The Economic Power of Small Business Brand Positioning
Over the last 30 years, I’ve had the honor of working with small business owners in some capacity. Most of the time, I’m helping them with sales or marketing issues. The folks I work with are pretty sharp and know a lot about their field and business.
One thing keeps coming up is how to stay ahead of the completion. Mostly that competitor isn’t some neighborhood store; its huge corporations that are now dominating their market. My answer usually focuses on brand awareness. How to connect with their online or local marketplace. Let’s figure out how your small business can benefit from building your brand on the Web.
The Importance of Branding and Positioning in the Small Business Arena.
Positioning and Branding Strategies may be grossly ignored, but are still vital to the bottom line of small businesses. This is especially true when margins are slim and times are tough. How does that work in a local small daycare facility, electronics store or a massage center? Most small business owners are too busy to consider these topics. They are still handling inventory while struggling to make payroll these days.
Positioning and branding can cut the overall cost of your marketing and advertising budget. The U.S. Small Business Administration estimates that marketing and advertising should consume 7 to 8 percent of your gross revenues. This percent estimate applies to businesses that do less than $5 million in sales a year. Taking all expenses into account, the company should reap a net profit between 10 percent and 12 percent. These estimates are guidelines.
What is Small Business Positioning?
Your company’s position in the marketplace is basically what it’s known for. For example, Campbell’s Soup is known for supplying delicious soups for families to enjoy. A positioning strategy refers to a company’s choice of one or two key areas to focus on and excel in the public eye.
Strategic positioning also considers your organization’s strengths and weaknesses. It analyzes your customer and market needs and your competitors’ positions when deciding how to develop your strategy. Campbell Soup Company manufactures more than just soup, but their food division is still the force of their main positioning strategy.
Your positioning strategy doesn’t have to be complicated. This should be a plan to get your business identified with a particular product line or service. For example, a dental office that’s known for its painless extractions and worry-free teeth alignment.
An addiction recovery clinic that is famous for its program, which transitions addicts to a sober lifestyle in just three months. A spa that specializes in a rejuvenating regimen for busy executives. A metal shaping master that teaches students how to create custom car bodies in 90 days.
Ask yourself the right questions before you create a successful positioning strategy. What are the right questions for your company?
· What do you want to be known for?
· Who do you want to be associated with for the next decade?
· Can you satisfy a specific target audience and make a name for yourself in that market successfully?
· If you could make a lot of money and enjoy doing so by serving a specific niche, what would that be.
How Can Local Businesses Benefit from Branding?
When we talk about your brand, we are considering two specific things. We’re talking about your image (visual icon) and the shorthand impression that someone gets when your company name is mentioned.
In the eyes of the public, your company’s image and worth depend on its perceived value and ability to satisfy client needs. What do you actually offer if you use the same tools as everyone else?
What makes your solution the best option for a prospect to consider? Will someone actually remember your message? If everyone in your field were lined up in a hallway, would anyone notice you? Most small business owners never think about brand perception.
Whether you like it or not, you have a reputation. Your brand is the shorthand to that reputation. Think of it as the clothing and hairstyle you choose when going on a blind date. The first impression will be important.
Your brand extend past your store signage, your storefront and your logo. They all need to be consistent, but so must your greeting, your offers and even how you answer the phone. Every part of prospect and customer communication needs to be consistent.
Where are you on the competitiveness scale for your products or services? How many competitors do you have in your market? What can you point to as the defining factors for prospects choosing your company over the others?
If people don’t see a lot of value in working with you over your competitor, they will have no reason to stay with you for the long haul. If they don’t see your resource as valuable or indispensable, they can go anywhere to achieve their objectives. What you offer is nothing special.
De Beers is a Girl’s Best Friend
De Beers is practically a synonym for diamonds. Maybe you have a brilliant plan to create demand the way the De Beers Company did. Photographs of glamorous movie stars covered in diamonds were used as a marketing campaign by De Beers in the 1930s when demand for diamond rings declined in the U.S. A 50 percent increase in diamond sales was achieved within three years.
De Beers sells diamonds. They practically invented the “rarity” of the gemstone. They promoted the concept of the diamond engagement ring back in the 1930s. A diamond ring averages $4,000. Three-quarter of the women in the U.S. get one upon engagement. That diamonds are rare is a fiction of the De Beers company, who oversees the trade worldwide.
If you’re not as creative as the De Beers company, you can still do very well with positioning. Choose a market that’s very large, then find the segment of the market that you know the best. Build your story from the shared values of your target market. The character of your company must be in alignment with your audience.
Sell the system through which you’re going to help the client get results. Use that system as the differentiating factor. No one else has your system. Don’t sell the fried chicken. Sell the “11 Secret Herbs and Spices.” Sell the unique properties or the expected outcome.
Campbell’s Soup Company’s Branding Story
Campbell’s took the water out of their soups and became a brand-leader. The company started out as a preserve merchant. They canned vegetables back in the 19th century. In 1895, they branched into the soup business. In 1897, they came up with the radical idea of removing the water from their soups.
This feature offered a lot of creative options to homemakers. They could use the soups in a variety of recipes. By 1916, there were Campbell’s Condensed Soup recipes in households across the country. The company became so recognizable for soup that they added “Soup” in their company name.
That’s the power of marketing and branding. How does that factor into your situation? Well, consider your product or service for a few minutes. What is your story and the history behind your company? How do you promote the results of your service or product to your audience? Can you give your results a memorable name?
An optometrist I worked with wanted to create a specific niche for her business, since sales of eyeglasses were slumping. The hot online retailers Warby Parker had cut into the local market in a big way. We looked at the various demographics in her city and how she approached her work.
She was a working mom in a city with a heavy tech workforce. There were thousands of women who worked day in and day out on computers for long hours. Many of those women were hitting their forties. That’s around the time that our eyes change.
If you’re a working mom who is busy taking care of your family, you might take care of yourself last. So, the doctor began reaching out to working moms who racked up a lot of screen-time. She published a variety of stories about changing eyesight in women and why it’s important to take care of your vision as you approach middle age.
She did Q&A on the subjects of computer glasses, how dry eyes affect contacts and a lot more. She built a name for herself as the computer vision specialist. Her campaigns targeted moms who spend a lot of time working on computers and were too busy to take care of themselves.
It didn’t take long for that content to pay off when she promoted her “Computer Time” campaign. Since she had built up the branding for her specific market, her offers were easily recognized and local prospects took advantage of the promotions.
There wasn’t anything clever in the copy. Local working women on Facebook and Instagram recognized the branding. They trusted the source since her content connected with them. They were now aware of the effects of menopause on eyesight, for example. They’ve learned about intraocular pressure and how hormones can influence its levels.
Potential clients are going to work with a company that they have the highest confidence in. If they are going to make a choice between company A or the person who teaches them how to take care of their eyes, the choice is fairly easy. Warby Parker will still make money in her city.
However, local women, forty and older, who work with computers day-in and day-out will look to someone who understands their needs. They will continue to discover the “Computer Time” promotion for protecting their eyes for the long haul.
This is leadership brand positioning. This is positioning that shows leadership in an area where our doctor is a big fish in a small pond. The “Computer Time” program her local brand. She even partners with other wellness professionals in the area to cross-promote services to her particular demographic.
Her eye-safety education program is in the local newspaper. It’s on social media. It’s syndicated for a wider audience. Brand positioning leaders educate us with ideas that make sense. We can grasp the need to take action on a topic because the experts have given us a reason to do so. The expert builds trust so that we are confident in our decision to seek them out.
Build Trust in Your System
Power brand positioning is about becoming the best option for your targeted prospects. Your message will resonate because you’ve educated your audience before pitching to them. They are gravitating toward your offer, because it speaks directly to their needs.
Your system is unique because you’ve taken the time to pull ahead of your competition by informing and engaging your audience. They’re familiar with your system and your approach to their problems. If you can build a brand-centric system that’s geared to a specific audience, you’ll find your advertising to be much more productive and cost less than your competition.
Cut Advertising Costs by Investing in Your Brand
So, why is it cheaper in the long run to build your brand and positioning? Companies that are trusted in their niche can achieve a higher rate of conversion for their ad dollars. The average conversion rate for an online sale is about 3%. Most advertisers never try to connect with those prospects a second time.
Apple Computers studied how many trips a prospect will make to a retail store before deciding to become a buyer. The resulting stat came in at 6–7 trips. They’ve concluded that less than 2% of sales come from an initial contact while 80% of sales come only after AT LEAST five contacts or impressions.
Effective brand positioning means effective communication with the marketplace. Apple knows who they want as their customers and they build their branding around that market demographic. Apple can build a large list of customers and prospects with little effort.
They can communicate to them in the way that appeals to Apple consumers’ sensibilities. Convincing a dedicated fanbase to try your next product or service is much cheaper than convincing people who don’t know you.
Imagine if you built an email list of 10,000 customers, prospects or followers and invested in engaging with them. You ran a promotional campaign but gave your list a chance to take advantage of the offer first. That email marketing series would cost you very little compared to an online or offline ad campaign.
If you received a 1% to 3% conversion on that first email campaign, you’d have made a profit up front. Because you have a list, you can connect with people who know your company over and over. The average sale can take up to 7 or 8 individual impressions.
If your market trusts you and associates you with a specific product or solution, your ad dollars will go much farther. It will cost you less to convert a prospect into a customer and customers into clients. That’s the ultimate power of brand positioning.
