Your Brand Is Protection For Your Profit Margin
(This was originally published on Medium.)
We live in a world of personal brands, big brands, little brands, brands and more brands.
Which is totally fine, but also requires a moment of reflection about what your brand really means to you and your business.
Recently, J. Crew has had some struggles as they have been challenged in their efforts to figure out exactly what business they are in.
Are they a discount brand?
Somewhere stuck in between?
They don’t seem to know and I can tell you from personal experience, that I have no clue.
What’s happening due to this confusion?
The brand of J. Crew is in the dumps and it is taking their business with it.
I bring all of this up because brand confusion has a real impact on the most important aspect of your business, your profit margins.
I know that for some time it has felt fashionable to be “focused on growth” or “pre-revenue” or whatever other euphemism is used to describe a business that isn’t making any money.
But let the story of J. Crew be a cautionary one for all of us because it shows a clear example of the concept that your brand is your business’s defense against low or no margin business.
Recently, I was listening to Mark Ritson talk about marketing and he described being an unapologetic marketer, one focused on generating sales.
I said my view of marketing is that it is a tool to help you make a boatload of money.
In both of our cases, Mark and I are in a position where our brand value is pretty straight forward.
We may have some sort of brand mission or other malarkey to make people feel good about working with us, but the truth of the matter is that I’m focused on generating oodles and oodles of cash!
So you know how likely the right client is to push back on my prices, not very.
Mark is probably in the same boat.
Back to the case of J. Crew, when was the last time you bought anything there? Or, anything full price?
Think about other brands in the same boat: name a few in the comments.
In all cases where you are used to a discount or confused about what is going on, the brand has become a problem.
And, when your brand is a problem, your profits suffer.
How can you make sure your brand isn’t in the same boat?
You begin by understanding what your value is.
You sit down with me, we are talking revenue generation:
What do you do that makes you stand out to your prospects?
Second, once you know your value make sure you target the right audience.
You can’t be everything to everyone.
This morning, I got a newsletter that isn’t online yet from Bob Lefsetz that talked about Apple’s acquisition of Snap. He talked about how in the day of Steve Jobs, Jobs was focused on simplifying the product line and not confusing the customers.
On the other hand, Tim Cook seems to be taking the opposite tact.
I bring this up because being extremely focused on your specific value and your specific customer is a great way to solidify your profit margin.
The more confused people are about what you are doing, the more likely it becomes that they start looking to other companies to solve their issues. Companies that have clearer value propositions and a better focus on their customer.
This throws companies into the habit of having to agressively price and discount to win customers back, further confusing the brand in the consumer’s mind.
Finally, make sure you are talking to your market about your value in a manner that reflects how they like to receive information about your product or service.
Ad agencies are great about showing off the shiny new toys and new tools that are going to solve your advertising and marketing problem.
In most cases, that’s unlikely to be true.
Well, maybe your market isn’t there.
Maybe the channel isn’t the best for driving sales.
Maybe, just maybe, with 10,000 impressions hitting the average person a day, a little more thoughtfulness and specificity is necessary.
The key is to take your specific value and your specific market and focus on hitting them in a manner that is likely to get their attention.
This might not be in the form of an ad campaign.
Instead, it might be some sort of mailer, gift, or PR stunt.
The only thing we do know is that you have to be willing to try different ideas until you get to the people that are your market.
Because if you try to get any market, you might just end up like J. Crew.
Am I wrong? Let me know below!
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Your Brand Is Protection For Your Profit Margin was originally published on Wakeman Consulting Group
