Running a profitable paving and pavement maintenance business is as tough as ever. Competitive pressures, labor challenges, deflationary pricing pressures, and the ever-increasing cost of business operations puts a significant squeeze on the bottom line. There are two paths to higher profitability: Either become the low-cost seller or become a highly differentiated niche player. Avoid the temptation to cut your prices. Instead, learn how to brand your business as a niche player and thereby increase your margins.
Q: What the heck is "branding"?
A: Most people think of the Nike swoosh as a brand, but it's not. It's a logo and one element of your company's communication strategy. A brand is more profound. It's the sum of all the impressions and experiences of your customers – the good, the bad, and the ugly.
All companies have a brand. Whether purposefully created or happenstance, you have a brand, too. For example: How do your employees treat your customers? Are they following your specific philosophies and training, or are they doing as they please? Are your employees friendly? Do they look professional? These are all attributes of your particular brand. Secret No. 1: Your brand exists within the memories of your customers. Secret No. 2: Your employees are accountable for creating most of these memories.
Q: What makes an "effective" brand?
A: An effective brand requires three criteria: It must be unique, it must be desirable, and it must be consistently communicated through all the customer touch points.
Why unique? If your clients can compare apples-to-apples, it opens the door for price shoppers. Consumers are overloaded with information; giving then something unique helps them remember you and makes it easier to choose you. Digital music players are a case in point. All the choices seem the same except for Apple's iPod, which stands out as unique and thus has the highest market share.
Why desirable? Goes without saying, right? Actually this refers to finding a specific niche you can fill. For example, Coke and Pepsi were fighting the cola wars and 7-Up, the "un-cola," filled an overlooked niche.
What is the importance of "consistently communicated"? Since your brand gets defined in your customers' memories, their experiences need to be consistent over time in order to build up a clear reputation in the market place. It's the difference between a lot of loud noise and a choir in perfect harmony. For example, if you pick a company color, you want everything in your company to reflect that color in a consistent manner. This takes discipline and constant monitoring. Secret No. 3: Accomplishing all three criteria leads to successful branding. Identify a unique way to fill a specific need and execute it consistently across all customer touch points.
Q: How can you remove yourself from comparison?
A: As a child I remember going to a grocery store called Stew Leonard's. My father packed up his five kids and set out to buy enough food to last us a month. The store focused on fresh food and carried no canned goods. They claimed to sell more milk than any other store in the nation.
Entering the store, the bottling plant packaging the milk was clearly visible. Large automated puppets – made to look like vegetables and milk containers – sing songs to the kids as they walked down the aisles.
Stew has expanded to three very large superstores and has made it into Fortune's 100 best companies to work for. Stew followed the three branding criteria to a "T." He picked a unique niche: farm fresh goods. He is known for cow's milk and for everything fresh your family needs: meat, fish, bread, and even fresh coffee.
Secret No. 4: Having a specific niche does not mean your business has to be low volume. Stew targets the family experience. Children love the puppets and his petting zoo. And, by focusing on "the customer's always right, no matter what," the adults have an equally good shopping experience. Stew executes his brand consistently and extensively, through newspaper and radio advertising, store layout, highly trained personnel and ease of parking at these mammoth stores.