I recently met with the owner of a consumer goods business – let’s call it OldCorp – that is 90 years old. It’s a family business. He’s the second generation at the helm. His parents bought the firm, in a distressed sale, during the Great Depression. Back then, very little attention was paid to branding. You just slapped a label on your product and went door to door, trying to get retailers to stock it. The family did well for themselves that way, growing the business into a regional player. Today, they’re a good, solid business, but still a regional player. That would be fine except, in the intervening decades, two competitors have grown to national prominence. One other has become a much better-known regional force. While OldCorp can still count on its regular customers to keep it going. It can’t grow because most consumers can name the top three brands in the market but can’t ever think of the fourth – OldCorp. It finds itself in the awkward position of being a 90-year-old challenger brand. Is it too late for it to make a run at the market leaders?
OK. This bit is for all the startups and small businesses out there. And maybe for one or two middle-market businesses too. But most middle-market firms, and certainly all the big businesses, have already learned this lesson: Don’t EVER be the cheapest solution! That is the kiss of death for any brand. Consumers and business purchasers always put downward pressure on prices. Everyone’s a bargain hunter. But that doesn’t mean they want the cheapest price. That means they want the best value. When your competitors lower their prices, don’t take the bait! Do your best to hold your ground and justify your higher price by pointing out the extra value you give for it. Let’s say your margin is $2 per unit and your competitor is willing to live with a $1 margin. That means someone else is willing to live with 99¢, And someone else with 98¢. You can see where it leads. Just ask Papa John’s Pizza.
I know quite a few professional types – lawyers, CPAs, bankers, etc. So I often hear of their struggles to differentiate their firms from their competition. A bank is a bank is a bank, right? They all offer the same checking accounts, savings accounts, lines of credit, safety deposit boxes, home loans, car loans, etc. They all hit you with fees one way or the other. Mid-sized law firms and accountancies often also suffer from this kind of apparent sameness. In a world of conservative suits, how does one stand out and become known? Other types of businesses, mostly in B2B, manufacturers and the like, also view themselves as “parity” brands. So I thought I’d jot down a few notes about the possible ways these kinds of businesses should reimagine themselves for distinction. You have to start by knowing your market.
A couple of years ago, Boardwalk was competing for a large piece of business, a brand refresh for a well-known resort and entertainment destination. After a lot of work on what, for us, was a huge proposal document (and two in-person presentations), we made it to the finalist stage along with two other competitors. To my dismay, I learned the other two were large, global consulting firms with resources that Boardwalk could only dream about. Worse, I knew their bids were likely to be three to four times more than what we proposed. Regular readers of this blog know how much I preach that you never want to be the least expensive option. I was commiserating with a friend over this state of affairs when he corrected me, “No, Kevin. You’re not the cheap option. You’re the boutique option.” It seems silly but, once he said that, everything seemed better. He made me realize that, in this context, “inexpensive” didn’t necessarily signify a second-rate solution. Rather, it meant the other two bidders had bloated overheads and, worse, an inflated evaluation of the worth of their expertise. I was no longer afraid of the final round of competition. I even had a pithy line about the client shouldn’t have to pay for the consultant’s Johannesburg office. Or something like that. I was ready.
Every marketable thing needs to find a market to love it. The ideal is to create love affairs such as the romance between Apple and Apple devotees, or between bikers and Harley Davidson, or between Lego and children everywhere. This is brand loyalty on steroids. To do this, one must identify, make and keep a brand promise that never fails to delight. And that requires careful positioning. The world is full of other brands, competing, commanding attention, cluttering up the minds of buyers. In such a world, no brand can succeed for long if it is not positioned in a way that maximizes its attractiveness to its best prospective customers while also putting its competition at a disadvantage. Proper positioning takes some effort. No one person can be in command of all the competing narratives in the world, so you can’t just trust your instincts alone. Every brand needs a formal positioning statement.
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