At the recent Heavy Duty Aftermarket Week I had the pleasure of participating in a panel discussion on the importance of brand. Afterward, feedback from several fellow distributors indicated that the panel did not adequately discuss the subject from multiple viewpoints.
To be honest, I agree with them. Brand is a complicated subject that cannot be reduced to an hour-long discussion or a one-page article, but I would like to cover what I consider a few key points.
Each of our companies has a unique brand and it is what sets us apart from our competitors. Your ability to overcome a lower price offered by competitors is determined by the value the customer assigns to your brand. If there is no differentiation in company brand value, then price is the sole factor in who gets the order.
If you have a strong brand with many positive differentiators that translate to value for the customer, then you can command a higher price and a higher margin.
The goal of every distributor should be to establish a strong brand for his company that will give it an edge in the market and support business objectives. The brand you develop should be consistent with your assets, aligned with your business strategies and committed to meeting the needs of your customers.
Here are some of the criteria that customers use to evaluate your company and to evaluate your brand:
- Service Level
- Product Availability
- Quality
- Price
- Technical Expertise in Sales and Customer Service
- Communication (including multilingual)
- Shopping Environment and Store Personnel Attitude
- Ease of Doing Business
- Hours of Operation
- Credit Policies
- Fill Rates and Backorder Follow-up
- Brands Sold
- Salesperson Relationships
But having a good brand is only part of the job of creating true differentiation. Your brand must have value, and that value must translate into savings for the customer. This often is called the value proposition. To “sell” your brand, you have to convince the customer that what you offer will be more valuable than what the competition offers. Obviously, if you do not promote the value of your brand, you leave it solely to the perception of the customer, which can cost you business by allowing the lowest selling price to win the customer’s business.
To stave off that result, distributors need to convince customers that the features, products, services and all the other things you do have a value to the customer that offsets any competitor’s price advantage. I call this selling your brand.
For some reason, distributors are reluctant to do the work necessary to sell their brand. Buying cheaper products and cutting prices may seem the easier approach. Surprisingly, many vendors also fail to aggressively promote the value proposition of their products. Too many lawyers and accountants get in the way of this most important function. Instead, some of these suppliers just find ways to cheapen their products. This results in a weakening of the brand and too many customers being lost to price cutting.
To successfully differentiate your company so that you can win your customer’s business without cutting prices, you must take the following steps:
- Establish what your brand needs to be to match the needs of your target market.
- Implement changes to define your brand.
- Calculate the value of the brand you offer.
- Sell the customer on your brand.
The strongest and most successful companies in our industry, or any industry, all share a common trait – they have strong brand recognition and that brand has a defined value. What is your brand and do your customers perceive its value?
