As access to technology continually improves and evolves, innovation becomes an everyday occurrence for the consumer who has an almost endless array of products, services and solutions to choose from.
At the same time, competition among vendors increases exponentially and the ability to differentiate products or services based purely on features or customer service alone is a near impossibility. There is a slim margin of success for companies that offer feature rich products combined with outstanding customer service, that does retain a degree of competitive prowess but eventually due to incessant pressure even the most fortunate of organisations can be tempted to default to competing based on price alone which is without question an unsustainable race to the bottom.
Consumers today are also more brand-aware than ever before and have evolved into critical, thinking buyers who want to spend their money with a company that inspires an emotional connection with them and their values, while solving a real problem for them.
This emotional intelligence takes precedence over flashy advertising and even lower prices. A study analysing shopper habits (The Meaningfully Different Framework, Millward Brown, 2013), found that strong brands were commanding a 13% price premium over weak brands, and a 6% premium over average brands.
The same analysis found that strong brands can also capture, on average, three times the sales volume of weak brands.
This means that competing on price is a fool’s game and a no-win situation. When you compete on price you exist only for the lifespan of the product. A brand, however, spans product life cycles and lasts for years.
The only reliable way to stand out today, no matter what the industry, is to develop a brand that resonates with customers and makes an emotional connection as an authentic and trustworthy brand.
But what is a brand?
A brand is the emotions you inspire. If you have a good reputation and people enjoy their experience dealing with you; if they trust that you are true to your values and an authentic participant in their society, your brand has value to them.
A brand, at its heart, is based on trust and this is a rare commodity that has become eroded in the minds of consumers. Because it is so rare, it is an important asset for companies large and small. Trust is linked to corporate reputation, which is a company’s most valuable commercial asset. By 2015, around 84% of the value of all businesses was intangible value, of which brand value is a key component, according to Ocean Tomo LLC.
How do you develop a brand?
Brand building is all about trust and authenticity. I believe there are two aspects to a brand. The first is the internal brand that defines what the company believes and stands for, in other words, who you are. This is more than a bland company vision that is plastered on the walls of the company. It is the essence of the company, the authentic values and principles your whole company buys into.
If your employees believe in the company and what it does, if they identify with your internal brand, you will automatically have more motivated employees, a positive company culture staffed by motivated people who take better care of customers.
In addition, if your employees trust and believe in the brand, the will naturally take that brand message with them when they leave the office and broadcast it far and wide to family and friends, as well as to their extended circle of friends on social media, which is a powerful and authentic voice in society today.
When this happens, your customers and potential customers will see, feel and experience the brand and its effect. This will expand your internal brand outwards to your customers and the market in general, supported by the most valuable marketing there is – word of mouth.
It’s worth noting that, according to Effectiveness in the Digital Era (2016) by Les Binet and Peter Field, brand-building activity drives much stronger sales growth over periods of 6 months than the temporary boosts driven by short-term sales activity.
Does your brand have that emotional connection to the market? Is it authentic and does it automatically command trust? If it does, you can outpace your competitors in terms of sales and price.
The truth of the market today is that trust and authenticity are the biggest deal makers or breakers. If you create and maintain that emotional brand connection, you create and maintain a lifetime customer who stays with the brand for the long haul.