Is Your Price Right? Does It Strengthen Your Profitability or Undermine It?

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For some companies, the pricing policy for goods and services is based purely on a combination of covering costs and making a reasonable profit. Smart management however, understands that pricing is one of the most obvious indicators of a brand’s competitive strategy.

 Brand Pricing

  

Pricing policies determine where your offering is positioned in the market. It is a reflection of your brand’s core values and helps shape customer quality expectations of your product or service. With this in mind, ask yourself, what is your pricing policy telling your market about your brand?

 

 

Top 3 Most Common Pricing Mistakes to Avoid

 

1. Lowest Price Does Not Always Mean Best Value

Most customers care about value for money rather than lowest price.  In tough economic times people still have to spend money and so their tendency to focus on the value of their ROI is even more pronounced. Customers are far more than one-dimensional money savers. They want brands that will serve their needs and offer value for money.

 

 Brand Price Matching

 

2. Cost Cutting

The current economic situation has come companies cost cutting and lowering prices in an effort to survive until things improve. Brands need to accept the current economy as the new normal. Look at it not as a bad economy but as the economy. Companies should implement a pricing structure that best reflects the core value of the brand, rather than clutching at the lower end of the market. 

 

 Slashing Prices

 

Companies need revenue more than ever. Cost cutting can position your brand as the low cost provider and that is a risky place to be in.  Brands that focus on being the low cost provider are left with little to offer the market if suddenly undercut by competitors.

  

3. Inconsistent Pricing Strategies

Frequently changing pricing strategies makes it difficult for customers to calculate the value received with each purchase. It can lead to consumer confusion and can trigger a lack of confidence or mistrust in what appears to be disorganized management. Identifying your most appropriate pricing strategy and keep it consistent.

 

 

Top 5 Strategies That Can Strengthen Your Brand Positioning

 

1. Emphasize Benefits

Lowest price doesn’t always win. Customers develop feelings through their brand experience that impacts on their judgment of value. Customers care about value. By remaining consistent in your pricing strategy and focusing on communicating the value proposition of your brand you will provide your customer with the confidence they need when making a purchase and help them feel more positive about the way they spend their money.

 

 Brand Value

 

2. Focus on Core Values

Core values are the foundations on which brand identity is shaped. Re-examining your brand’s core values can help refocus your pricing strategy and provide the guidelines to strengthen your relationship with your customers. If your brand’s core value was to provide greater quality at a fair price then moving to a low price strategy will damage the very nature of your brand. Customers tend to be more willing to spend a little more money for better value. 

 

3. Bundle Costs

Customers feel a loss when they spend money. Separately listing all the elements they are paying for highlights the extent of the loss in the transaction. Bundling the items into one price is easier to change the customer’s perspective, encourages purchasing and can provide a sense of increased value for money.

 

4. Stagger Price Increases

Webers Law is a strategy adopted by Starbucks in their pricing strategy. It states that customers do not register price increases until they become highly significant. By raising their prices by only a few cents at a time Starbucks did not deter their customers and managed to rise prices without consumer backlash.

  

5. Make Your Offering Incomparable

You don’t want to be forced to lower prices, but how do you deal with low price anchors set by your competition? The easiest way to make your offering incomparable to your competitors is by changing the way you present your offer. 

 

For example, if you are in the B2B software industry, rather than a generic  offering; “software solutions for business”, try “software solutions for business that maximize productivity”. That one small change can make sure that your solution is incomparable and will make it harder for customers to reference the low price anchor.

 

Do not compromise your brand integrity by slashing prices. Focus on your brand’s value proposition and articulate it clearly to your employees and customers alike. Make sure the pricing strategy you employ supports a sustainable and profitable future for your brand.

 

• Do you need to reposition your brand to increase your profitability?

 

• Are you undermining your brand with unsustainable discounting?

 

• Could re-evaluating your core brand values help you increase your profitability? 

  

  

7 Steps to Branding Your Way Out of Recession and Into Profitable Growth

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There are few companies in existence that have not felt the affects of the current recession impacting on their business and profit margins. As many of us know, uneasiness in the market fostered by fears of job losses and reduction in wages has consumer spending at an all time low.

 

Many business leaders feeling the pressure on their profit margins often react by applying cuts to their budgets, with marketing spend often first on the chopping block.

 

Brands Busting Recession

 

However, as history has shown us, savvy business leaders can recognize that cuts to budget spend alone are not the answer and that changes in the market demand adaptation to current marketing practices.

 

Recessions create huge challenges to businesses but why try and weather the storm when the opportunity exists to capitalize on your brand equity to strengthen your market position, and even develop profitable growth.

    

Opportunity Everywhere Crop

  

 

7 Steps to Brand your Way out of Recession

 

1. Adapt Your Brand to Customer Needs and Wants

How have consumers lives been changed by the recession? How have their needs changed? Your brand needs to be managed in a way that adjusts its marketing strategy to meet these changing consumer patterns. Revamp your brand packaging to be more relevant or user friendly, develop and up-sell new service products; analyze the new needs of the market and adjust your brand accordingly.

 

 

2. Brand Your Way to Market Growth

“You can’t save your way out of a recession – you have to invest your way out. You can’t just invest in the good times and then forget about them in the bad times and hope to get any results” Craig Barrett. Chairperson Intel  

 

A reduction in branding investment will have a knock on effect on the entire business. Reduced visibility or weakened brand equity leads to a reduction in demand leading to negative effects on profitability.

 

History has shown us that brands that increased or even maintained their investment in the brand during a recession actually saw an increase in marketing share. If your competitors are making cuts to their marketing budget than by maintaining your spend you are gaining an instant competitive edge.  

  

 

3. Review and Remove

Review and analyze your current brand activity. Cuts to marketing budgets without focused brand strategy have detrimental effects on the overall profitably of a company.

 

However, removing any lower value marketing costs can actually improve efficiency and effectiveness of your brand strategy. Being more selective in where and how you market your brand can actually bolster profitability. Track the ROI of brand investment and re-allocated funds to marketing activities to monitor what results in increased revenue for your business.

 

Brand Power 

  

4. Maintain Consumer Brand Relationships

During a recession remember your current customers. Experts agree there is no better time to focus on clients who are brand advocates. It is far cheaper to keep current customers than to attract new ones. Your current customers understand your brand. They have an affinity with it.

 

 

5. Increase Consumer Confidence

Reduction in sales corresponds to increases in consumer wariness. With cuts to wages and uncertainty in their future, consumers have become increasingly cautious in their spending habits.

  

Now is the time to use the strength of your brand to reassure customers. Convince your customers that they are making the right decision by purchasing your brand. Investing in building strong brand equity can lead to increased sales with customers developing a clear understanding as to the value of your brand. This information gives them the confidence they need to make the decision to purchase.

 

  

6. Remember Your Brand Values

Focusing on brand values can refocus the business itself and reignite the passion that drove the business in its early years. In a time where the negatives of the recession weigh heavy on consumer’s minds, being faced with a brand that is driven by passion, determination, inspiration, with clear values and purpose will stand out in the market and can inspire sales.

  

 

7. Customer Added Value

Consumer needs change in a recession. Purchasing decisions are often based less on convenience and more on price and value. Adding perceived value to a customer is far easier and has less of a direct affect on profitability than changing pricing structures.

Wow your clients at the various brand touch points and they feel they are getting more for their money than competing brands. Contribute good will, service during hard times and develop customer loyalty that will be stronger than ever when recession ends.

  

Brand Growth 

   

Abraham Lincoln once said “Give me six hours to cut down a three and I will spend the first four sharpening the axe”. Business leaders need to start sharpening their marketing practices, not cut them.

 

 

• Have you analyzed the changes to your market?

 

• How have you adapted your brand strategy to changing consumer needs?

 

• Can you streamline your branding to get a better return on investment?

 

What have you been doing to brand your way out of the recession? Leave a comment or drop us a line. We’d love to hear your success stories.

  

Are You Leading Your Brand Effectively to Maximize Commercial Success?

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Branding is not just about big business. Regardless of whether you have a specific brand strategy in place or not, if you are operating in business then you have a brand – good or bad, weak or strong.

 

In small and medium businesses the single greatest influence on the business brand is the company leader. Think about it. Even if the company has marketing personnel, the final decisions and creative control lie with the executive director. This is something many leaders of small and medium enterprises fail to recognize.

 

Remember, your business brand goes far beyond the just the name and logo. Your website design, your marketing message, your staff, your pricing policy, the look of your business interior, your brand collateral, your customer service together with the whole culture of your business all shape your customer’s perception of your business and your brand. And who has overall control of these elements? The leader. So whether intentional or not, for better or worse, as leader you are currently shaping the development of your business brand.

 

Building a strong brand starts from the inside. Whatever happens inside the business reflects what the customers perceive from the outside.  I am sure we all know of a local business we love to visit because the staff are friendly and helpful. In more cases than not, this is because the owner is the friendliest and most helpful of them all. The owner is the influencer who affects everything around them within the business and beyond.

 

In fact, many of the world’s biggest brands are shaped by the vision of their leaders.  Anyone who has read Steve Jobs biography knows that he was the visionary of the Apple brand. He influenced everything about the brand. Apple is design obsessed because Steve Jobs was design obsessed.

Steve Jobs Apple

 

If we think about the brand personality of Ryanair, we think abrasive, sometimes downright rude, unfriendly, brash but invariably the best deal and on time. Now think about Michael O’Leary, Ryanairs CEO, any of those traits come to mind?! It’s no accident that these characteristics are cultivated as part of his public persona to congruently fit with the brand, like it or hate it!

 

Michael O Leary Ryanair

You can make similar leadership and brand visionary comparisons with Richard Branson and the Virgin brand, amongst others, a very different brand and leadership style but he is undoubtably a very shrewd leader of the Virgin brand. And these are global companies. In small and medium companies where the business leader has total control on decisions, they intentionally or otherwise shape the brand more than anyone else.

 

We know that some business leaders are better than others in terms of skills and knowledge and this has an obvious effect on the financial success of one business over its competitors.  But business acumen aside, when a business leader is closely associated with the embodiment of a brand their sheer existence in the company has an effect on people’s confidence in the company performance and ultimately the profitability of the business.

 

Steve Jobs is one of the greatest examples of how strong the influence of a leader is on a brand. When Steve Jobs resigned from Apple the company’s shares dropped as much as 7%. This company is a global titan, with some of the world’s greatest minds and strongest business strategists at its helm, and yet, without Jobs’ involvement customers were wary because Apple had become synonymous with Jobs and his utter embodiment of what made Apple ‘Apple’. Customers found it to difficult to separate the brand from the leader, ultimately affecting the company’s bottom line.

 

If your business is not performing or where you want it to be, you need to look at what you are doing to influence those in your company, your brand and how its perceived internally and externally and the service you provide.

 

If you don’t have a clear vision of what your business brand identity is, what your brand stands for and how it engages with your target audience in a way that matters to them, then how can your business have a clear strategy ?

 

The huge positive for leaders of small and medium businesses is that building a strong brand is not difficult, done correctly and with the right team expertise on board to support you, because it starts with you. 

 

If you are serious about building a strong brand for your company and maximizing your profit potential then the first step is to undertake brand profiling for your business. Understanding your brand’s current position and identity in the market will help you on your way to understand the role you can play in shaping it to greater profitability for the future.

 

Your business’ brand strategy lies in your hands and with it the growing profitability and success of your business.

As the leader of your business do you know what aspects of your brand are working effectively, or falling short and in need attention or just tired, out of touch and in need of repositioning and revitalisation to increase your commercial returns ? 



15 Reasons Why You Need a Brand Audit to Increase Your Revenue

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Fact: Strong brands make more money, are more profitable and increase company value. They enable you to command a premium, ensure customer preference in buying decisions and build customer loyalty which reduces cost of sales and fends off competition. 

 

If your profits are falling and sales are not performing a “Brand Audit” will help give you insights into your brand’s impact and performance in the marketplace and, most importantly, why it’s not delivering.  

 

Fact: All brands, global or national or regional, need a health check. Brands are like living entities with life cycles. They start with much excitement and promise, grow and then eventually plateau. 

 

It’s at this mature stage of evolvement, when they potentially start to loose relevance as the market evolves and customers move on to the latest hot new thing, that you need to conduct a Brand Audit. 

 

A Brand Audit helps you monitor this cycle so you keep your brand fresh and relevant and know when to reinvigorate or revitalise before sales start to slip.

 

Brand Audit Team

 

Need some more reasons to use a Brand Audit to increase your bottom line ? Here’s 15 more to chew on . . .

 

1. Use it to grow your bottom line, your money’s in your brand. 

    N.B.: Products can be copied, brands can’t.

2. Get clarity with your marketing activities and step up a gear.

3. Know what your core customers think of your brand NOW and re-evaluate.

4. Create sharp focus in your bullseye customers mind.

5. Revitalise with multi-channel emotional connections with your customers.

6. Re-energise what your brand stands for and make it hit home.

7. Leverage it to be seen as an innovative trail blazer and increase your visability.

8. Get distinct and memorable competitive advantage.

9. Attract and develop more effective raving brand advocates.

10. Enhance your brand credibility and generate more buzz.

11. Differentiate your brand more strongly to become a money making magnet.

12. Enhance your internal sense of proud brand ownership with both the board and employees. It massively impacts on how everybody engages and interacts with the brand and your customers.

13. Leverage growth by using external professional validation. 

14. Discover new ideas, insights, tactics and strategies for your brand.

15. Get an outside experts point of view. You are too close to your brand and invariably can’t see your own brand shortcomings to address the problems objectively.

 

Brand Audit Girl

 

These are just some reasons to engage in a Brand Audit. Do you really know how your brand is performing and where it could be improved ?

 

Is it coasting along but in need of re-evaluation before the competition catches up ? Or is it disconnected, out of touch, caught up in price discounting and endless promotions with a shrinking market and failing sales that will ultimately put you out of business ?


Now is the time for an audit to reinvigorate your brand to stay on top or, more critically, provide a life saver to identify and address the problem areas so you can turn things around and grow your bottom line. 

 

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To find out more about what’s involved in our proprietary brand audit process, and how you can use our Persona Brand Audit to greatly increase your performance, drop us a line or give us call today. 

We’re here to help you address your brand challenges and support you in growing your business/brand.

T: +353 1 8322724

E: [email protected]

 

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