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Marketing isn’t brain surgery. Fundamentally, ‘marketing’ is just another word for ‘communication,’ and we all know how to communicate.
Since we’ve all been exposed to marketing and advertising from a young age, it’s tempting to think we actually know more than we do. It's easy to say, “Gosh, that was one of the worst commercials I’ve ever seen,” but developing a strategy that will sell more widgets is quite a bit more complicated, especially when you’re spending your own – or your company’s – budget.
There are more marketing media, more ways to spend marketing budgets, and more ‘experts’ with more opinions than ever before. Such a variety of choices can make it difficult for even large, established companies to arrive at their marketing strategies, let alone small businesses with limited budgets, who have to make every dollar work like ten – and who don’t have room for error. How do you know what kind of marketing you need, or how much you should spend? Who is your target audience? Where are they, and how can you get their attention? How do you know when it’s time to call in the professionals?
Over the next few months, Marketing Explained will examine some basic marketing and advertising issues, designed to answer some of the most common questions.
Branding and the bottom line
Accountants have been valuing the ‘goodwill’ of a company for years with the notion that an established business is more valuable than a new one. But, a brand is more than just an established company. It is a complex relationship between a product, service or company and the customer. A brand is reinforced over time through a series of interactions between the product and the consumer. All of these interactions contribute to our understanding of what Coke is – it’s not just a drink; it’s a shortcut to a memory of good times.
How does this translate to the bottom line?
When there is a strong brand relationship, the brand sells more stuff. The brand relationship can be seen as a ‘communications shortcut’. Coca-Cola does not have to write on every label of every bottle: “Inside is a tasty, sweet, fizzy, drink that will quench your thirst and evoke happiness. It will deliver the same benefits as the last drink you had in a bottle that looked like this.” All they need to show is the red and white logo, and your brain fills in the rest.
When there is a brand relationship, the cost to acquire and retain customers is lowered substantially, which means volume goes up, and cost of goods sold goes down.
The value for small business:
Increasing volume and decreasing costs is good for small businesses, too. Here’s how a brand can help:
- Make a small company look like a big one. In this era of the ‘virtual company,’ the small business that takes the time to create a strong brand identity (logo, letterhead, business cards and communications materials consistent across all media) can have as much credibility as a big company and land business that may otherwise go to those big companies.
- Increase revenue. People will generally pay more for a branded product than they will for a non-branded one. A small business that moves beyond the individual (“Joe Smith, Consultant”) to the organization (“Smith Consulting Group, Inc.”) can generally charge higher prices.
- Increase scalability. Small businesses’ reliance on the owner/founder being present means that if the owner/founder leaves or isn’t available, the company is essentially valueless. Building a brand and creating customers who are loyal to the brand, not the individual, means the owner does not have to be involved in every project, and that the owner can sell the business as an asset with value.
- Bridge a geographical divide. Small businesses are often dependent on the ability to work ‘virtually,’ but if clients/customers never meet you in person or visit your office, it can be difficult to attain the comfort level required to make them feel good about writing a cheque to someone who is just a voice on the other end of the phone. A strong brand is powerful reassurance.
Branding can be a very complex issue, and we’ve only touched on some very basic points here. Small businesses which commit to building a brand as they build the company will find, eventually, that there are real benefits for the bottom line.
Questions? Please don’t hesitate to contact me at sarah@stayawake.tv or phone 416.809.7829.
Sarah Welstead
After several years in advertising agencies and internet consulting firms, Sarah started her own ad agency, StayAwake, last year. A member of DigitalEve since 2001, Sarah has written white papers and articles on user experience and networked communications for a number of publications, including Broken Pencil and Harcourt Canada.
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