One of the biggest challenges that businesses face is the commoditization of their products and these days even services. Commoditization happens when the marketplace gets overcrowded (Red Ocean) and the players in the market resort to price wars to gain more market share. Price wars are a zero-sum game and gradually drive the market into the ground with increasingly diminishing returns and profits.
Once this happens, businesses begin to falter. With little to no profit, businesses can not reinvest back into developing the brand and the businesses. This leads to deterioration of the product or service offering, cutting corners to stay afloat and a cheapening of the product or service.
So, how do you ensure you do not succumb to this happening in your marketplace? How can you increase the value of your product or service so that you differentiate your brand from others not from a price level but from something else?
Here is the bottom line:
Value is based on perception
Yes, that is true. It has been scientifically proven that perception dictates the value of a product or service or for that matter anything in life. And perception is also dictated by the brand core values.
Take a look at the research paper in the Wine Economics titled Do More Expensive Wines Taste Better? Evidence from a Large Sample of Blind Tastings by Robin Goldsteina, Johan Almenbergb, Anna Dreberc, John W. Emersond, Alexis Herschkowitscha, and Jacob Katza. They say this in their introduction:
“When symbolic content is an important part of consumption, the enjoyment of a good might become decoupled from its innate qualities. The symbolic content of a price tag has been emphasized in marketing research (e.g., Cialdini, 1998). At the same time, when goods with similar characteristics differ in price, a reasonable prior is that the more expensive goodwill, on average, be of a higher quality. People have been shown to expect a positive correlation between price and quality (e.g., Rao and Monroe, 1989). Consis- tent with this expectation, a meta-analysis reports positive correlations between price and quality ratings for most, but not all, of 1,200 product markets, but also finds that the range of these correlations is very large (Tellis and Wernerfelt, 1987).” (source)
Yes, a higher price signifies a higher value. But there are other things that can also be used to signify higher value.
What brand elements determine a higher perceived value?
- A solid brand name
- A well thought out brand story and messaging framework
- A beautifully designed logo design and brand identity
- An elegant and modern website design
- A set of properly optimized and active social media channels
- A properly designed packaging design
- And more…
Why brand strategy is important?
At the core of all successful brands that move away from the Red Ocean and into the Blue Ocean is a solid and well-thought-out brand strategy.
It is strange and funny that most business owners do not understand and invest in brand strategy – the one thing that will set them on a path to success.
Of course, most business owners do not even have an idea of what brand strategy is all about. Couple that with the internet full of misinformation on this topic, it is little surprise that business owners hardly spend any money on increasing the perceived value of their brand.
Most businesses try and spend the least amount on making their brand look and feel good. They try and find the cheapest option for getting their brand logo design and identity created. Usually, they search on Google for the cheapest option for their logo design. This is a fundamental flaw and determines the success of the brand.
You may be thinking – how can the logo design determine the success of the brand. You are right, the humble logo design may not be the only factor in determining the success of the brand but trying to spend as little as possible on the logo design indicates the underlying mindset and the importance this business would place on increasing the perceived value.
It then follows that this business will not invest in a brand strategy, a brand story, a professional-looking website, and any proper content strategy. All these things then become the seeds of a failed brand.
Investing in a robust and differentiating brand strategy is the best investment any business would make. The return on investment is huge!
What brand strategy is and what it is not?
Brand strategy is the overall plan or roadmap of your brand’s “meaning” and the experience that people will have when they interact with your brand. Brand strategy defines what the brand stands for, its values, its vision and mission, and its brand story.
In short, the brand strategy helps position the brand effectively against the competition and in the minds of the target audience.
Brand strategy is not marketing tactics and campaigns. Of course, sometimes, the line could be blurry. Most often, marketing strategies, tactics, and campaigns are derived from brand strategy. Brand strategy is not about increasing the sales of a particular product or service.
Online, you may find a huge range of meanings and explanations of what brand strategy is and a ton of brand strategy ideas. But beware of misinformation or information that is written by content farms just to pad up pages and get the keywords into the mix to help with page rankings on Google. This kind of misinformation may lead you to believe that brans strategy is nothing more than some marketing ideas or tactics to increase sales or offer discounts.
Nothing can be farther from the truth!
In fact, if you want your brand to succeed and increase revenue and profits – start by NOT focusing on increasing sales or revenue.
What? I heard you say. I will explain.
Do NOT focus on increasing sales or revenue!
At least initially and when you are in the brand builder mode.
So what is this brand builder mode?
Every business person needs to be a brand builder first and then a marketer next. But if you look around, you will find the reverse is true. And that is one of the main reasons most new businesses fail. Not because of a lack of audience or customer base. Not because of their products or services. Not even because of lack of marketing.
It is because of not being a brand builder.
However, what most business people tend to do is to focus on getting sales and revenue before they have set up the right foundations and pillars for their brand. It’s like trying to run before you learn to walk.
The result – they stumble and fall. And in some cases with serious injuries.
So what do brand builders do?
Brand builders do the following:
- Obsess on the “why” of their brands
- Try very hard to understand their audience journey to their brand
- Seek to clearly define what their brand stands for
- Identify noble as well as practical core values
- Ensure the core values become the DNA of the brand
- Work hard to create and refine their brand purpose
- Create an internal brand purpose and a higher purpose goal
- Formulate a watertight vision and mission
- Establish a robust and Blue Ocean positioning strategy
- Engineer a beautiful and impactful brand visual language
- Invest in a modern and powerful website
- Spend time, effort, and resources building powerful social media channels
- Work diligently on carefully thought out content strategies
- Spearhead successful marketing campaigns based on brand strategy
What about people who are not brand builders?
Non-brand builders do the following:
- Jump into “sales” mode from day 1
- Do not think about brand fundamentals
- Do not care about the “why” of their brand
- Do not care about core values (except for some brand words they copy from other brands)
- Do not have a brand purpose or a higher purpose goal
- Have a vision and mission that are purely salesy, sometimes selfish, and very short term minded
- Do not know what a positioning strategy is
- Try and spend the least on their logo design and brand identity
- Get the cheapest website to be their primary sales tool
- Do not spend any time, effort, or resources on their social media channels
- Do not spend any resources on content strategies
- Think that offering discounts and slashing prices are marketing campaigns
- A 100 more stupid things that undermine their brands
Do you think the above was a little too harsh?
Well, it should be! If you do not treat your brand properly then it is doomed to fail.
Focus on building a brand
From day 1, spend time, effort, and resources in building a Blue Ocean brand. All the investment will give you rewards far beyond your wildest imagination.
Even if you have been in business for some time now, the best thing you could do is to start from scratch. Most business owners who are struggling complain that they have no time or money to improve their brand perception. They say they are busy trying to keep the boat afloat by paddling hard.
But the best way to keep your boat afloat is by plugging the holes in the boat. By stitching the tears in your sales. By repairing the broken rudder.
Go to great lengths to ensure you differentiate your brand from the competition – beyond the features of your product or service. Differentiate based on a robust brand strategy. Differentiate through an authentic and emotional brand story. Differentiate through connecting with the world-view of your audience and building strong bonds with them.
If required, wipe the slate clean and start afresh. Evaluate your brand name and figure out if it is serving your brand or sabotaging it.
Work out the “why” of your business. Work out what your brand stands for. Work out the purpose of your brand.
Stop wasting money on popular and in-trend marketing gimmicks and useless Google or Facebook advertising and use that money instead to create a top-notch brand identity. Ensure your website is professional and well branded.
Work hard to identify and nail your brand tone and voice based on your audience archetypes. Create a brand archetype that resonates with your audience and then create messaging that aligns with that tone and voice. Work hard to create an authentic voice that is genuine.
So how is all this going to increase the perceived value of your product or service?
How to increase the value of your products or services
I am glad you asked. I will explain.
Value is derived from a lot of tangible factors that include product or service features, quality, customer service, price as well as intangible attributes such as the connection with the brand, the experience of connecting with the brand, what the brand stands for how it sits in your worldview, how the brand message sounds and plays to your beliefs and more.
By building a robust brand first, you can ensure that your brand communicates the right message about your product or service. You enhance the value of your product or service by the sheer power of your brand beliefs and values. People want to buy from human brands. They are tired of faceless entities that are trying to pawn some cheap crap to them.
When you build your brand in the right way, you never have to worry about where you are going to get your customers from. You do not have to worry about sales or revenue. You do not have to worry about profits and reinvesting into the business for higher development.
Here are 10 steps you need to take to increase your brand value:
- Create strong brand fundamentals which include the brand purpose, brand vision, and mission, brand core values
- Work on understanding your audience personas by figuring out their archetypes
- Create your brand persona, voice, and tone by aligning your brand archetype with that of your audience
- Create a brand story with the proper elements such as creed, icons, etc that resonates with your audience
- Craft a message framework that is based on these brand fundamentals
- Invest in creating a brand identity that is professional and matches your brand strategy
- Invest in building a website that acts as a powerful sales tool
- Spend time, effort, and resources in building powerful social media channels
- Figure out a marketing strategy that aligns with your brand strategy (not the other way round)
- Always be building your brand
I hope this post gives you a birds-eye view and understanding of the importance of being a brand builder to increase the perceived value of your products or services. Of course, simply building brand fundamentals will not ensure complete success. You will have to work hard in staying true to your brand story and convincing your customers you are the real deal.