— By Trip Jobe —
How physically maintaining your brand/facility will pay off in 2021.
Over the past 30 years, I’ve witnessed and faced the budget pressures most of us have all experienced in 2020. Two areas, that I know well, are usually the first places companies cut back: marketing and maintenance. “Push off today what can wait until tomorrow” is usually the refrain from senior management. “Don’t do anything that will impact safety or sales, but please hold the line.”
Trip Jobe, Rand Inc.
After 9 months of this approach, your valuable brands are beginning to feel and show the negative impacts of cutbacks in marketing and maintenance. Countless studies have shown that brand building takes 6 months to create impact. And conversely, 6 months of neglect is the time when brand image begins to dissipate. I’ve witnessed organizations where Marketing and Operations/Maintenance could be described as from different planets. But now is the perfect time for these two functions to come together for a common purpose.
Let’s face it, very few organizations set up a collaborative environment between Marketing and Operations. Many times, Operations feels like Marketing is pushing new brand standards out without logistical or inventory-related considerations. No one cares how much time it will cost to comply or how you have to dispose of old and excess signage and supplies. Marketing often feels like Operations is fighting everything and doesn’t see the beauty and benefits of a new look and campaign for the next season. The reality is a bit of collaboration, planning and understanding can solve this weak relationship.
Where 2021 Comes In
Most maintenance budgets are still on hold or significantly depressed. Marketing isn’t running yet with full budgets, but most organizations have granted a bit of latitude. Now is the perfect time for Marketing and Operations to sit down together and understand the bigger issues. Marketing can often help to fund some common facility maintenance issues that relate to the company’s brands. Signage or displays that have become well-worn or partially inoperable are perfect candidates to be updated or touched up. Facility exteriors or grounds that have become weathered and don’t reflect the brand’s promise is another area.
So why is this important? Studies over time continue to show the return on strong branding. A 2019 study from Les Binet and Peter Fields showed that B2B brands that invest at least 50% of their budget in long term brand building deliver the best financial returns in terms of market share growth, profitability and revenue.
Let’s also look at pricing power. The following chart is a current view of a simple household spatula at three different national retailers. In each case, this is the lowest price spatula offered by the retailer — no bells and whistles:
Low-End Kitchen Spatula Pricing, 2021
Retailer Segment Spatula Cost % Upcharge
Discount Retailer $1.00 N/A
Off Mall Home Retailer $2.99 199%
In Mall Specialty Retailer $6.95 595%
SOURCE: Atlanta area retail pricing, January 2021
Many things go into these home retailers’ brands, but their image and presence are a key part of their brands. The stronger your brand, the more pricing power you can influence. This is the quickest way to profit growth. A comparable increase in pricing (1-3%) vs. volume (1-3%) of sales will have a 2-4x impact on profits, depending on your margin levels.
Ideas to Consider for 2021
Develop a brand audit together: This is one of the more powerful tools for either your own locations or if you work with dealers and distributors. Marketing should put together a list of all signage, displays and overall aesthetic requirements. Then work with Operations to prioritize areas that need to be reviewed, refreshed and updated over time. Having photos of what is acceptable, what needs refreshing and what should be replaced is a great addition to this process.
Incorporate your branding into social distancing signage. Here’s an opportunity to subtly reinforce your brand and new social distancing norms. This is a great way to have Marketing support these initiatives.
Evaluate displays and signage for better ergonomics and inventory replenishment. One of the biggest challenges in many retail environments is when to update POP or large product displays. Now is a great time to combine branding, inventory needs and new shopping habits into developing a better model and update your brand.
Exterior spaces and opportunities for branding. Small and large restaurants and bars have had to be creative to find outdoor dining or sitting space. After necessity created this need in 2020, expect the outdoor dining trend to continue for the next few years. Look at potential upgrades of tables, umbrellas and chairs to a more permanent option with brand colors, branded umbrellas and chair backs.
Common Failures to Avoid
As with many of these success stories that I’ve seen, I’ve created a share of messes as well. Here are a few areas to make sure Marketing and Operations communicate upfront.
Understand all the options of where your branding may go. Early in my career, we created some floor aisle stickers for our network of national stores. We settled on a classic supermarket product for tiled floors to find out that about 10-15% of our customers had painted concrete floors where the adhesive pulled the paint off during cleaning.
Build a rollout plan that considers all resources. This is probably the biggest complaint I’ve seen over the years: an unreasonable rollout plan to update branding. Either product doesn’t come in together or it all comes in at once with no room for inventory and time to implement.
Ensure that changes to displays have the same measurements and tolerances. A few years ago, about the time I joined a national brand, they decided to update some large outdoor product displays. The new displays were superior in all areas, except the internal dimensions were about a half-inch shorter than the previous displays. It may not sound like much, but it created up to a 20% reduction in product available to display.
In every recessionary period over the past 30 years, there have been winners and losers. Companies that invested in maintaining their brands, digitally and physically, have come out on the winning side at a much higher rate. In this time of fiscal conservativeness, it’s unlikely that you can keep up with all the maintenance items that you desire. Now is the time to partner with Marketing to accomplish goals for both functions and the organization as a whole. Your brand and your profits will thank you!
— Trip Jobe is the CEO of Rand Inc., a strategic marketing and analytics firm. Prior to joining Rand, Jobe had a 20+ year history leading brands and sales teams as vice president of marketing, Neenah Paper and Kimberly-Clark, and director of sales and marketing at Oldcastle. Email: [email protected].