I recently met with a potential client to present a proposal for Branding his business. We had met once before and hit it off on a personal level so while we waited for more people to arrive for the meeting we engaged in casual conversation.
I learned that he had extensive experience in manufacturing and worked in various capacities for some of the largest manufacturers on the planet, including as a purchasing agent and process engineer. He now found himself in charge of a small family-owned manufacturing business that he purchased from the founder a couple of months prior.
As the conversation turned to me I shared how my career has evolved from being a creator of images to a creator of brands. Unexpectedly he asked, “How do you quantify what you do? How do you know that specifically what you do has any impact on sales? You know, I have sales guys out there pounding the pavement as we speak. If we start working together, how do I know it isn’t their efforts that increase sales?”
Ah, there’s the engineer. Was wondering for a second.
While I was flattered to hear that the assumption was that sales would increase, I was completely unprepared for that question. “I’ll admit it’s difficult” was the only response I could muster as I sat there like a deer in the headlights.
I continued to tell him about my buddy JT who has built a highly successful business quantifying marketing efforts and shared that JT also happens to literally be a rocket scientist so it must take a lot of brains to figure out a process to quantify and track marketing investments.
Have you ever had one of those moments where you cringe as every word exits your mouth and it is only after you leave the room that you have an epiphany and know exactly what you should have said? Yeah, this was definitely one of those.
On the drive back to my office I kicked myself as I realized that it isn’t difficult at all to gauge the effectiveness of branding and marketing. In fact, it is my opinion that in business today, it is ALL about branding and marketing!
My potential client’s question to me was focused on his sales and what I failed to point out to him is that he should be focused instead on his profitability.
I would agree that it is very likely that his sales people will have some success increasing sales. He openly admitted that the entire operation had become complacent before he bought it so it is no stretch to imagine that they will pick up some low hanging fruit simply by contacting past customers and asking for orders.
Unfortunately, this company has not invested in marketing since Reagan was in office (totally serious). There is nothing at all creating demand or desire for their products. Once those easy relationship-based sales are captured I’m afraid his sales people have only one tool in their arsenal to increase sales: price.
We all know what happens to profitability when your primary sales tool is price. You had better be able to compensate with volume. And there is no way this company is prepared for that battle. They are a tiny player in a niche market dominated by a very large competitor with a strong Brand Message (and established manufacturing in China).
Desire creates the ability to charge more for your products
What my potential client fails to understand is that marketing and branding create desire. Desire creates the ability to charge more for your products. And that, my friends, is the key to increasing their profitability.
By identifying what is unique about a company and its products a clear positioning statement can be created and from that a brand message. Branding is the process of setting up systems to communicate that message through everything your company does. By doing so, your customers receive both consciously and subconsciously the information they need to make a decision to buy your products. By differentiating yourself from your competitors through your brand, price becomes less of an object in the purchase decision.
In the absence of any brand message customers will use price as the driving factor in their purchase decision. In the worst case scenario like we have here, if your competitor has a strong brand message and you do not, your products will be perceived as inferior and will only sell for bargain prices while your competitor receives premium prices regardless of quality and features.
So next time I’m asked about how I can quantify what I do, my response will be quite different. It will be something along these lines, “Wolters Advertising creates branding solutions that have a proven track record of increasing profitability by increasing demand for your product. When your profitability increases, that is entirely a result of the branding and marketing solutions that Wolters Advertising has created. So you can quantify my results by looking at your profit margin.”
How did the meeting go you ask? They are still evaluating my proposal but I’m afraid that my lack of intelligent response to his question most likely cost me the project. It’s generally not a good sign when the meeting degrades into asking my opinion on the free logos that a printer put together for them!