Is branding necessary? Can branding be replaced for service-based businesses?

Is branding necessary? Can branding be replaced for service-based businesses?

 

 

Forget branding. Unless you sell soap. Or cornflakes. Or petrol.

Businesses; services; products; people. Can they all be considered brands? Are they all targets for brand building? There is a whole sub-section of the marketing profession that’s fixated by “branding.” 

I'm quite prepared to be shot down in flames, but in this article I reveal the reason why I’ve singled out the word.

Style and substance or smoke and mirrors?

Business owners are regularly subjected to a deluge of jargon and marketingese extolling the virtues and benefits of this recently discovered discipline. Experts, authors and academics – some sanctioned, some self-appointed, all well-meaning – trot out the line that what’s applicable for soap, cornflakes and petrol applies equally to service professionals.

In 25 years as a provider of creative services to small business, I’m yet to be convinced that the discipline of “branding” is anything more than smoke and mirrors. At risk of being labelled at best misguided and at worst ignorant by fellow marketing professionals, I contend that “branding” is wasted on service-based businesses.

Is branding necessary?

If you’re a service professional or home-based small business you need three key things. 1. An identity. 2. A plan. And 3. a reputation. One can be designed. One can be created. One must be built.

The last thing you need is branding. Too many small business owners get sucked into the idea that branding is vital for their success. It’s often seen as some sort of panacea that can be applied to a business as an afterthought. It’s not.

Let’s clear up some myths, misgivings and misunderstandings. The first thing to look at is the difference in opinion as to what constitutes a brand and the pseudo discipline of “branding.”

Brands, in a traditional sense, have been around since the beginning of the consumer age. Their origins began in the Industrial Revolution when distinguishing marks were applied to mass-produced packaged products. Commodities like salt, tea and cattle, were branded so one could be identified from its competitors. Brand became synonymous with product.

Brands come of age

With television came the separation of brand as product from brand as psychological construct. Marketers began to convince consumers to pay higher prices for products through artificially created perceptions of value. And repetitive advertising fueled the fire. As the requirement for more sophisticated degrees of value perception increased, graphic designers came to the fore. Corporate Identity programs of symbols, logos and printed communication were created for companies and their products/brands.

A firm’s Corporate Image program came to include all forms of visual identification, including advertising. Standards were imposed on everything associated with public perception of the company, to ensure consistency across a wide range of media.

About 25 years ago, the lines between the creative services became increasingly blurred. Advertising and marketing agencies began to incorporate aspects of the graphic design industry into their practices in order to spread their income base. A case was made for companies to invest in end-to-end management of their entire marketing budgets. Driven by convergence, the practice of Branding was born. A complete discipline sprang up overnight, following the guidelines established and espoused by various authors, academics and self-styled gurus. And with it, the notion that the rules previously applied to products could also be applied to people. That means you, oh service professional.

Can service businesses be branded?

In my view, services and brands are not related, altho’ many practitioners would have you think they are.

You’re encouraged to think of your brand(ing) as being something outside of the business, a sort of over-arching umbrella that encompasses everything you do. It’s something you must practice and cannot afford to be without – vitally important to your success.

You are supposed to be in control of your brand, by virtue of the images and attitude you present to the market. Brand(ing) is seen as a tool you can use to manipulate people into believing whatever message you wish to convey. “You absolutely must have a recognisable and differentiated brand,” says the consultant.

But when was the last time someone asked what brand of accountant you buy?

The business IS the brand

I argue that we have simply got our terminology badly mixed up. Brands, branding, brand identity, brand personality, brand value, brand equity etc. have become ubiquitous and increasingly difficult to define. Are we talking about the logo, the advertising, or the PR? Do we mean the service we are providing, the principals and staff or the business entity itself? And if it’s all of those things simultaneously, why do we bother using any other word at all?

Can we please return to the idea that brand is a noun, not a verb? Call it semantics if you like, but in the case of professional and service-based businesses, I can think of no example where (the word) brand is used, where another is not more applicable.

For example, here is a passage taken directly from the website of a well-known ‘branding’ agency. See which version makes more sense – the italicised original, or my (emboldened) version.

As experts in the field of brand development (creative marketing), we work with clients across many categories to define and position their brand (business for success). Whether you’re refreshing your brand (visual identity) or repositioning your brand (business), merging businesses, or developing a start-up — if you’re looking for effective and proven brand development (creative marketing campaigns) to assist in building your business, give us a call.

What were they actually trying to say? Do you agree with my interpretation? Or does the original make more sense to you?

Brands and products

When reading “branding” case studies or treatises, I note that in almost every case of successful business “branding,” product related examples are used.

McDonalds, Nike and Coca Cola are prime global examples. Virgin, Harley Davidson and IBM are others. The only exceptions to the product-as-brand rule I can think of are web-based retailers and information providers such as Amazon, Google and Facebook. Like Hoover, Xerox and Asprin before them, these trademarks (brands) have become genericised terms in our everyday language.

Even so, very few product brands achieve a cross-product icon status. Apple is one. Devotees will own an iPhone, an iMac and an iPad. But be wearing a Nike top, Adidas sneakers and Puma hoodie, all at the same time! Lots of brand loyalty there. The instances where a person’s brand loyalty crosses line extension boundaries are few and far between.

In two car households, very seldom will the 4WD family mover be the same brand as the hatchback. Owners of BMWs don’t think any less of Mercedes Benz cars. They simply aren’t BMWs.

In the supermarket, we tend to buy the brand that for a variety of reasons, suits us best in each product category. We buy Colgate toothpaste, Kellogs Cocoa Pops and Crisco oil. Just because we like Heinz tomato sauce and Kraft cheese slices, doesn’t mean we’ll also buy Heinz baked beans or Kraft vegetable dip.

What’s your brand preference?

Our brand preference is initially driven by a basic need. The (product) buying process starts with a need: I need baked beans. I will get the brand I usually buy, because I perceive it fits my requirements better than other choices. Unless my requirements change, (price sensitivity, performance failure etc.) I’ll continue buying this brand. If my preferred brand is unavailable, I’ll look for the next best choice, depending on my values.

During a recent visit to the USA, I found myself supermarket shopping on my own. Being a keen cook, I needed several specialised packaged products for a large family barbeque – spices, sauces, dips, nibbles etc. When searching the shelves, there was not a single familiar name. So my choices were influenced by a combination of factors: visual appeal of the packaging, perceived product performance, perceived closeness of new product to those I’m familiar with, value for money. It was a very interesting experiment, which incidentally took much, much longer than expected.

The B2B buying process

The same phenomenon is true with business-to-business or business-to-consumer services. Your prospect does not buy on a whim. She will not invest in an IT network and server based solely on a magazine ad. He will not go in to have a tooth pulled just because he happens to be driving past a dentist. These are reasoned purchases and as the fee to value ratio rises, so does the time taken to reach a buying decision.

Customers buying business services follow a four phase buying pattern, with only the last phase being based on price. These phases are: 

1. Functionality:

Where a service meets a certain need or does a certain thing that cannot be accomplished in any other manner

2. Reliability:

When two or more competitors offer similar services that have the same functionality, customers turn to the competitor whose service offers the better reliability

3. Convenience:

When competitors have services that offer the same functionality and the same relative reliability, consumers turn to convenience – those services that are the most convenient to use and the companies that are the most convenient to work with

4. Lastly, price:

When competitors all have similar services offering all three attributes in very similar manners, only then does the service essentially become a commodity and at that point must compete on price.

None of these phases have anything to do with “branding.”

Can 'branding' be replaced?

For services, the most well-known “brand” doesn’t necessarily get the business. Why is it that the area in which I live supports over 20 financial planning firms of various sizes? I imagine the vast majority of them provide the same sort of services as every other financial planning practice. I don’t recall any of them having a stand-out differentiation, yet they all seem to be pretty busy. Getting onto the prospect’s short list has much more to do with reputation, appropriateness of offer and the basic tenets of marketing than any notion of “brand engagement” or “brand development.”

By providing outstanding service to their clients, these surrounding financial planners are enhancing their individual reputations and ensuring a continuing level of success for their businesses. A few of them may develop into much larger firms provided they: 1. actually want to get bigger; 2. have a business structure in place that allows them to grow; and 3. are diligent with their marketing.

The 5-step formula for building a professional practice or service firm into an international (“mega-brand!”) business is actually quite simple. Not necessarily easy, but certainly simple:

1. Start by providing a truly great service. Present it attractively and with a compelling message

2. Identify a local audience that: a. needs your service; b. can afford your service; and c. is big enough to support competition

3. Concentrate solely on servicing the bejesus out of them. Recommendations carry a hundred times the weight of advertising

4. Keep fulfilling and exceeding the expectations of your core customer group, and your reputation will grow

5. When this has allowed you to earn enough to advertise, do so to expand your market. The goodwill you have earned and the reputation you have built will bring expansion opportunities to your doorstep.

In my view, “branding” has become a misleading term that should actually mean everything traditionally termed as product marketing. Home- and service-based businesses should leave “branding” for those big enough to worry about being seen as a commodity. Concentrate instead on building your reputation.


Steve Osborne

Steve Osborne

director at Smarthinking

Marketing, advertising and design consultant with over 20 years experience in small business marketing strategy; brand advertising; packaging and identity design. Expert in developing creative campaigns to attract new prospects for professional and service-based businesses. Deep and broad experience with digital and traditional media channels; sales and general business acumen

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Wendy Huang

Wendy Huang , Full Time Blogger and YouTuber at A Custom Blog in 4 Minutes

Wow for those that have bothered to read through the whole article I have no doubt they have found it both insightful and thought provoking. It's a very interesting argument that you've painted and I do agree that substance trumps brand when it comes to service based and B2B business. Any fine example will be the hairdresser down the road that you trust that may boast a very tacky logo, and poorly designed flyers but the hair cut never disappoints you so you return again and again, vs going to Tony and Guy which has very developing branding and marketing strategies. Focussing on smoke and mirrors before sorting out whether the service you offer is actually quality is going to be detrimental for the business - thank you for bringing up these important points Steve :)