The importance of brand standards.
Every company has manufacturing standards. Brand standards are just as important.
A furniture manufacturer I know insists on using a certain type of screw and a certain type of wood when producing his furniture. I remember asking him once if cheaper screws and different wood would increase his margins. His response — “Sure, but it would catch up with me.”
“People trust our brand because of our reputation for quality,” he said. “As soon as I start compromising the quality, my customers will start looking for a furniture maker who doesn’t.”
Your C-suite (particularly your CFO) needs to understand that manufacturing standards for product-building efforts are no different than the standards you need for your brand-building efforts. There’s a reason your sales literature isn’t just a black and white photocopy, your website isn’t designed by your 12-year-old nephew, and your sales people don’t dress like the Beverly Hillbillies. Every brand (like every product) has a threshold of quality that needs to be maintained, or you run the risk of diminishing the brand value you’ve already established.
According to a benchmark study (PIMS) by the Strategic Planning Institute, a well-positioned, well-marketed, premium brand commands (on average) a 9% higher price than one that isn’t. Money spent maintaining—or better yet, building upon your brand (when done correctly) only solidifies your margins and profits, helping to marginalize your competition.
Finally, consistently communicating your brand attributes to your target audience is paramount in reducing the cost of making a sale. Consider the landmark Morrill Study and what it revealed. Although conducted in 1971, its findings are timeless as it relates to the human brain and the effects of advertising on consumer perceptions. The study concludes that “advertising with adequate frequency can reduce selling costs by 10% to 30% … a substantial boost to ROI.” On the other hand, it shows that “failure to advertise in a well-advertised market can increase the non-advertiser’s selling costs 20% to 40%.”
The difference between advertising or not advertising can be directly proportional to the difference between profitability and unprofitability for many companies.
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