Today’s episode is all about discovering the impact of brand on your organization’s bottom line. While many companies want to focus their investment on Do-state marketing, it’s actually less expensive to invest in brand and build affinity earlier in the customer journey.
What Do We Mean By Brand? (3:45 – 5:34)
- Brand: the level of awareness and emotion toward an organization; also, how your audience perceives your organization
- A strong brand is comprised of three things:
- The target audience is aware of the brand
- The target audience has a strong emotional feeling toward that brand
- The target audience thinks and feels consistently about the brand
Benefits of Having a Strong Brand (5:35 – 13:15)
- Humans make decisions based on emotions
- A strong brand can short-circuit decision making and keep an organization from competing on price alone
- Brand investment means investing in a relationship with an audience not yet ready to buy
- Being along for the customer journey positions your brand as a known entity that is sought after at the point of sale
- This plays on the law of reciprocity in Robert Cialdini’s book “Influence”
- Close rates, cart abandonment, time-to-close are all metrics that reflect the influence of brand
Charity Break – Red Rover – (13:16 – 14:19)
Brand Investment is Less Expensive In The Long Run (14:20 – 17:39)
- Investing in brand is less expensive than investing in Do-state tactics
- The cost of reaching a Do-state audience is expensive because everyone else is bidding on that same audience
- Investing in an audience’s interest builds affinity earlier in the customer journey
- When we do not compete on point-of-intent, we can buy our audience at a lower rate
Investing in Brand Limits Downside Risk (17:40 – 21:31)
- Brand is like an insurance policy for when there is an over-reliance on a Do-state tactic
- Ex: A company’s margins covered their AdWords costs until Google changed its search algorithm and its deluge of traffic turned into a trickle.
- If you build up a strong brand, your audience will seek you out by name when they are ready to buy, even if an algorithm changes or SEO breaks
- Ask yourself: is your brand strong enough to withstand a new competitor coming to market, or an algorithm change?
How To Incorporate More Brand Into Marketing Efforts (21:33 – 25:35)
- Personas and segmentation – focus your brand investment on a targeted audience segment rather than trying to target everybody, or “boil the ocean.”
- Customer journey – understand your audience’s motivations to build awareness beyond your brand’s features and benefits
- Brand definition – develop a personality for your audience to fall in love with, or the emotion you want to create in your audience.
Summary (25:36 – 27:53)
We hope you want to join us on our journey. Find us on IterativeMarketing.net, the hub for the methodology and community. Email us at [email protected], follow us on twitter at @iter8ive or join The Iterative Marketing Community LinkedIn group.
The Iterative Marketing Podcast is a production of Brilliant Metrics, a consultancy helping brands and agencies rid the world of marketing waste.
Onward and upward!
Hello everyone, and welcome to the Iterative Marketing podcast. I am your host, Steve Robinson, and with me as always is the quirky and lovable, Elizabeth Earin. How are you doing, Elizabeth?
Elizabeth Earin: I am well, Steve. How are you?
Steve Robinson: I’m doing great doing great. Trying to decide if this weekend we’re going to go and trade in our iPhones.
Elizabeth Earin: For another iPhone or something different?
Steve Robinson: Yeah. So, we do the Apple Lease thing and we’re been eligible for months but the idea of transferring everything and we have to find new cases and the whole rigmarole of that has just kind of held me back from doing it. That plus there’s this thing in the back of my head that goes, okay, there’s the new Chrome Pixel and that looks like it’s like a pretty cool phone and am I just buying iPhones because that’s what I’ve had and is there other stuff out there I should be experiencing and checking out and maybe it’s better on the other side. So, much of my life’s in Google, etc., etc.
Elizabeth Earin: It’s a good question to ask. I wish that you could test phones out more than just play with them in the store.
Steve Robinson: Yeah.
Elizabeth Earin: I had that thought I don’t know maybe a year ago, a year and a half ago and decided to go get a Droid and it was miserable. I couldn’t figure out how to work it. You are so ingrained working with Apple products and I don’t know about you but I’ve got all sorts of Apple products. So, everything I use is Apple and to switch from an Apple product to a non-Apple product threw my world in complete chaos and I couldn’t handle it and ended up having to sell the phone at a bit of a loss to go back and get my iPhone and my husband loves to say I told you so, because he told me not to do it and I didn’t listen. So, he gets to hold it over my head now.
Steve Robinson: So, maybe it’s not just brand love for Apple.
Elizabeth Earin: No. I think the reason that there’s brand love for Apple is because they’ve got such a handle on their user experience.
Steve Robinson: Okay. And I guess we’ll probably go and trade in our iPhones long overdue. So, what are we talking about today if we aren’t talking about iPhones?
Elizabeth Earin: Today we want to focus on a different aspect and that’s the impact of brand on your bottom-line.
Steve Robinson: Yeah. This comes out of some conversations we’ve had lately with some prospects and even some clients that have really been pushing towards attributable last-click sort of metrics and yeah we can do this program but it needs the cash flow according to last click and we need to make sure that everything pays for itself at the point of that last sale kind of to the detriment of any effort going towards brand.
Elizabeth Earin: I think focusing on that last engagement is a little bit short-sighted and so today we want to talk about connecting the dots between investment in brand and measurable results.
Steve Robinson: So, first I think it’s important that we kind of talk about our definition of brand as it pertains to today’s discussion. Everybody seems to have a slightly different definition when they talk about what does a brand mean. I want to kind of hone that in for today, talk about some benefits of the brand, of emphasis on brand as well as how it can serve as an insurance policy and then we’ll wrap up with some actionable to dos.
Elizabeth Earin: So, jumping right in, what do we mean when we say brand?
Steve Robinson: Well, I think for today’s discussion we can simplify what it means to have a strong brand because that’s what we’re advocating is investing in a strong brand, we can simplify what it means to have a strong brand into three things. First of all strong brand means that your target audience those who can and will maybe eventually buy from you are aware of your brand. It means that the second thing is that it means that they have a strong emotional feeling associated with your brand and third and I think this is most important that that awareness and understanding of your brand, those emotions associated with your brand, they’re consistent among that target audience because a strong brand not only means a strong response but it also means a consistent response across those who matter.
Elizabeth Earin: So, we’re not just talking about an awareness of your brand being able to recall your name but we’re talking about the emotions connected with your brand.
Steve Robinson: Yeah and we’re definitely not talking about logos. We’re not talking about whether or not you have a style guide and whether you have a pretty logo and we’re talking about how your audience perceives your organization.
Elizabeth Earin: So, let’s jump in and start by talking about how a strong brand helps us accomplish more with less and then how it can help us when we kind of get into some of those sticky situations.
Steve Robinson: Yeah. As we go through those two topics we’ll talk about how this relates back to those measurement points because we’re not saying measurement isn’t important, measurement is very important but how brand investment comes back out through the numbers isn’t always as direct a correlation as you might think it would be but it does come back out, and I think that’s an important thing to talk about as we go through here. So, let’s start out what are some of the benefits of having that strong brand, if you were to break that down into a couple of points where should we start?
Elizabeth Earin: Well, I think it starts with emotions because so many of us without even realizing it our decisions end up being ruled by emotions and that’s because we make decisions based on the emotions that we’re feeling and we will take in information from the rational side of our brain but more often than not our emotions are going to win over on anything rational that we can argue.
Steve Robinson: Yeah. I always love coming back to that particular study where they had a gentleman who lost his emotional center of his brain, Amygdala, I think was the part of his brain that they had to remove surgically and he was as smart as he was before that surgery but felt no emotions and the strange byproduct was he couldn’t make a single decision. He was just deer in headlights anytime he had to choose between two things because we think we are logical creatures but the reality is that that logic feeds through that Amygdala that emotional center of our brains. So, if you can create a really strong emotional connection to your audience you have the ability to short-circuit their decision-making because they don’t bother going to get that logical information they assume it’s there and run with the emotional decision.
Elizabeth Earin: Well, not only that but if you are able to appeal to them and attract them on that emotional level then you’re not competing with them on a price level.
Steve Robinson: Exactly, exactly because the decision has already been made, now they’re just working possibly to rationalize that decision and they can do that through why your product is superior or even people go to great lengths to rationalize emotional decisions and so if you can get them with the emotion then the rationalization will follow and they’re not sitting here creating those pros/cons and price charts for your product or service either literally or in their brain. I think a great case in point coming back to that iPhone that we talked about earlier how often do you see Apple stuff go on sale?
Elizabeth Earin: Never.
Steve Robinson: Yeah. It just doesn’t happen. Occasionally like Best Buy will run a sale where they lose money on their Apple stuff but otherwise if you go to the Apple Store the price is the price because Apple doesn’t have to discount, they don’t have to compete on price, they compete on brand.
Elizabeth Earin: And you have to be careful because when you do start competing on price or even using pricing strategies discounts and whatnot to try to move product you have a big impact on your brand.
Steve Robinson: Yeah. It pulls you out of that premium space pretty quickly. So, if we look at tracking this how does this come out in the numbers? One of the questions that we ask is are you tracking your discounting? Are you tracking what that impact is in the bottom-line? Because that’s a cost of marketing if you don’t have to do that because you have that strong brand position coming into each deal that is measurable as an economic impact of investing in that brand.
Elizabeth Earin: So some of the things that we would look for would be what’s your average sale size or your margin on the sales and can you show a correlation between brand strength and those numbers over time.
Steve Robinson: Exactly. I think the other big reason that you get a benefit, a boost from investment in brand is you’re investing in that relationship in that audience before they’re ready to buy and that pays dividends over the lifetime of the customer journey.
Elizabeth Earin: Yeah. Not everyone you talk to is ready to buy right in that moment in time and if we make that assumption then I think we lose out on some really big opportunities but if we start early in the relationship and we’re there for the entire ride before they even start thinking about us up until they’re ready to make that decision they’ve built up that trust with us, they have that affinity. Our brand already has a place in their heart and so it makes it harder for them to abandon us at the last minute for a cheaper option.
Steve Robinson: Imagine for a second you have a friend maybe not a close friend but somebody you know who is a handyman, right? You’re connected to them on Facebook, they’re always throwing out these little home maintenance tips on Facebook that you’ve gleaned a couple of great things there and maybe you start a DIY project where you’re going to fix something in your house and you reach out to him for some advice and he helps you out with that without trying to sell any of his services or anything and then all of a sudden you have to do something that’s beyond your ability as a handyman like place a door, who you’re going to reach out to? You’re going to reach out to your friend of a friend that you’ve established this trust in this relationship probably you know somebody who you know would be cheaper you’d still probably reach out to that same guy.
Elizabeth Earin: Definitely. I know I’ve done this in my life and this plays off of something that we read about in one of our club books and I cannot remember what it’s called, it’s one of the laws.
Steve Robinson: The Law of Reciprocity.
Elizabeth Earin: Yes, that one.
Steve Robinson: Yeah, that’s from Robert Cialdini. I can say this guy’s last name really, I can, yeah and that’s one of his laws in his book called Influence from years ago, it also plays on another sort of tactic and that is the fact that if you’ve been along that journey you are a known entity and humans are really propelled by inertia, we would rather go with the known than the unknown, we would rather continue in a manner of congruence, I think is the technical term where, okay, so, this handyman that I know is my go-to source for handyman stuff, right? And that’s where I go, that’s where I go, push the button on that and get the food palate, right? If I start to diverge from that that’s friction and so if you establish that relationship you become that known, that go-to resource for that thing and your audience will not diverge from that unless they are given a good reason. It’s kind of like an object in motion remains in motion unless acted upon by an outside force, going back to your high school physics class, right?
Elizabeth Earin: Exactly. You compare this to your handyman scenario when you’ve got someone who you have now built this relationship with this person, he’s helped you out a few times versus the guy who popped up in your AdWords when you searched for whatever keyword, you don’t know who that other company is, you don’t know who that person is. I mean you see their name but like you said unless there’s something really compelling in that line or two of copy in that AdWords text you have no reason to seek them out and instead you are going to go with someone that you are already familiar with.
Steve Robinson: Right. You might do that Google search just to help you rationalize the decision that you’re making, you might come up with those alternatives because you feel like if I don’t then I’m not doing my job but the reality is you’ve already decided where you’re going, you’re just coming up with the alternatives to help you build that rational case.
Elizabeth Earin: We see that impact on our bottom-line when we look at things like time to close, close rates, cart abandonment, these are all areas that are impacted and we see the influence of brand on these numbers.
Steve Robinson: So, I think it’s a great time for us to take a quick break. When we get back we’re going to make one more final case for how brand really can impact your results and your numbers in a positive way before jumping into the what we call the insurance aspects of a brand. So, let’s go help some people.
Elizabeth Earin: This week we are asking that you make a donation to Red Rover. Their mission is to bring animals out of crisis and strengthen the bond between people and animals through emergency sheltering, disaster relief services, financial assistance and education. To find out how you can help please visit redrover.org or visit the link in the show notes. If you would like to submit your cause for consideration for our next podcast please visit iterativemarketing.net/podcast and click the share a cause button. We love sharing causes that are important to you.
Steve Robinson: And we are back. So, before the break we talked about how investing in brand can keep you from competing on price by short-circuiting that emotional decision-making portion of your prospects’ brain and we also talked about how being along for the journey allows you to play off of laws of reciprocity and some congruence, positioning you as the known entity that’s sort of owed a favor at the time of sale. Let’s talk a little bit more about how investing in brand can actually end up being less expensive than investing in those last minute “Do” state tactics that we see all too often is the focus of marketing plans.
Elizabeth Earin: Definitely. And I think this is a really great point because so often like you said when we first started this episode people are focused on those “Do” state those people that are ready to buy now and that’s great, I mean you want to bring them in, they’re wonderful but the cost of reaching that audience is so expensive and when you’re not competing on that point of intent anymore, you can buy that audience at a much lower rate and so if you take a look at AdWords bids for keywords like buy sewing machine needles online which has a very high intent, you are talking about buying them online with those something that would be more like how to thread a sewing needle or sewing machine, you’ve got an audience who obviously has a need for that product, they may not have demonstrated that intent to buy yet and so that audience is much – you can get it at a much smaller rate and again if you stick with them through the whole purchase then they convert and you brought them into your funnel at a much less expensive than you would have if you had been going after that high intent keyword.
Steve Robinson: You see the same thing with programmatic or Facebook advertising where if you’re bidding on audiences that are high intent audiences either on the programmatic side they’re labeled intent audiences or on Facebook if you can find there are some places where you can bid on intent as well, you’re going to pay a lot more for that traffic than if you’re just bidding on interest because everybody else is bidding on intent. Everybody else is trying to go there and so, there’s a scarcity to that traffic, there’s a scarcity to those eyeballs and that drives up that price. The irony is that if you can properly leverage the eyeballs earlier in the journey, there’s actually greater value there as we talked about earlier through that reciprocity and congruence.
Elizabeth Earin: Yeah. I mean if they already know who they are and they’re seeking you out they’re already informed about you, they’ve heard about you from somewhere else, they have an idea about you and so, typically you’re not going to need as much content to try and influence them because they’ve sought you out and so, in that way they’re more informed decision makers and that can lead to a shorter sales cycle, it can lead to higher close rates and it also leads to better customer retention if you’re able to follow through on what you have promised.
Steve Robinson: Yeah and those are hard metrics to get your head around as a marketer because now we’re looking at things that are really in the domain of sales or even customer service when we’re looking at account retention but ultimately those play out based on what we’re feeding into the machine here, right? So, if we’re feeding in prospects and leads that are not right fit or who aren’t informed as to what makes your company special that’s going to result in crummy numbers on the other side. So, you have as much responsibility to be tracking and looking at those numbers as any other part of the business and you can actually lay claim to having influenced them especially if you can back it up with some surveys or some other data that can demonstrate how you have produced better fit or more informed prospects at the beginning of the process.
Elizabeth Earin: Now you had mentioned that there’s another reason to invest in brand and that had to do with limiting you to downside risk.
Steve Robinson: Yeah. I see brand as a somewhat of an insurance policy and it kills me, it just pains me whenever somebody comes to me and says, Steve, I need your help, my marketing is broken, it was working great and then all of a sudden blah blah blah happened and now we don’t have any leads and you look at this and it’s usually an over-reliance in some “Do” state tactic.
Elizabeth Earin: Yeah. We’ve seen this time and time again and like you said it’s heartbreaking to look at because it’s something that they thought they were doing everything right, they were going off of their metrics but a change in an algorithm can throw their entire world for a loop and we had worked with a construction services company that had been first in market and they were gangbusters. I mean they were getting it and they were going after it, they were doing a great job and –
Steve Robinson: That was all search, right?
Elizabeth Earin: Yeah.
Steve Robinson: They had really nailed SEO because they were the first ones in their market to have an online presence and so being first gave them this huge advantage for many years.
Elizabeth Earin: Until someone new came to market and then that advantage went away and was not fun times around the office.
Steve Robinson: Yeah, yeah, and then another company that we worked with they were sort of a stuck in an AdWords loop, they had really built a business that was really dependent on AdWords traffic and Google when it changed the way that their search terms operated within AdWords and all of a sudden they were unable to produce that same traffic and their sales just dried up and shriveled overnight.
Elizabeth Earin: And this I mean, I’d love to say that these are limited cases but they’re not. I mean look at Facebook, how many companies used to use Facebook to put coupons and discounts out to people and then Facebook changed the algorithm and now that stuff’s not being delivered anymore and they’ve lost this entire channel that they had for getting their message out to their target audience.
Steve Robinson: And we’re not saying you shouldn’t invest in some of these “Do” state tactics, you want to be present at the end of the sales cycle or at the end of the customer journey when that person is ready to buy because if you’re not there you might lose out on opportunities that you otherwise would get. However, we see investing in brand as a great insurance policy against some of these other tactics because if you invest in your brand, you get to a point where your audience is seeking you out by name and even if your SEO breaks they’re still going to be able to find you by name, they might not find you searching for blah blah blah construction contractor but they will find you when they search for your name and so, it’s far less susceptible to outside influences to algorithm changes or SEO ranking or AdWords policies or whatever else might screw up that path that you had very carefully built from somebody’s intent to buy your product or service to your brand, if you skip that step and they jump right to your brand because they know it, love it, trust it, that’s where they’ve been going and that’s where they feel like they owe some debt to, you don’t have to worry about that middle piece breaking as much.
Elizabeth Earin: Yeah, managing this portion of brand really helps to prevent that catastrophic downturn due to an over-reliance on “Do” state advertising and ask yourself as you’re listening to us to talk about this what would happen if an algorithm were to change? What would happen if a new competitor entered the market? Are you currently positioned to be able to handle that?
Steve Robinson: I don’t want anyone else coming to me again saying, Steve, help me fix this, it’s broken. So, what can we do as marketers if we’re in a position where we are over-reliant on these “Do” state tactics and we really haven’t been feeding and watering our brand?
Elizabeth Earin: Yeah. So, there’s three sort of things that you can do that you can take a look at today. The first one is looking at personas and segmentation. If you don’t understand the who of who you’re trying to reach then you are – I think you say this all the time, you’re trying to boil the ocean and I take that to mean that you’re just trying to do all of it at once and you can’t, it’s just no one’s still big enough to do that. So, no one’s budget is big enough to do that.
Steve Robinson: You’re not going to make friends with the world and nobody has that budget, right? So, if you’re going to spend money on brand you really need to make sure that it’s focused money, you really need to nail the who that you’re trying to make friends with, whose hearts and minds are you trying to influence, who are you trying to get to fall in love with you, because you can’t boil the ocean.
Elizabeth Earin: It goes beyond just understanding the who you need to understand their journey as well. You need to be able to understand what it is that’s motivating them, what decisions are they making, what are they thinking about during the process and by doing that you’re able to then insert yourself with the right type of content, the right type of messaging in a way that gets their attention and builds up that awareness with them, if you don’t understand that, if you’re just focusing on features and benefits and just throwing information out at them without understanding what it is they really need and really want at that specific point then you lose an opportunity and they’re going to tune you out to one of the other hundreds of messages that are in market.
Steve Robinson: Yeah, this is key. I’ve worked with enough people over time that have been focused on features and benefits, product or service, this is what we sell, how do we find people who want what it is we’re selling and if you’re in that loop and in that loop, yeah, your tactics naturally drift towards “Do.” To get out of that you have to stop looking at how do we – where are people looking for what it is that we’re selling to, where are our right fit clients and what does their journey look like, and that’s a paradigm shift that seems subtle but it’s huge, absolutely huge in how you look at your marketing overall. And the last part that we didn’t talk about in our three keys on how to get started with this if you are stuck in that “Do” state is of the one that’s most obvious and that is have you taken the time to define your brand? Do you know that personality? Do you know that emotion that you want to create in your audience that’s going to make them establish that awareness and love and positive emotional attachment to your brand?
Elizabeth Earin: And this is important because the key to making this happen, the key to building that awareness and building that attachment that you just mentioned is that you have to be consistent and if you don’t know what you’re doing and you’re kind of jumping from state to state with a different type of message and you’re not reinforcing that throughout the entire customer journey you lose that opportunity.
Steve Robinson: Yeah, they might know who you are but if they don’t feel something it’s not worth the effort. So, we talked about personas, customer journeys and your brand, the key action here is after you have at least something in place for all three of those go through and audit all of your marketing and make sure that your marketing is addressing the right persona correctly and that you understand the who and that you’re focused and that you’re not trying to boil the ocean. Make sure that you are addressing people at various states in their journey before “do” and then make sure that every touch point aligns with that brand that you have defined. If you do those three things then you get out of the “Do” trap, you get out of this reliance on these “Do” state tactics and you build your insurance policy and you set yourself up for far greater returns in the future.
Elizabeth Earin: Definitely.
Steve Robinson: So, let’s wrap up today’s podcast. We talked about what makes a strong brand and we distilled that down to awareness, emotion, and consistency.
Elizabeth Earin: The benefits of having a strong brand are tied to short-circuiting that logical decision making, again that’s not how we make decisions, we are ruled by emotions and so, you want to find that opportunity to connect with them emotionally so that you are not having to compete on price or features or benefits.
Steve Robinson: We want to be along for the ride for that customer journey, so we can vastly improve the probability of a better outcome towards the end.
Elizabeth Earin: We want to get higher quality sales by spending less on media because we’re not competing for those most expensive eyeballs that we talked about in the “Do” state. We’re not competing for those high intent keywords instead our audience is seeking us out.
Steve Robinson: We also talked about brand as insurance, avoiding those catastrophic disruptions in your channels that can make horrible impacts on sales and instead getting your audience to seek you out.
Elizabeth Earin: Finally, we left you with some next steps to get ahead of that “Do” state tactics and really work to start building a strong brand.
Steve Robinson: I want to thank everyone for making time for us again this week, we really appreciate it, and until next week onward and upward.
Elizabeth Earin: If you haven’t already be sure to subscribe to the podcast on YouTube or your favorite podcast directory. If you want notes and links to resources discussed on the show sign up to get them emailed to you each week at iterativemarketing.net. There, you will also find the Iterative Marketing blog in our community LinkedIn group where you can share ideas and ask questions of your fellow Iterative Marketers. You can also follow us on Twitter, our username is @iter8ive or email us at [email protected]marketing.net. The Iterative Marketing podcast is a production of Brilliant Metrics, a consultancy helping brands and agencies rid the world of marketing waste. Our producer is Heather Ohlman with transcription assistance from Emily Bechtel. Our music is by Seastock Audio music production and sound design. You can check them out at Seastockaudio.com. We will see you next week, until then onward and upward.