When potential customers decided to purchase products recommended by The Dandelion Patch from lower-cost sources, owner Heidi Kallett did not entice them with better deals. She replaced mainstream items with high-end lines consistent with her focus on high-touch service and highly personalized products. As a result, her company has experienced double-digit, profitable sales growth.
Here are some steps to build your own brand:
Step 1: Define Who You Are
The Dandelion Patch is a specialty retailer, selling fine stationery and gifts; the company has four locations in Northern Virginia. The heart of its brand has always been warm, attentive and expert service. A focus on consultative sales has consistently differentiated The Dandelion Patch from its competitors. Friendly, professional employees deftly assess customers' styles, and offer guidance in making stationery and gift selections.
Step 2: Keep the Brand, Reassess the Approach
Customers gladly tapped employee expertise for product design and selection, but prospects soaked up expertise and then bought finished products from retailers with lower prices. Heidi couldn't afford to chase customers with discounts so she decided to abandon her (former) mainstay product lines.
Another segment of customers were a hindrance on profitability. When Heidi analyzed the return on her investment in acquiring new customers, she realized that those who stretched to buy even moderately-priced products were unable to afford complementary items. The cost of acquiring these customers and servicing their needs was relatively high given their lifetime value to the company.
Keeping incredible, informed, intimate service, Heidi deliberately elevated her brand to a luxury level. She sourced exclusive lines not available at lower prices. She pursued upscale customers who relished the opportunity to delightedly and repeatedly discover finds at her stores.
Step 3: Transform, Slowly
Heidi didn't alter her company's brand overnight. Transformation came at a slow but measured pace. Rather than replace merchandise with luxury items immediately, Heidi purchased and placed one new item on the sales floor at a time. She tested the appeal of the product (a high-end picture frame, for example) and, if sales were strong, began offering the item on a regular basis. She continued the process of updating and upgrading the company's offerings.
Her customers may have noticed subtle additions and deletions. As a consequence of gradual change, they embraced the newness rather than become alienated and confused. Just as significantly, this approach was friendly to the company's budget. New, higher-priced inventory was purchased with working capital.
Similarly, when Heidi decided to remove the color brown because of its mainstream connotation, she moved slowly. Instead of tossing out marketing collateral, she eliminated brown from reorders of everything with logos: bags, business cards, signage, etc. Soon, she will replace store interiors and the company's website with a cleaner look sans brown.
Step 4: Visualize Your Target Customer
Today, Heidi describes her company's brand in one word: Charlotte. Fictional character Charlotte York of the popular HBO sitcom Sex and the City exemplifies the target customer and embodies the brand. She is graceful, optimistic, creative, and devoted to her family and friends. Life's milestones are celebrated elegantly.
The Dandelion Patch is the go-to place for exclusive, fine stationery and one-of-a-kind gifts to share the joy of these milestones. Dandelions evoke memories of carefree days and making wishes. As dreams come true, customers visit The Dandelion Patch to celebrate and commemorate weddings, births, special birthdays and more.
Step 5: Let the Brand Drive Business Decisions
The brand image is embedded in all marketing messages, print and digital. Even tweets adhere to etiquette and grammar rules, consistent with The Dandelion Patch's commitment to propriety and graciousness.
However, branding influences business decisions beyond marketing communications, such as:
Product offerings with custom designs reflect the luxury status of the brand. Merchandise exclusivity allows Heidi to protect her pricing in order to afford payroll costs associated with hiring and retaining qualified employees.
- Return on Investment (ROI) of Customer Acquisition
By elevating the brand, the target audience can afford not only the expense of wedding invitations but also the cost of day-of paper (such as menu cards and programs). These customers also tend to generate repeat business for milestone-related items, gifts, and corporate stationery. As a result, the ROI for customer acquisition and the lifetime value is much higher at the luxury level than the moderate price point.
Customers who pay premium prices expect expert assistance. Employees need to be friendly, attentive, professional, and knowledgeable in order to serve customers properly. Heidi thoughtfully and carefully selects her staff.
She employs and mentors high school students, but they are assigned to basic tasks such as refreshing inventory and operating cash registers rather than advising customers.
The Dandelion Patch has a philanthropic strategy to differentiate itself through prominent support of a main beneficiary: Childhelp, a national organization serving victims of child abuse and neglect. This focused approach helps to raise awareness of the company's commitment to philanthropy, consistent with its brand image.
Step 6: Live the Brand
Live and breathe your brand every single day, Heidi tells me. If your brand resonates as Charlotte, don't switch midstream to Samantha. Be consistent in all marketing communications, interactions with customers, and business decisions.
Time for a brand makeover? Learn more about how your brand can represent – and shape – your business in the Project RE:Brand webisode series by American Express OPEN. Project RE:Brand follows five small businesses as five creative agencies help them re-envision their brands.