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Friday, November 16, 2007

Branding, systems and price

What do you find when you ask Google for links from the keywords, branding, systems and pricing? Nothing to do with marketing, it seems; at least obviously; one of the first listings is for "Brand Energy and Infrastructure Services," which, I learned, is the parent company for Aluma Systems -- I have heard of Aluma, but never "Brand". We learn new things every day.

A lot of successful "small guys" have a great brand. Their reputation for quality and reliability is impeccable and they have no trouble finding clients. I see this among several of the renovator members at our local home builders' association. They win awards for design quality, keep up with industry developments, contribute to the community; in fact they are all-round good people to do business with -- but they don't consciously think in terms of branding and systems, and (this is somewhat disturbing) they price their services as if they are competing in the commodity-based open market.

To make your brand work best for you, I believe, you need to get the other two elements of business right -- systems and pricing. Systems are your rules, procedures, guidelines and processes. In the purest format, they are often written down in a policy/procedures manual, but the manual doesn't need to be written if the systems are simple, easily understood, and no one is going to mess with them without authority and planning.

(I would argue that the best systems in fact are easy to operate in an unwritten format -- they are a sign that you are not getting caught in bureaucracy and paper-shuffling to run your organiation, and that your internal communications and relationships among employees and management is so smooth that this documentation is simply not necessary. I would further admit, however, that after a certain point of business growth, you need to document things properly, regardless of simplicity.)

Understanding pricing, and having good rules and processes here, is also essential, because if your brand is good, you may be underpricing yourself if you are simply thinking in terms of commodity pricing models. Your reputation and quality may be so high -- and your ability to recruit sufficient employees to continue/maintain this quality so limited -- that the only way you will make 'real money' in your business is to raise your price since your volume cannot increase sufficiently. Of course you are really hitting the jackpot if you can either simplify your systems so that less-skilled people can do the jobs required to the highest quality; or you devise a truly effective recruitment/training system so you can attract and maintain the highest quality labour force, and obtain more employees when required. Here, of course, great branding is also helpful.

As Sonny Lykos noted in his most recent comment, you can have a great automobile brand; but if the car is missing the steering wheel, it won't run. Business is like that -- to get to where you really want to go you have to put all the pieces together properly. You may be fortunate enough to have a great brand. If so, look at your systems and prices to capitalize on it.

1 comment:

Sonny Lykos said...

Excellent column, Mark. And one of the key things you said was:

"....they price their services as if they are competing in the commodity-based open market."

Far too many business people in the service industry do act as though they are selling a product, instead of a service. And even some who do realize they are really service providers, they still compare themselves to their competitors instead of creating a new elevated service category or position where no one else is in but them.

And the reason with the google problem and brand is due to the fact that erroneously, far too many "pros" consider marketing a form of branding.

Marketing, like advertising, may only get one in the door, or get the customer into your store. How the customer "perceives" she was treated is "branding." The customer creates the brand, positively or negatively. Marketing and advertising create the "temptation." Branding is the customer's way of telling the seller if the temptation was worth the decision to succumb to the temptation.

Think of an entertainment park with a roller coaster ride. Advertising gets you into to go to the park. Marketing tempts you to try the ride. But it's the customer's perception of the "experience" of the ride that determines if she'll go on it again, or talk others to go on it.

The caveat is with those "experiences." For with each contact the customer has with your company, anyone in the company, more "experiences" are created.

So one had better assure his/her culture and systems are such that those "perpetual" experiences continue to be positive. One steering wheel removed from a car that's operating, and the subsequent crash causes the loss of the customer too.