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Manage your Brand and your Value Proposition to Manage your Prices and Profits
Customers perceptions of your products are the key to delivering profitable sales says Michael Smith, Director, Red Page Ltd.
In a climate of recession and commercial chaos, it is very easy for companies to abandon marketing and go for sales at any cost. But this is the worst thing you can do because customers are looking for answers to problems, not just ways of saving money. Unless you panic.
The problem of defaulting to cheap prices arises in a recession because companies suddenly forget what makes their product ranges good. Instead they run like headless chickens into the “pile ‘em high, sell ‘em cheap” solutions offered by online retailers such as Amazon and Play.com. Result? Customers don’t see your company, your brand, your value proposition; they instead see the branding, pricing and value proposition of the supplier. Oh dear…
And then it gets worse. Companies who decide to rely on third parties to convey their brand values suddenly realise that they are losing control of their customers and their customers’ perceptions. Do companies like Amazon pass onto the supplier the data on the people who are ordering their products? No. Are they altruistic in the discounts they offer to the supplier? No. So your brand perception is hijacked, along with your pricing, net revenue and, more importantly, your customer data. That’s right, you lose access to your real end-user customers – the very people who you should be contacting to grow your own business.
Even if your business is fundamentally reliant on third parties for sales, make sure at all costs that you invest in your brand assets to keep people coming back to you. A brand is not a logo, it is an inherent set of properties which distinguish you from your competitors. These inherent properties are otherwise known as your value proposition and you abandon them at your peril.
What are your brand assets that you can exploit in your marketing and use to retain customers and grow profitable sales? If the answer is low prices and cutting your costs to stay profitable then you’re in the wrong business. Focus on your customers and their needs for sure, but never lose sight of why you got into business – to make money for your company. This can only be achieved by engaging new customers, earning their trust, and converting them to brand advocates who keep coming back for more.
If you only remember one thing, remember that aiming for low prices and relying on third parties to safeguard your business ends up divorcing you from your real customers. Try to understand your brand and communicate it to your real end-user, before it is too late.
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