The brand differentiation myth: Are you really prepared to pay the price?

One of the mantras of the brand industry is this notion that every company, every organisation, every corner shop has to have some unique offering that sets it apart.

The principal that underpins the idea is that one of the functional purposes of a brand is to help consumers decide who they will choose in the market place.

I agree with the logic underpinning that but I think there is also a point at which the obsession with being different can go too far.  More to the point, it just isn’t that simple.

For every product category consumers will have a set of basic expectations – what some marketers refer to as hygiene factors.  I expect that my house will have a roof, my car will have wheels and that my accountant will know how to add up. 

Funnily enough, or perhaps not so funny, there are examples of companies that have built a successful brand out of boasting of their ability to meet these basic expectations.  In my town we have a plumbing company that pitches for business every day on the basis that their tradesmen will turn up on time.  (As many of us who’ve sacrificed half a day to wait for a tradesman can attest, we’d be grateful if they turned up at all!)

But putting these examples aside, trying to find your point of genuine differentiation can be difficult.  Price is probably the most dangerous one.  You can see what has happened in the retail world.  It is like a game of economic limbo: every entrant in the market just tries to go a little bit lower.  After a while the crowd just expects it.  But the race to the bottom means little value is placed on the product – it is just about price.  Marketers call this the commoditisation of the market place ... your product or service is just another commodity (yawn, what’s for dinner tonight?)

Then there is service.  If you want to read a brilliant book on the genuine challenge of turning service delivery into a brand differentiator, then try Joe Calloway’s Becoming a Category of One.  The problem, as Calloway points out, is that all your competitors (if you are really honest) aren’t THAT bad.  Banks in Australia are a good example.  Yes, there was a time when they were closing branches.  But they pretty quickly realised their mistake and while few people could really be in love with their bank, most of the time their service is acceptable. (With the exception of call centre waiting times and branch queues perhaps).

So what does that leave us with?  I think the answer to that is a simple word: Relationship.  Now this doesn’t apply to every category I accept that … especially in the online world.  The other word we might use is trust but for me that is a benefit that comes from a company that genuinely wants to have a relationship with its clients or customers.  Screech – loud breaking noise: Let’s read that sentence again with an emphasis on the critical words: a company THAT GENUINELY WANTS TO HAVE A RELATIONSHIP with its clients or customers.

The word relationship in business is almost as abused as the word strategy.  But it implies a depth that most of us don’t stop to think about.

Being in a relationship means commitment, it means that you will go above and beyond and that you will make sacrifices in time and energy to keep the “relationship” alive.

It means some stirring of the emotions.  That’s the really tough bit once a company gets beyond the size of the corner shop.  Relationship is fundamentally related to humanity.  Unfortunately many large organisations have become increasingly obsessed with eliminating the human factor from their business model: That’s because human beings are essentially frail and prone to failing.  We fall back on automation and systems and processes that override the ability of human beings to show discretion.

This whole trend started in manufacturing and for good reason and comes with great benefits.  Just look at the reliability of motor vehicles to see the benefits we consumers have reaped from this kind of approach.

I accept that as any organisations becomes bigger and its operations are stretched beyond a handful of people, we all need systems and processes to keep things running efficiently.

But what I increasingly see are companies trying to manufacture a brand to place on top of that largely inhuman structure and then wondering why their customers don’t see them as different to everyone else.

I see this a lot.  The CEO sets out to transform the corporate culture urging employees to put the customer first; there’s lot of singing and dancing but 18 months down the track, nothing has changed.  Sure, you changed the corporate mission statement and had the brand agency release a new video, but the systems that underpin the delivery to customers remains the dominant influencer of customer experience.  As much as your employees may genuinely want to do the right thing, you’ve built a structure around them that is choking the brand to death.  So your so-called exercise in differentiation dies before it has even started.

So, I keep on coming back to relationship.  And that’s why genuine differentiation is much more difficult than most companies are prepared to accept.  It means reaching down deep and wide into your organisation – not just a one-hour workshop or three month brand review.

You have to design your systems and processes with a genuine desire to positively impact on relationships - on making life better for the people you exist to serve.  That’s why true brand differentiation is a truly rare commodity.  It is expensive and difficult.  That’s why it’s so rare but equally, so valuable.

Eight rules for building brand awareness

One of the most difficult things for any new enterprise or existing organisation with a low profile is the battle for awareness.Marketers sometimes refer to this as a lack of brand presence.  For people in this situation it is often expressed more dourly along the lines of: Why are we ignored?

The answer is not always that easy – especially if you are starting out, money for advertising is limited or non-existent and you are struggling for time.  The most obvious answer for companies with money is to spend some of it and simply buy awareness via advertising.  But even then, you need to be careful you are not simply starting a conversation in a very crowded and noisy room where your message just gets drowned out by all the others trying to get noticed.  So here are some tips for getting noticed:

1. Be very clear on the kinds of people with whom you need to build awareness.  This means avoiding the common mistake of trying to be all things to all people.  It could be that your business or organisation really only needs to create a connection with a very small group of people.  There are plenty of very successful businesses out there – especially in the business-to-business category that are only known by a very small group of people.  Example: Company X sells online purchasing software.  That immediately rules out all the companies that only trade from a physical location and have no online selling capacity – or interest.

2. Be absolutely clear on how you can best express the value your company or organisation presents to the segment of people with whom you want to build awareness.  This may sound stupid but often a business is ignored simply because prospective customers haven't worked out that what you offer is of value to them.  Example: Company X needs to be able to explain that its online purchasing software is unique in the market place and has specific attributes that provides advantages to users over other systems. 

3. Be ruthless in understanding the decision makers among the segment you are targeting.  For example, a business-to-business company may succeed in building awareness among relatively junior employees of a prospective client, while the senior manager who will make the ultimate decision over what is purchased is completely ignorant of you and the value you offer.  Example: Company X builds awareness among the lower echelons of its target client.  That's great, but really building awareness with Joe, the purchasing services manager probably matters a lot more.

4. Think about the mindset of the people with whom you want to start a conversation.  What problems are they most worried about? What is dominating their agenda right now?  The most useful interactions for them are going to be relevant interactions.  If you are in the right place, at the right time with a solution to the problem they are confronting right now, your chances of successful engagement are going to increase ten fold.  Example: Company X realises that right now purchasing managers are paranoid about the security of software system.  It just so happens your software system is ranked number one by independent analysis for security.  Guess what you should be talking about when you make an approach!

5. Think about where you are most likely to be seen by your target audience.  Again, this doesn't have to be hanging out on the street corner – unless that is the street corner where your target audience walks past to work every day or stops at to get their morning coffee.  Example: Company X might be better off just buying a small advertisement on the website of the professional organisation that Jo, the purchasing services manager belongs to – – rather than taking out an ad in the local paper. 

6. Think about what happens once your target audience becomes aware of your existence and wants to engage.  Make sure your website has a "contact us" section – and make sure any inquiries receive a quick response.  Make sure any information about your company is up to date – especially when it comes to contact details.

7. Don't forget the basics – first impressions DO matter.  Read Malcolm Gladwell's blink if you are uncertain what I mean.  The truth is that most people form an impression very quickly and if your website looks unprofessional – or your branding material looks amateurish, you might blow your chance of engagement in the first 10 seconds.

8. Consult a professional communications advisor because there are plenty of options.  It is strange to me how people will prioritise paying money to an accountant for financial advice or to a lawyer for legal advice, but then regard communication as something they can manage themselves. Depending on your background, you might well be able to manage.  But communications is a specialist field and spending a few dollars getting professional advice could be a very valuable investment.

Finally, don't give up.  You have to be persistent.  Sometimes you can do everything right and still not get the outcome you are seeking. But remember that building brand presence takes time and you will get value, even if it takes longer than you wished for – providing you remain consistent and follow my eight rules.

Contracting out your reputation – 5 questions you must ask

We’ve seen a sobering example this month that should send a shudder down the spines of any company executive that contracts out customer sales or service to a contracting supplier.

Energy company AGL was ordered to pay $1.55 million in fines thanks to just one dodgy salesman working for a contractor in South Australia.

We are not talking here about a series of events – the case that’s spun out into major reputational damage and negative publicity involved just one encounter with a householder about switching his retail energy contract. 

Beyond the financial pain, just consider the damage to the company’s brand and reputation. 

Don’t even get me started on the whole idea of pushy salesmen doing the old door-to-door routine. (Yes, I know some sales pointy heads will tell me they do it because it works – but at what cost?)

Incidents like this one highlight the need to ensure any contracted out service includes significant control measures that guarantee the people acting on your company’s behalf live up to your brand promise. 

I strongly advise my clients to look closely at any arrangement they have in place that involves the contracting out of services to third party suppliers and ask these questions:

  1. Does the legally enforceable contract include a requirement that people employed by the contractor understand and will comply with your customer service standards, values and expected brand behaviours?
  2. Does it require that any new employee working for the contractor undergo an overt training program to ensure they understand what is expected of them?
  3. Are you regularly auditing the performance of contractors in relation to employee compliance with your customer service standards in both the letter and spirit of the law?
  4. Are there financial penalties in place where employees contracted by your service supplier fail to meet the standard?
  5. Are you prepared to terminate the contract for repeated contraventions of your service standards?

If you can’t answer “yes” to every one of these five questions, I’d say you are carrying a significant risk that needs to be addressed post haste.

For all full details on the ACCC case click here.

First impressions

Imagine you have 60 seconds to advise a business on how to improve its brand and reputation.  What would you say?

It is never that simple of course. There is no magic bullet solution but there is one piece of advice that I think could make a world of difference to many companies: Think about first impressions.

Number one on my list would be to make sure that the person who answers the phone or greets your clients or customers for the first time is right for the job.

I phoned a large advertising agency recently on behalf of a client with a reasonable budget to spend.  I asked to speak to the Managing Director.  The manner and tone of the young woman who answered the phone was deplorable.  This wasn’t a conversation, it was an interrogation!  Why did I want to speak to him? She sounded impatient, especially when I asked to leave not only my office number but also my mobile number!  I got off the phone feeling angry, resentful and quite frankly p****d off. 

Did this young woman’s employer have any idea how much damage she was doing to their brand and reputation – let alone their sales and retention of existing clients? 

First impressions often become lasting impressions.  Just read Malcolm Gladwell’s book Blink: The fact is, people form opinions of you in the first 10 seconds.  How you look, how you speak, your manner and tone of voice.  If you run a business, have you listened in to the way your receptionist answers the phone lately? Forget analysing the monthly account - this could be the first step to solving your number one business problem.

Grandmothers wearing mini-skirts

There are things in this world that just aren’t right.  Who told politicians it was a good idea to go around kissing babies?  Why do some companies insist on calling me at home in the middle of dinner and then expect me to buy something off them?

Then there is the phenomenon in advertising and marketing that is akin to a grandmother wearing a mini skirt.  I’m talking about those companies who, in an effort to reach out to the younger demographics, decide its time to get down and get trendy.

There are some brands that are just naturally young.  Coca Cola, Virgin and Rip Curl are just a few that come to mind.  But if your company decides you desperately need to connect with Gen Y’s or whoever, avoid at all costs the temptation to go “mini skirt hunting”. 

There are some companies that my kids just want to stay middle aged or even a bit older.  They like it that way. 

A few years ago I was trying to help a respected older company lift its sales to younger people.  We naturally assumed that being part of the “Internet generation” we had to focus our attention online and perhaps show a bit of leg. True, online was a good channel for starting the conversation but a surprisingly large number of the younger folk we surveyed actually wanted to have a face-to-face conversation with someone like…their mum.  If you think about it, it makes a lot of sense. We are talking here about insurance designed to cover you for things you haven’t experienced yet…like perhaps having kids of your own one day.  You’d actually feel much better talking to someone who looks like they might know a bit about it.

If you’re selling surf products, I’m happy to accept the 18 year old in board shorts with tatts.  But many products and services need to remember that credibility doesn’t come from how hip you are but- far more importantly regardless of the generation- how trustworthy you are.