Are You the World’s Best Kept Secret?

It will be difficult for customers to buy your product, if they do not even know that your brand exists. So, how should you build that awareness: the quick, capital-intensive, media-heavy way, or the slow, steady, time-intensive, capital-light route?

By Jessie Paul

The brand head of Infosys was recently quoted in a publication saying that the IT firm’s unaided brand recall in the US was 8 per cent. That’s the biggest market for this US$5 billion firm. He went on to add that Infosys was now in the second level, after big spenders like IBM and Accenture.

That puzzled me, as it has for some time. Why do most Indian firms shy of becoming “big spenders”? Their logic is that a B2B firm sells to a specific, qualified audience and there is no need to be known beyond that closed community.

Cisco, which sells high-end networking equipment to companies, is also primarily a B2B firm. Yet, last year, it ran a mass-media campaign in India on the “Human Network” theme—many of you might recall the cute wedding scene with tele-presence. It is also involved in local corporate social responsibility activities and is well integrated with the local business community.

I asked one of its US brand folks why they were investing so much in building mass awareness when their potential buyer base was quite narrow. His response was that while a targeted approach might cost lesser, it would take much longer. And given the importance of India, they couldn’t take the risk that someone else might own this market—it was imperative that Cisco be the provider of choice, and fast.

In my previous column, I talked about answering three key questions as a business—Who am I? Why buy me? Why not buy someone else? But having the right answers to these questions will not translate into sales, if your clients don’t know of your existence. Your product or service has to at least be considered by the buyer, before it can be bought.

Clearly, awareness is important to sales. And there are two routes to building that awareness: the quick, capital-intensive, media-heavy approach, or the slow, steady, time-intensive, capital-light route.

The question is, as a mid-sized business, which road should you take? Ask yourselves these questions to arrive at an answer:

Do you have capital?
When clients ask me how much they should budget for marketing, my answer is always: as much as you are able, and then some. Firms such as Salesforce.com and Netsuite had SG&A costs ranging from 50 per cent to more than 100 per cent at various points in their life. Oracle now runs at around 20 per cent.

How important is it to gain market share rapidly?
If your product or service relies on scale for efficiencies, then you need to invest in gaining the required market share. Or, if you feel that your offering can be copied soon, you need to capture market share quickly. On the other hand, if your offering doesn’t need scale to be profitable and isn’t easy to replicate, then you have the luxury of a slow increase in market share. It’s worth mentioning here that company growth and increase in market share aren’t always linked, because the company may be growing rapidly on a small base.

What is the competition doing?
A foreign entrant in the hospitality products space shook up the Indian incumbents by offering their product for free. (They made their money eventually with annual maintenance fees.) In such a case, you will have to ramp-up marketing spends sharply if you want to defend your turf.

How important is the surrounding eco-system?
You can reach a tightly defined group of buyers with a capital-light approach. This is highly recommended where the target audience is known and contained. But if influencers, such as the government, NGOs or media, play a large role in your business, then this may not be sufficient. For example, big B2B firms such as Vedanta and Mittal Steel are investing in a social media strategy. Their target audience in this case would be NGOs, who influence the response of local land-owners and farmers to land acquisition for mining or factories.

Still want to know what per cent of revenue should go to marketing? Well, if you’re going the slow-and-steady route and are a B2B firm, not an FMCG, even 2 per cent might work, though this means you’ll have to compensate with a lot of additional time investment. You may also face a 20-year horizon to gain awareness. But if you want rapid growth, you’re looking at anything from 20 per cent to 100 per cent at least for the first three years.

A brand investment shifts your marketing strategy from feet-on-street driven “push” to consumer “pull”. There are some simple metrics that can help you determine where you are today.

What per cent of your sales are through call-ins, online forms and e-mail requests? If the answer is more than 50 per cent, then you know you are on your way to a “pull” brand. The role of sales becomes that of guiding the customer and conversion.

Another measure is the per cent of your business that is non-compete or solus, i.e., you were the only company invited to participate. This also reflects the strength of your brand. For example, if you’re an Apple loyalist, you only choose among the Apple range of products without even evaluating a Dell or Lenovo. And when you have that kind of brand loyalty, it makes sense to become an end-to-end player—after all, consumers want to buy from you and will only explore another brand, if you cannot fulfil their need.

Many CEOs, particularly in India, believe that “if my product is good, people will buy”. That was partly true in pre-liberalisation India, when, thanks to the License Raj, the options were few. In a supply-driven scarcity environment, brand building takes a back-seat.

But those days are long gone. Technology, deregulation and outsourcing have lowered the entry barriers in many industries. And where there is competition, brand is your only defence against commoditisation. Relying on the product alone to sell is like buying a super-duper mousetrap and deciding to skip the cheese. The mouse is just not going to find the trap.

If you dream of a future where prospects walk into your door wanting to buy your stuff, or, better still, where you have a backlog of orders to service, then the route you should choose is clear.

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