poor anyway.

While consultants are known for obsessing about such things and just about everything else, in this case, they are right. Consistency is critical. It builds the message, credibility, and familiarity. It is part of a successful marketing process.

Consistency is important well beyond the application of the brand identity. It is also important in terms of the message and tone communicated across the various communication channels and over time. There is a great deal of evidence to suggest that many organisations are not well served by frequent changes in messaging over time or by a lack of channel integration.

One area of growing concern for me about consistency is ensuring a consistent tone and messaging and communicating a consistent branding in social media. 

Whilst I have written several articles critical of the obsession with social media as the silver bullet, it is a critical means of communication. It has a great deal to offer many organisations. However, it is also more difficult than some media in terms of ensuring consistency.

Consistency is critical to reducing, or at least containing and maximising the return from marketing expenditure. Having said that, to maximise the impact of consistency, we first need to get the brand, messaging, and tone right.

I also believe that campaign messaging, tone and even the delivery is changed too often and often simply for the sake of change. You will get sick of what you are saying much faster than the market. 

INSIGHT – Beware of change for the sake of change. Consistency is central to effective communication and branding. Repetition is not the problem many think it is. 

QUESTION – The last time you requested a change of creative or messaging in your advertising, what hard evidence did you have that this was necessary? 
 
There is a myth that branding is necessarily expensive. The reality is that branding need not be any more expensive than awareness advertising, can be less expensive than awareness advertising and can be a powerful tool for driving marketing costs down.
 
D. John Carlson
No tags