Branding – Some Must Do’s for SMEs

What is branding and how relevant is it to SMEs?

What is Branding?

  • Simplest definition by brand guru, Robert Bean (of Honda's "Power of Dreams" campaign): Brand is a "promise delivered". You make a promise to customers & colleagues with everything you do and you must deliver on that promise every single time. A brand is a promise of value that delivers a certain distinctive customer experience.
  • A brand is a compelling identity that creates an enduring emotional connection with your customers.
  • A brand is not owned by the company, it’s owned by the customers: if your customers don’t believe in the story of your brand, your brand doesn’t really exist.
  • Brand is much more than your logo, merchandising or product. It is the sum total of the experiences customers have with your business. This includes the visual elements of your business, but it also includes what you do, how you do it, what your customer interactions are like, the type of information you share in your marketing and on social media. All these elements help establish the trust and credibility of your business.
  • Branding is a way of defining your business to yourself, your team and your external audiences. It is your business’ “identity”.
  • Branding embodies the core of what the business is and its values, not just what it looks and sounds like.
  • Customers of all sorts of businesses are so savvy today that they can see through most attempts by companies to gloss, spin or charm their way to sales.

Then, what is Marketing?

  • Marketing is actively promoting a brand’s product or service. It’s a way of reaching and engaging people. Marketing keeps your company top-of-mind among the decision-makers you are trying to do business with.
  • Branding comes first and marketing comes later.
  • Marketing, then, is an integral part of your brand. It helps you to communicate the promise that you want customers and prospects to know about.

And finally, what is Advertising?

  • Advertising is just one component, or subset, of marketing.
  • The best way to distinguish between advertising and marketing is to think of marketing as a pie, inside that pie you have slices of advertising, market research, media planning, public relations, product pricing, distribution, customer support, sales strategy, and community involvement.
Some truths on branding

Branding – some truths

  • Everything that your company does – customer service, stationery, website design, the way you answer the phone, the way you handle customer complaints – is part of establishing your brand.
  • Branding is continuously happening whether you want it or not. Important is to consciously work on building it.
    Branding is an ongoing process. It takes time, effort and commitment – it’s not something that can just be conjured up with some flashy ads.
  • A brand is something that everyone at the company has to “live” every day – and it’s not just about slogans and pep talks and making people feel good about their company.
  • Branding has no formula – branding is and will always be a customized experience.
  • Companies that try to “build a brand” first, without having these other elements in order, are putting the cart before the horse.
  • When customers connect emotively — because they share the same values and beliefs of a brand — it leads to higher sales and better brand differentiation (E.g. Apple). It also leads to loyalty, advocacy and can even protect your price in times when competitors rely on promotional discounts to drive sales. It can also give you the ideal platform from which to extend your offering or range.
As SMEs, how do we then “consciously” build our brand?

Start by defining your brand

  • Review the product or service your business offers, pinpoint the space in the market it occupies and research the emotive and rational needs and concerns of your customers.
  • Your brand character should promote your business, connect with your customer base and differentiate you in the market (E.g. Virgin Mobile).

Consider what is driving your business.

  • What does it believe in, what is its purpose and who are its brand heroes. These things can help establish your emotive brand positioning and inform the identity and character for brand communications.

Have great products and services

  • Word of mouth is often a small businesses greatest lead generator, so having great products and services that people talk about is a critical part of your brand and why you are in business. Even the most outgoing and charming small business owner is not going to succeed in bringing customers back, unless the product or service they provide delivers and exceeds expectations.
  • Don’t lose sight of your product – keep refining it, testing new offerings.
  • E.g. Cinnabon: An American chain (HQ: Sandy Springs, Georgia of baked goods stores and kiosks. The company's signature item is a large cinnamon roll. As of July 2009, over 750 Cinnabon bakeries were operating in more than 30 countries.

E.g. Natural Ice Cream:
Started as a 300-sq-ft ice cream parlour at Juhu in 1984, it now has 90 franchise outlets across West and South India.
Contain no artificial flavours, no preservatives or stabilisers, only fresh fruit pulp or dry fruits.

"Machine-made fruit ice cream needs additional artificial flavours and colouring in the final product. That is something that I fundamentally disagree with.“ says … R.S. Kamath - Chairman , MD and Founder of Natural (he separated from Gokul Ice Cream, started by his brother in 1983)

Be Strategic & Have a Value Proposition

  • Ask yourself the following
  1. What niche do you serve?
  2. What do you do well in that niche that makes you different from everyone else?
  3. What are the emotional benefits of what you do?

The answers to these questions will help define what your value is to your customers – it could be your great customer service, product quality, innovation, or any combination of these.

  • There are so many potential customers, but you can only target that subset whose needs you can confidently cater to.
  • Know your strengths and limitations and identify a subset of those customers.

Be Reliable

  • Do not let your customers down by failing to live up to your own promises and brand standards.
  • Do not overpromise. Small businesses generally depend heavily on referrals. The foundation of brand loyalty lies in great service – a happy customer is a loyal customer. So make sure you aren’t making promises that you can’t keep – whether you run a pizza business and pledge to deliver within 30 minutes, or are a painting contractor who promises to start a job on a Monday at 9:00 AM sharp. Stand by your promises.

Avoid raising expectations resulting into broken promises

  • Don’t dress up your offering and raise expectations that result in broken promises (companies offering drastic weight reduction)
  • Create trust with honest branding — be clear who your company is and be true to the values that drive it every day.

Speak to your customers with a consistent tone of voice

  • It will help reinforce the business’s character and clarify its offering so customers are aware exactly what to expectfrom the product or service.

Don’t try to mimic the look of chains or big brands

  • Try and carve out your own distinctive identity. There is a big consumer trend towards independent establishments, and several chains are in fact trying to mimic an independent feel to capture some of that market. Truly independent operators can leverage their status to attract customers who are looking for something more original and authentic.

Be innovative, bold and daring – stand for something you believe in

  • Big brands are encumbered by large layers of bureaucracy, preventing them from being flexible and reacting to the ever-changing needs of their customers. Those layers of decision-makers can make it hard for them to be daring with their branding.

Always consider your branding when communicating with customers

  • Don't lose your pride or dilute your brand positioning with indiscriminate discounting. E.g. Try offering more, rather than slashing prices.

Build community around what you do

  • A successful brand is one that is trusted and respected by customers – building a strong community online and offline can help you achieve this.
  • You don’t have to spend a lot of money to do this. In fact, many successful brands concentrate almost exclusively in online and offline community building as opposed to traditional advertising. Facebook and Twitter are great outlets for this, as is your blog.
  • Offline participation in community activities such as local events, fundraisers, charities, as well as hosting your own events such as workshops or loyal customer events, can all help you build community and extend the trust you’ve earned to your brand.

Make sure your customers know the face behind the product

  • One of the biggest reasons that small businesses fail is because of the persistent absence of the business owner. Without an actively engaged owner, employees lose motivation and structure, which can quickly lead to sloppy service, a poor product and customer churn.
  • Your business needs to be able to function without your constant presence, but it’s important to strike a balance – find ways to make sure your customers know you and connect with the face behind the business. Businesses really thrive when the energy of the owner is there.

Think Big, Be Big

  • Being a small business does not mean that you are a small fry. Your brand is essential in helping your small business be portrayed as a serious player.
  • As per a study in USA, 71 percent of Americans view small business more favorably than any other institutions. Their products and services are often niche; the target customer is very defined; and business operations are agile and unconstrained by corporate rules and processes.
  • Think big with your brand, and use it to capture potential clients and win their trust.

Three tools an SME entrepreneur can’t live without

 

Perfios (PERsonal FInance One Stop)

Perfios is a web based Personal Finance application that provides a complete view of your financial status at anytime. It helps track everything that revolves around your finance inclusive of Bank accounts, Credit Cards, Mutual Fund investments, Equity accounts, Insurance policies, Loans, Fixed Deposits etc.
Auto Update feature helps you import all your transactions across multiple accounts in Perfios. It helps compute your Income Tax, file your Income Tax, store financial documents, see your shopping, dining and other spending patterns.

 

LastPass

LastPass is a freemium password management service which seeks to resolve the password fatigue problem by centralising user password management on the cloud. LastPass is standard with a web interface but also includes plugins and apps for many modern web browsers.
Passwords in LastPass are protected by a master password, encrypted locally, and synchronized to any other browser. LastPass has a form filler that automates password entering and form filling. It also supports password generation, site sharing and site logging.

 

Tally

A software used for vouchers, financial statements, and taxation across industries.

Role of an SME CEO

 

As CEOs of our SME setups we often (or rather always) find a large gap between what we (as CEOs) should invest our time on and what we ultimately end up doing. Through this small write-up, I am sharing my views on where should a CEO of an SME spend his time on and how can he ensure this balanced distribution.

 

A) Four Levels of Management:

Broadly, the 4 levels of management are as follows such that they form a pyramid (triangle) with Governance layer at the top and 'Operations' at the bottom.

1) Governance
2) Management
3) Administration &
4) Operations

 

In single-person organizations, the owner/proprietor alone has to address all these 4 layers such that most of his time is spent on 'Operations' and the time required to be spent reduces over layers above. However, practically, many such entrepreneurs may commit a mistake of getting too much caught up in Operations & Administration with no time left for higher layers leaving these unaddressed most of the time. This results in such entrepreneurs always being in 'Execution Trap' with no time left for strategic & tactical considerations. The result of this imbalance over a period of time is obvious.

 

For entrepreneurs who have teams, responsibility of different leaders in the hierarchy span across one or more layers. Here, the entrepreneur must ensure that he spends most of his time on Governance & Management and leave the layers below to his 2nd & 3rd line managers. Here, a mistake that an entrepreneur often commits inadvertently is to 'creep' into his next line's scope of duties and spend a lot of time on lower layers thus creating overlapping responsibilities. At even more basic level, most entrepreneurs heading decent sized teams do not create strong 2nd & 3nd line managers thus ending up handling all the layers above Operations and additionally carrying a lot of opertional load too.

 

B) CEO's Focus Areas:

To ensure a balanced distribution, a CEO should focus only on the following w/o getting caught in transactional activities:

 

- Systems & Processes (Setting up & maintaining)
- Oversight (through suitably designed dashboards)
- Intervention (where team may require guidance and support and/or where things seem to be headed in the wrong direction)
- Control (through effectively designed control systems)

 

Kindly share your views too!!

 

Warm Regards,
Vikrant Vartak

MD – The Senate Business Center
Founder - Mavens

Indirect Marketing

 

We all have been witnessing over the last few years that business organizations (small or big) are becoming highly aggressive in sales, marketing & promotion activities. All media, including FB & WhatsApp, is being used ‘to the hilt' so much so that receivers (& not all of them are your prospects too!) are getting annoyed and tired of you pushing them ‘hard’ for sales and with information which may not mean much to them (e.g. your achievements, laurels etc etc)! Despite all this undesired ‘pushing’, the effort doesn’t bear fruit as the receivers (including your target customers) are getting increasingly immune to all this extensive (& intrusive) ‘noise’ (because you are not the only on doing so). It may even result into a negative image being created.

 

In such a scenario, ‘Indirect Marketing’ would help you pierce this noise/clutter. For the sake of clarity, indirect marketing is any form of marketing that doesn’t try to sell something directly to consumers, but rather allows businesses to build relationships with them. Easy examples of this can include social media, blogging, or newsletters. However, stronger examples would be (1) some construction house running a free ambulance service, (2) some business organization carrying out an event (say a polyclinic conducting a free eye check-up camp) which adds value or contributes in some ways to society at large (or the target market specifically too). At The Senate Business Center, we carry out a lot of Entrepreneurship Development activities free-of-charge like Talk Shows, Study Tours, Knowledge Sessions (known as 'Essentials for Entrepreneurs series), educational movies, Networking Sessions etc.

 

A good indirect marketing effort will get you noticed and induce people to know more about you w/o you having to ‘push’ your way through. The fact that you are adding value to them will help create some relationship or at least some goodwill for you.

 

Well known social media evangelist Mahesh Murthy says "Your marketing IQ is inversely proportional to your marketing budget!" I am sure smart entrepreneurs like us can think and discover many ways to ‘indirectly market’ our organization/product/service :-)!

 

Warm Regards,
Vikrant Vartak
MD – The Senate Business Center
Founder - Mavens

Why SME Entrepreneurs Can’t Get Away Without Knowing Accounts?

 

Most entrepreneurs are passionate about business functions like Strategy, Marketing, Branding & Sales. However, you would find very few who have a liking for Accounts. Most entrepreneurs quickly absolve themselves by declaring that they do not like Accounts and that they have left it to their Chartered Accountants (CAs) and to their internal Accounts function. The mistake they make is not thinking about how they can use well maintained books as tools to better manage where their business is headed tomorrow.

 

How things go wrong?

 

1) Your Chartered Accountant

I have come across many entrepreneurs who simply maintain some excel sheets of their sales & expenses (some do not even maintain these!). They simply handover these excel sheets along with their hard copy invoices files to their CAs for their book keeping. This is generally done in preparation of some statutory compliance (Income Tax/Service tax/VAT returns etc).

For a CA, an SME entrepreneur is generally a not-so-important client and one amongst a few hundred of them. Naturally, some junior level CA intern (in CA’s office) who neither has the skill nor the will to do a good job, is assigned with this task. Most important, these fresh interns have no idea of your business & domain and no idea as to what does an SME entrepreneur look for in his books (of course, many entrepreneurs do not even looking for anything :-)!). These fresh interns follow a ‘garbage in, garbage out’ principle and simply produce something that merely addresses the statutory compliance requirement (& in most cases erroneously).

Most SME entrepreneurs do not have licensed Tally software. For some who own, they lack the skill to meaningfully navigate through their books and the will to even demand their Tally backup files from their CAs.

 

2) Your internal Accounts

Most SME entrepreneurs do not have any in-house accountant/s. In many cases, they simply expect some unskilled person to double up as an accountant. In an SME setup, given limited pay scales, very senior & skilled accountants cannot be hired. Since most entrepreneurs have a very step-motherly approach towards the Accounts function, they end up leaving the entire bookkeeping to these unskilled/semi-skilled accountants. In addition to the skills gap, these accountants majorly lack the perspective and business understanding required to design and maintain books which can serve as strong MIS for business. Most of them are not mature & disciplined enough to maintain books meaningfully ultimately leading to a ‘garbage in, garbage out’ approach.

What can be done?

 

1) Spare a budget for an accountant & maintain books internally: First & foremost, it is important to hire at least one accountant with a fairly decent level of accounting skills. This would also ensure that books (most likely in Tally in an SME setup) are completely maintained internally. Also, make sure that the accountant keeps your books updated at all times. Only when this happens, your books will serve as a good MIS for you. Well maintained & up-to-date books result into organizing data meaningfully for you to analyze. It offers you a gauge of your business’ current performance in almost every aspect. Your books provide you with hard facts and figures on what your business has been doing and how it’s faring to date. Through accounting, you get a good measure of where your business is at and how far or near you are to where you actually want to be.

 

2) Build basic level of accounting skills: If you’re like many entrepreneurs, you likely went into business to pursue a passion and not to become an accountant. Nevertheless, you cannot be totally hands-off and you need to closely work with your CA and your internals Accounts team. This would require that you have a basic level of understanding, if not more, of Finance & Accounting concepts.

 

3) Be involved at a day to day (/regular) level: Keep reviewing your books at a day to day (/regular) level not only to ensure that they are maintained well but also to keep getting a holistic view of your business. Keep overseeing your accountants work, and challenging when required, at periodic intervals to ensure that he/she is doing a good job with it.

 

4) Work closely with your CA and challenge him where required: Most entrepreneurs do not have a direct access to their CAs. It is important that an SME entrepreneur regularly interacts with their CAs and work closely with him to ensure that his books are meaningfully maintained. He should ensure that completely ready Tally backup files are provided to the CA as an input for his value addition and review. Various computations (Income Tax/Service tax/VAT/PT) etc be done internally and provided to your CA. Understand what changes/value additions the CA is carrying out and discuss those with him. A CA has limited time/bandwidth available for your work and therefore he may miss out on various things. Your detailed review would help you point out these gaps to your CA. At times it may be required to challenge your CA too.

 

5) Maintain your records carefully: Ensure that you have an intuitive folder structure on your server (/centrally) where you save your Accounts related files (challans, computations, Tally backups etc) with correct naming conventions. Ensure that, as a practice, your files are backed up and regular intervals.

 

We are all in business to make money (though this may not be the sole aim). However, by turning a blind eye to crucial business functions like Finance & Accounts, we are jeopardizing our most vital business goal. Can SME entrepreneurs (equally applies to any entrepreneur) really afford to do so and get away without knowing Accounts?

 

Warm Regards,
Vikrant Vartak

MD – The Senate Business Center
Founder - Mavens