Brand product or service to build customer loyalty
By KENNETH PARROTT
Published August 28, 2006
For 20 of the past 22 years, my uncle bought a new Cadillac every two years like clockwork. That is brand loyalty. For a small business, customers with a preference for your particular brand of product or service, it is the ultimate goal. But to the small-business owner, the term "brand" doesn't easily fit their self-image. It conjures images of the familiar brand names of large, well-known companies. Yet the small-business owner has the most to gain through branding. It is a creative way to set your company apart from the competition and to develop brand loyalty.
A brand is a trademark or distinctive name identifying a product or manufacturer. It serves to create associations and expectations among products. For the small-business owner, branding is done in a smaller market with less reach than those large well-know companies. However, with the use of online low-cost, search engine ads and interactive features on your Web site, there are tremendous opportunities for creating and promoting your brand and image.
The best brands tend to tap emotions and appeal to a person's natural need for involvement. Determine the element that sets your business apart from the competition. Use originality and creativity to create your brand identity. Everybody uses quality and service to set them apart from the others, so look for something that's truly different. A brand needs to last a long time, so avoid elements or catch phrases that are trendy. They become dated and disappear over time.
Brand loyalty occurs when customers perceive the product or service as having the right features, quality, price and image. The key for you as a small-business owner is to create brand loyalty. Consumer behavior is habitual. Habits are safe and familiar. Once a customer makes an initial trial purchase and is satisfied, the next purchase is now both familiar and safe. Additional purchases lead to a buying habit and brand loyalty. That is where your marketing, both before and after the sale, is critical to encourage repeat purchases. Ever notice how many ads you did not notice before you made a purchase but catch your attention after you just bought that product? The ads are reinforcing your purchase decision and product attitude. Eventually these attitudes mature into beliefs resulting in brand loyalty. Some marketing experts say that branding and marketing go hand-in-hand. If you build a powerful brand, it will drive a powerful marketing program.
Why is brand loyalty so important? For the business owner, it is easier to keep existing customers than to search out new customers. Advertising and marketing to new customers is four to six times more expensive than the cost of marketing to your existing customers. A brand-loyal customer is less sensitive to and less likely to stray to a competitor's promotions. Brand loyalty reduces customer loss, which improves business growth. You are not replacing lost customers to stay at the same sales volume.
Customers must have a favorable attitude toward the product to develop loyalty. Work on influencing the customer's attitude. Be sure the customer gets what they want from the product. Create incentives for customers to repeat purchase though frequent buyer programs, gifts, give-aways or other creative means. Stand behind your product. If you don't, they won't. Know who your good customers are. The rule of thumb in business is that 80 percent of your business will come from 20 percent of your customers. Treat those customers well. Remember that once a customer always a customer is not a foregone conclusion. My uncle shocked everyone during his last biennial car purchase. He bought a Honda.
To learn more about branding and other marketing matters, call Score at 621-0775. The knowledgeable counselors at Score are available to offer free advice. They will help you develop a brand and marketing that is effective and helpful to your business objectives.
Score is a nonprofit volunteer organization and is always looking for qualified members. I invite those interested to call and attend one of our meetings. And I'm Kenneth Parrott wishing you a great month in business.
Editor's note: This column is one of a series of monthly columns by Kenneth Parrott that provide information supplied by Citrus County SCORE Chapter 646. SCORE, Counselors to America's Small Business, offers free, confidential counseling services to new and existing businesses in the county. For assistance or workshop information, call 621-0775 or visit its Web site, www.scorecitrus.org.
