This month’s discussion is guaranteed to cure your selling blues by reviewing the single most important marketing principle of all… yet, amazingly, one that most VARs neglect almost entirely.
This is not a quick shot in the arm, mind you. You can’t apply this principle on Tuesday and expect a huge order on Friday. But it WILL bring you great success.
It is a principle that is so well respected in professional marketing circles that no successful business operates without it and (from a customer’s perspective) you can hardly make a buying choice in your own business or personal life without being swayed by its effects.
If you can’t figure it out, here’s a hint in the form of a riddle that my friend Steve Olsen called me with from California the other day.
Steve asked me, “What’s the difference between a Hoover and a Harley?”
“I dunno.” I said.
“What possibly could be the difference between a Hoover and a Harley?”
“The position of the dirtbag.”
Not bad, Steve. A dirty joke without the smut.
What makes this joke funny, however, is more than a play on the word dirtbag, which isn’t funny by itself. It is also that we already know the two products.
We know that Hoover is one of many brand names of vacuum cleaners. More importantly, we know Harley as one of the world’s truly romantic brand names synonymous not just with road bikes but with the big, bad, mother of all bikes.
There are many other motorcycle companies, but they don’t have the same brand image that Harley Davidson has. This joke just wouldn’t work if we asked the difference between a Hoover and a Honda. So, the key to this joke, as with most marketing success, is the effectiveness of brand identification.
Consider that, for the most part, a shoe is just a shoe. Some shoes may feel more comfortable on your particular feet than others, of course. But you don’t really know that until you try them on, do you?
So how is it that every kid and many adults I know prefer Nike brand shoes even before they try them on? Could it be the sweeping logo design. Could it be the Michael Jordan endorsement. Could it be a brand identification that is so strong that Nike forces every other sport shoe off the court. Branding impacts every product and service.
How about branding success with drinking water. I’m not talking about flavored water or soda. I mean just plain water. Without it we die and it doesn’t much matter which water we drink to stay alive after a vigorous hike through the dessert.
But when we dilettantes have to much time on our hands down at the local “gourmet” supermarket we impart properties to different brands of water that they just don’t have… if we are really honest about it. That is part of this branding thing.
In our own industry, a study by Reseller Management Magazine of VAR readers showed that 85% of us recommended specific product brands at the point of sale rather than generic. In my own survey of customer attitudes, I found that most buyers will ask our opinion, not indicating brand bias, but, once we make our recommendations, they then follow up with brand specific questions.
“Would there be any benefit from using an HP printer?”, “Would we get better service with an IBM PC?”, “Should we standardize on Microsoft Office?”, “Is AT&T the right choice?”, etc. These are brand awareness questions that you and I face every time we make a sales presentation.
Ron Seredian is Media Relations Manager for American Power Conversion. Prior to this year, Ron worked for a smaller uninterruptible power supply manufacturer that competes with APC, but one that doesn’t have the brand recognition.
“Wherever we went to sell battery backup, they would ask us if we sold APC when they really meant UPS. APC had so effectively branded the market that we always fought an uphill fight.”
Evidently, Ron didn’t feel that his career path in the uninterruptible power supply business was that uninterruptible, so he moved to a winning brand name.
Apple, in spite of all of its current ills , for a long time had practically every school teacher in America panicked that those same school teachers would be bested by their own students unless they got their schools to standardize on classroom MACs, which they felt were easier that PCs and easy enough even for Education majors to master. So, most schools bought MACs.
You can think of hundreds of cases where branding has played a part. Those successful people at Computer Associates use branding quite successfully to capture channel loyalty through extensive marketing of “CA’s VARsity Club” offering.
IBM, too, has polished its once tarnished image and has regained a brand image of value to channel players, once again.
Just what is a “brand image”, how does it work to create a buying psychology and how can we VARs use branding to improve our own sales numbers?
Just ask Andrew F. Kallfelz, Business Unit Manager at American Power Conversion. Kallfelz has spent much of his education and business life thinking about branding.
He starts by defining a brand simply as “a collection of associations that mean something to the customer. The key”, according to Kallfelz, “is to influence what those associations will be”.
How do you get customers to make the associations that are most favorable to you and result in buying what you sell?
According to Kallfelz, “You can use symbols, sound and color to create and manage those associations, but, to accomplish your selling objective, you need to ask yourself:
1. What do you want the associations with your brand to be?
2. What do you need to say in order to have the prospect see the association you want?” simply put, can you come up with a slogan, or logo, that derives from a mission statement?
Can you project something into the market that is new, specific to solving a problem, is different in some critical way, or is so darn easy to remember that it crowds every competitor out of your prospect’s thoughts like they did at 1(800) FLOWERS?
These are hard questions, but the answers will propel you to success faster than faster acting Anacin (or is it Bufferin?).
Kallfelz notes that APC has been very good at doing that.
In 1985 it sold its first battery backup unit and had no brand recognition at all. They worked on it and by 1988, they climbed to $18 million in sales. In 1995, as the definitive brand name in power protection, they topped $515 million.
Lest you fear to take on APC, or the Goliath in your own market niche, remember that when APC started out they were 20th out of 20 producers of power related products.
Consider, too, how, several years ago everyone lamented that the processor market was as good as dead in this country. Then a branding promotion came along that said simply “Intel inside” and look how much farther that company’s market cap has come since.
The healthy thing about branding is that it can help every David to become a Goliath (making way for newer and subsequent Davids to follow).
One of the newest “Davids” is Cyrix Corporation, which is building a new and powerful brand of, well, newer and more powerful chips. Cyrix Marketing Manager Mike Moorman told me, recently, that the company has a two pronged strategy we can learn from for adding value to a brand name.
Firstly, it is OEMing what it considers “the fastest chip around”. If you want to be a brand success, it helps, certainly, to have a good product to do it with. Secondly, Cyrix is building complete systems which it is selling to targeted fortune 500 and government.
Moorman says that they did not get into the systems business to make money, but as a strategy to create brand awareness for Cyrix. This, he feels, will support OEM efforts and pull additional large user repeat orders through the channel. Such, Moorman feels, is the power of branding.
Branding is not only for manufacturers, or very large companies.
According to Steve Twombley, beloved Publisher of Reseller Management Magazine, there is so much volatility, margin chopping and trench warfare in the channel that branding is the key to allowing VARs to rise above the fray.
“Brand recognition provides you with credibility.” says Twombley. “It highlights longevity and reliability. It provides prospects and clients with comfort about you. Branding is an important concept where you have established recognition for your own brand.”
Once established, the added value benefits of branding are huge. Future promotions are leveraged off of the recognition of your name and then even your smaller promotions bring greater returns then they would without a known brand behind them.
Brand recognition is clearly the key to ongoing success. Unfortunately, the biggest problem most VARs face is that they know of only two ways to get brand recognition:
- More expensive.
But, this doesn’t have to be the case. Although companies like the new Lucent Technologies (ne AT&T) have used huge sums of money to effectively short cut to quick branding success, others have established a credible brand value and loyalty via less expensive routes.
Think of PKWARE’s PKZIP, PROCOMM PLUS, Netscape, Yahoo, and, my favorite longshot on the outside, Submit-it.com. These companies didn’t start out with huge brand budgets, but they did start out with a strategy to would win the hearts and minds of their market with consistent and focused promotion of their respective identities.
If you cannot afford a full court press, Steve Twombley suggests that you enlist the support of your vendors for coop help. Adding the name of the branded products you sell right onto your letterhead and business cards associates your own brand with bigger, more comforting brands.
Coop mailings, coop advertising and other coop promotions associate your name with quality, stability, reliability and other forms of greatness.
Beside coop programs, it pays to consider targeting specific local, or regional markets at first and grow your name geographically as you grow qualitatively. NETCOM and Earthlink are two local California Internet access providers who have now expanded nationally after building stable regional platforms and names. NETCOM and Earthlink also chose brand names that didn’t require lots of explaining as to what they do, which helps.
InFocus Systems, Willsonville, OR, is a brand name company that sells projectors for giving visual presentations from notebook PCs. Scott W. Nielson, Senior Marketing Manager says the secret to successful branding on a budget is to leverage partnerships so that you look bigger than you really are.
InFocus did this by trading $150,000 worth of projectors with CNN for a humongous amount of advertising in inflight magazines and on airport billboards.
The strategy was to not only push through a lot of product, but to place their name squarely in the path of every traveling presenter before he or she got on a plane, on the plane, and on the way to baggage claim, giving the impression that “I see this company name everywhere I go. They must be big.”
As you can see, apply branding to your marketing plan can get you out of that one-sale-at-a-time rut and into the big time. Getting back to our riddle, what’s the real difference between a Hoover and a Harley?
To a brand marketer, it’s that Harley, still respectful of its brand franchise, is regaining its old market share. Hoover isn’t.