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Time to grow

Brand expert James Hammond, known as the Brand Doctor, and the author of Sunday Times bestseller Branding Your Business, explains why creating emotional connections with customers is the path to a happy New Year

As the facilities management sector heads towards a potential value of around £122 billion, it would seem that FM companies have a lot to look forward to in the year ahead. Winning new customers and gaining larger contracts from existing clients – it should be an exciting vision.

But sadly, that’s not the rosy picture many FM suppliers are painting for 2018. The sector has already witnessed some of the biggest players in the market reporting pre-tax losses this past year. Others are managing to keep their heads above water, but have made little impact in terms of real business growth.

While there may be various factors contributing to the cautious attitude about 2018, it’s clear that many companies are simply not making the most of their brand. Yet, a brand is the one critical factor above all else in achieving business success and growth, regardless of the FM products or services on offer. In the super-competitive FM sphere, commoditisation is widespread, focusing mainly on price alone. This shouldn’t come as a surprise, however. Without a discernible brand, there is little to compare between one FM supplier and another.

In contrast, having a strong brand puts any FM business on a different level. Customers are willing to pay premium prices when negotiating with a robust brand. And with the FM marketplace heading towards the ‘bundled service’ approach, brand extensions can be leveraged far better than starting from scratch.

Managed correctly, branding your business successfully can mean lower unit marketing costs and higher asset utilisation through economies of scale. What’s more, business growth can escalate at much higher rates, gaining stability in long-term cash flow and dramatically raising shareholder value.

Why, then, do so many FM companies struggle to create meaningful brands that fail to bring about new business – or prevent losses of existing customers? Several reasons exist, but three specific problems lead the way.

A brand has nothing to do with a logo, despite the amount of money often spent on designing elaborate signs and symbols. Nor is it a visual identity, typeface, product name or strapline. Even FM suppliers with all these elements in place are often persuaded to hand over more hard-earned cash for ‘rebranding’ – one of the biggest deceptions in the brand arena.

A brand does not rely on the latest CRM systems or other forms of digital transformation, either. Yet FM businesses are zealous to point out their investment in automation of one form or another to the exclusion of more important customer-focused elements.

The bottom line is, a brand is not built around typography or technology. It’s all about psychology. One good definition of a brand is ‘the total emotional experience a customer has with your company and its product or service’. The key point here is that the customer owns that emotional experience. It’s an intangible mental construct in his or her mind. The task of the brand is to influence customer behaviour and so create that strong, long-term emotional engagement.

But many companies fail to understand how customers think or how to create real emotional connections. In a survey I conducted of 25 FM supplier websites, each one rambled on about tangible things such as product or service features, technical jargon and methodology. On several sites, I counted on average 30 sentences in succession starting with ‘we’ – and hardly a ‘you’ in sight. These typical one-way conversations miss the point, and totally ignore the way to influence the intangible brand impression in the customer’s long-term memory.

I’ve consulted for many businesses in the FM marketplace. Almost without exception, the sales, marketing and brand disciplines have been separated verging on the point of non-contact. Because of this isolation up to 92 per cent of prospects generated by marketing are not closed by sales forces. Even worse, marketing itself, which should be inseparable from – and in fact drive – the company’s brand strategy has long lost its seat at the board.

Recent studies show that 80 per cent of CEOs and managing directors have no confidence at all in their marketing department. Reasons for this shocking state of affairs include the fact that 79 per cent of marketers are unable to understand a P&L and balance sheet, so they cannot give any positive financial outcomes when presenting marketing results to top management. Coupled with this, 64 per cent use ‘brand awareness’ as their top marketing KPI, even though they can’t link it to sales and revenue. Little wonder, then, that strategic business plans are rarely built on marketing forecasts.

Many FM companies I’ve studied often repeat the phrase ‘our people are our business’. That’s a positive view. Surveys conducted in both the UK and the US show that companies where employees understand and buy into the brand can expect up to a 30 per cent greater return on their staff investment than other firms.

Much of the time, however, employees in FM businesses are rarely given any coaching or training in understanding what a brand is, apart from the usual elements covered above – logos, typefaces and so on. But for a brand to be successful in the market, it must have all employees understanding their role in turning brand aspirations into reality, especially those on the front line of customer sales and service. When employees fail to deliver emotional brand experiences throughout the customer journey, the company brand becomes meaningless and quickly falls into the
commodity rut.

With all the Brexit chaos, and the uncertainty surrounding the eventual outcome, 2018 may be a challenge for some. Yet even in troubled times, a brand remains the top level strategic driver of any FM business, large or small. Build your brand around customer psychology, especially why and how FM customers buy. Because when you get that emotional engagement working successfully, you may just have a Happy New Year – and beyond. Something worth thinking about.

About Sarah OBeirne

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