In 2006 I attended the Return on Marketing Investment (ROMI) Seminar of the Institute on International Research in Fort Myers. I will be posting a bunch of ideas discussed at that seminar. This is the first.
For some time now “branding” has been a focus for many brand teams. But it’s being challenged by the quest for a responsible ROI, a pressure to achieve better returns on marketing spending. The statement that I most remember from the ROMI seminar was this:
Branding has value if it:
· Enables you to command a price premium
· Drives volume
· Increases the average lifetime value of your customers
· Or a combination of these
All with an acceptable ROI. That’s a serious challenge in markets as small as ours. How can we go about it?
- To understand how to face the challenge, we have to remind ourselves what a brand is. A brand is one word you own in the mind of the relevant consumer and which provides value to that consumer. The key words are: one word, ownership, value and the relevant consumer. Often, brand teams try to achieve ownership of that one word through advertising. This often involves highfixed costs (and therefore makes it harder to achieve an acceptable ROI). So, the larger the market, the better. But, what to do if you serve a small market?
- We must realize that advertising is not the only way to achieve ownership of that one word. There are more tools in a marketing mix which can be used to differentiate ourselves from our competitors.
So, we should ask ourselves the following questions.
- Are we unique (or different) in the way we: Conduct our direct selling, Manage and nurture our relationships, Provide customer care, Conduct our public relations, Are involved with our community, Price or distribute our products?
- Does this uniqueness provide value to the consumer, which in turn will provide revenues for us, in the short or long run?
- If we are not unique or different,is there a way we can be? In which area will this “uniqueness” provide the best return for us?
So, when you are next thinking about "branding", think further than "advertising"
I look forward to your comments.