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Anchor Waves Newsletter – May 2013

Promotions vs. Brand Building

How To Find The Right Balance For Your Business

For your business to grow, people need to know who you are. That’s obvious. Less clear is the path that each unique business should take to tell the world about its products or services. Should you rely on promotions? Should you take advantage of brand building? The answer to both questions is almost certainly “yes,” and that means that a well-planned strategy is the key to finding your balance.

First, let’s get a feel for the difference between these two terms. Promotions are designed to achieve a short-term gain, and they typically produce instant results. Things such as coupons, value-added offers, free samples, rebates and rewards points are all promotions. Promotional messages tell your customers what they should buy and to buy it now, focusing on the product or service.

Brand building, on the other hand, is designed with long-term benefits in mind. Web sites, vehicle decals, Facebook pages and billboards are all brand-building strategies.

Brand-building messages tell your customers why they should buy, focusing on the features and benefits of your products or service.

Cathy Lindquist, executive director at the Northwest and West Central Minnesota Small Business Development Center in Moorhead, Minnesota, has her own way of describing these two strategies. “Promotions are like a shot in the arm to increase sales at a particular time,” she says. “They are a good way to give your business a boost, but you should use them in moderation. Brand building is more of a longterm commitment to the health of your business.”

According to Lindquist, too much promotion will diminish the sense of urgency and excitement associated with the promotion. In the end, overpromoting can create loyalty to the promotion itself, rather than to your brand, and your brand may suffer as a result. “For many small businesses, margins are already tight,” Lindquist adds. “I recommend to our clients that they compete on benefits, not just on price.”

So how do you know what combination of promotion and brand building is right for your business? It all depends on your customers, your competitors, the marketplace and more. A good first step is to take a closer look at what differentiates you to your target audience. The more you understand how your customers (and potential customers) see you, the easier it is to communicate with them effectively. Next, it is critical to decide on the goals of your business. Don’t stop at “more sales.” If only it were that easy. Instead drill down to specific, measurable goals like “Increase profits by 10 percent by increasing the sales of high-margin items, including paving stones, by January of 2014.”

Brand building, on the other hand, is designed with long-term benefits in mind. Web sites, vehicle decals, Facebook pages and billboards are all brand-building strategies.

Now that you know what you want to accomplish, you need to develop an annual marketing plan. This allows you to better visualize how the yin and yang of promotions and brand building can work in harmony to achieve your goals. Promotions might include a sale on paving stones, while brand building might entail a vehicle wrap on your truck that describes your company as the “Paving Stone Experts.” By creating a plan, you can better determine how to schedule these messages and then evaluate how well they worked.

If finding the right mix of brand building and promotions sounds like a lot of work, it is – but it’s worth it. “Winging it” with an overemphasis on promotions can be a recipe for disaster. On the other hand, a well-balanced marketing strategy can give you a boost when you need it and a foundation for success in the future – at the same time. Thankfully, we do this every day at Anchor Marketing, and we are here to help.

 

Long-term Benefits For Small Businesses

The Northwest Small Business Development Center Is Here To Help

MSBDC Logo

Starting a business is hard. Growing your business can seem impossible at times. Thankfully, for small business owners in northwest Minnesota, they have a powerful resource available to them. The Northwest MN Small Business Development Center (NW SBDC) is a consulting agency with administrative offices at Concordia College in Moorhead, MN, and a center in Bemidji, MN. It offers no-cost consulting throughout twelve counties, helping to ensure the survival and profitability of small businesses.

For more than thirty years, the NW SBCD has been helping an average of 250 businesses per year with everything from financial projections and loan packages to strategic planning and marketing. The organization prides itself on its set of vast resources (especially its financial contacts) and its track record of empowering business owners to take control of their own success. “We don’t hold anyone’s hand,” says Cathy Lindquist, executive director of the NW SBDC. “We present our clients with all the resources they could ever need, but the decisions and the work are ultimately up to them.”

Steve Eickman

Steve Eickman helps small businesses get back on track.

The team at the NW SBDC is made up of a core group of business professionals and private business consultants from around the region. In 2013, Steve Eickman, president of Anchor Marketing, joined the team. “We recently received funding to help out stressed or in-trouble businesses,” says Lindquist. “Steve has a high level of expertise in strategic marketing, which is just what these businesses need. We’re glad to have him onboard.” The NW SBDC is partially funded through the U.S. Small Business Administration, the state of Minnesota and Concordia College. However, half of its funding is attributed to cash donations. “One of the best parts about our service is that it’s free,” says Lindquist. “The contributions we receive from organizations and individuals in our region are what keep us going. We are so thankful for their support.”

Despite more and more businesses taking advantage of what the NW SBDC has to offer, some small business owners are reluctant. According to Lindquist, the hardest part for a business owner is asking for help. “A lot of people think you only need help when you are in trouble, and that’s not the case,” she says. “Every business needs maintenance.” And for those businesses who are experiencing difficult times? “We don’t pass judgment,” adds Lindquist. “We don’t care how you got where you are. We care about how we can help you get where you want to be.”

To learn more about the NW SBDC or to make a donation, contact them at (218) 299-3037 or go online to www.offuttschoolofbusiness.org/nwsbdc.

The Best & Worst

Rewards Programs

Best

  1. Starbucks – This is by far one of the best rewards programs out there. You get a lot of free stuff just for being a member – everything from free drinks to free syrups to free refills.
  2. Best Buy – $1 equals one point – it’s as easy as that. Plus, there’s no fee, making this rewards program a must for technology geeks and frequent Best Buy shoppers.
  3. National’s Emerald Club – Frequent car renters get superfast service and their pick of any car on the lot. For those who travel a lot, this one makes all kinds of sense.

Worst

  1. Celebrity Cruise Line’s Captain’s Club (Royal Caribbean) – You can’t even become eligible for the rewards program until you take six Celebrity cruises.
  2. Subway – After the scandal with its highly successful Sub Club cards, Subway’s new system is a big letdown for customers, with a free footlong after spending about $75.
  3. Any Supermarket Card – Studies show that products sold at supermarkets with card-loyalty programs tend to be priced 28 percent to 71 percent higher than products at card-free competitors.