It’s often said that more than half of new businesses fail during the first five years of existence. Research shows that this may be due to a variety of reasons ranging from a lack of market need to founders having a fall out. But one theme is common across all. The lack of a great brand strategy for customer acquisition.
In today’s digital world where competition is just a click away, brand strategy is critical to success. Beginning with telling customers how our brand is better than the competitors to ending with helping them place positive reviews on social media, the role of brand strategy in customer acquisition is key.
As business consultants, we have seen several startups with great value propositions fail. And most of them fail because a great product or service alone cannot build a profitable business. Every company should have a coherent brand strategy for customer acquisition. And great brand strategy leads to competitive advantage.
In this note, I have shared the top aspects to three business challenges a great brand strategy can address.
Brands either have adequate awareness or are unknown. If a customer does not know about a brand – he won’t buy it. Most firms are aware of this and hence invest in an advertising campaign (digital or traditional).
For young brands or those facing stiff competition, it is imperative that all marketing efforts are aimed at letting the maximum number of potential customers know what their brand offers in a competitive context. It is best to keep the message simple, focused on what they have to offer and channel all efforts to create baseline awareness.
Eg. A client with ambitious sales targets understood their key problem was lack of awareness with people looking to buy this product online. Their limited budgets had been used in multiple traditional and digital campaigns promoting several offerings with sub-optimal impact.
We recommended the company streamline its offerings, make their website ‘buy friendly’ and invest in a good SEO partner. We supported them with a limited social marketing calendar promoting their competitive advantage and addressing various drivers of choice. After six months, our client grew significantly, moving towards profitable growth. A year later, our client revised his service offerings, upped his digital promotion and increased focus on SEO. This effectively stopped other players in the market who were launching ‘copy cat’ marketing plans thereby cementing his lead.
Brand awareness is a widely know concept. However relevance, an equally important concept, is often forgotten. This is because we tend to forget that customers have options and are continuously evaluating them.
As a result, it is necessary to understand how our brand offers a competitive advantage to prospective buyers. This means understanding whether the offering is differentiated from competition and if the proposition is compelling enough to catapult into the consideration set. In situation we need to consider both direct and indirect competition.
Eg. An IT services firm wanted to launch a new supply chain software targeted at the wholesale and distributor customer. Our client was confident that there was no other product offering this service in the market.
As part of our engagement, we visited distributors and evaluated their response to the new offering. While many said it was interesting, they felt that their existing accounting software had a similar offering. This offering was not as cutting edge as our client’s software but could get the job done at no additional cost. Hence target customer already had an acceptable option, at nominal cost, from an un-mapped competitive player.
In this situation there was no real competitive advantage and a successful launch would have been difficult.
Once the brand promise has been defined and the competitive advantage crystallized, brand communication is initiated. For maximum efficiency, it is necessary to ensure brand communication stands out in a competitive context. Else the advertising money will get wasted.
Another point to consider is whether the communication is addressing the real category drivers to help enter the consideration set. Price, while heavily quoted, is not often the only choice criteria. Brand image, quality, service and many other factors drive choice.
Eg. Often while watching television or You Tube – we end up being entertained during the commercial breaks. However after the ad is over, most of us would be hard pressed to remember the brand name in question. This is a terrible waste of money.
I love looking at apparel ads in my FB timeline. But I have never bought any of the brands being advertised there. This is because most of the ads and products they promote look very much alike. So after some window shopping, I move along to something equally entertaining. These brands do not get a share of my wallet.
We believe the role of marketing is to create awareness of brand promise, help sell a brand’s offering or to build goodwill over a period of time. A brand cannot grow if its leaders ignore the competitive context and the customer’s perspective of how the brand stacks up against the other players in the market. Branding strategy needs to help a brand stay relevant and stand out in the competitive context.
Thanks for reading! If you want to read more about branding tools, retail strategy and profitable growth, do visit our blog or check out our site Centric Brand Advisors LLP.
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