Building an Effective Go-to-Market Strategy in a Highly Competitive Market – Part 3 of 4 – Building Brand Equity
In my last blog post I explained how adopting a strategy of selling on value rather than price helps companies succeed in highly competitive markets. In this post I will discuss why building brand equity is important, especially in competitive markets.
- Sell value
- Build brand equity
- Focus on the target customer segment
There are a number of different ways to define and measure brand equity. In the context of this post I am mainly referring to targeted brand recognition and awareness. After all, if everyone in the whole world knows about your company except for the people who buy it, than you are not doing a good job of building brand equity.
In highly competitive markets, there will by definition be many other companies offering a similar, or substitute products. There will also be many companies you compete with for mindshare (with whom you do not directly compete), but who offer related products to the same target segment — and this creates confusion. The more competitive the market is, the more your brand, and your message get diluted by all of the noise. When your brand is more recognizable from the rest of the competition in a crowded market it becomes a differentiator in and of itself. That is why building brand equity is so important, especially in highly competitive markets.
Assuming that you have the right target segment, and the right message for that target segment the biggest challenge to building brand equity is figuring out the best channels to get that message to your target segment, and then delivering that message consistently for an extended period of time. However, those two assumptions are critical, and in my experience working with expansion stage software companies, figuring out those two things can be extremely challenging. But once you have those two things figured out, there is a proven path to building brand equity that I have seen many times before in the software industry:
- Identify the right channels to reach your target segment
- Deliver your message consistently and over an extended period of time
Identifying the right channels is often challenging for smaller companies, but far from impossible. Here at OpenView Labs, our research and analytics team has developed a process to identify and prioritize the best channels to reach your target buyers, and users. Brandon Hickie outlined this process in a great blog post that he wrote a few months ago called Marketing Channel Research: How to Design a Prioritization Scheme?.
Another way for expansion stage companies to identify the right marketing channels and build brand equity is to make a strategic VP/Executive level hire that has already had success marketing to, or influencing the target audience. They should already know what the best channels are, and they may in fact themselves be a great channel to reach that audience. Then your research becomes more about validation than discovery. Depending on what you are selling, this person may be a CTO, CMO, VP Marketing, VP Sales, VP Channels, or even a CEO. Taking this route can often help smaller companies really accelerate the awareness of their brand just from the buzz related to this key hire.
Whatever path you take to identify the best channels to reach your target segment, the right leadership in your marketing team is critical to building brand equity. Some marketing executives that come from large companies are so used to focusing on big picture strategy that they no longer have the motivation or wherewithal to roll up their sleeves and manage projects, campaigns, and engage the channels, and with customers and prospects. That is okay at huge companies, but not at expansion stage companies. At expansion stage companies marketing leaders will learn more from engaging with customers and their marketing channels than any analyst report can tell them. This engagement is critical in helping the marketing team hone the message, and the way they communicate within those marketing channels.
The final step in the process of building brand equity is the consistent beating of the drum. Once you have identified the right channels, you must deliver your message through those channels as frequently and consistently as possible. If you discover that your target buyers are heavily influenced by trade shows, have a presence at all of the relevant trade shows. If you identify one particular industry group as the most influential channel in getting your prospects to buy, do everything possible to associate your brand with that group. You may identify some complementary product or service that many of your buyers use. Align your brand with their brand through joint marketing efforts and by enabling them to promote your brand for you. Whatever the channel(s) you identify as the most effective, make your customers and prospects expect to see you there. In order to really build brand equity you must become a staple within a channel. Your presence there must not only be consistent, but also spanning an extended period of time. At least one year.
In my current role I have the pleasure of working with some of the sales people at our portfolio companies. At companies that have executed the process above I have heard things like: “At the beginning of last year I would call people and they had never heard of us, and now almost everyone I speak with knows what I am calling about.” That is a sign that it’s working. In a highly competitive market, most of your competitors will be randomly posting ads and attending trade shows without a coherent plan. When you become a staple within a channel, it makes you look bigger, more stable, and it starts to create a deeper connection between your brand and your target audience.
While many marketers struggle to come up with the right marketing mix, it is often not the mix of many but the focus on the few that yields the best results. When it comes to building branding equity within highly competitive markets, this is a proven path.