Wednesday, July 6, 2011

4 Common Branding Mistakes Startups Make

Branding is extremely important for small companies that want to grow and sustain their businesses for the long term. It is a major challenge for a small business to establish a brand because of the lack of funds, resources, people and time. Yet branding is what makes your company attractive to investors, consumers and future employees. Your brand is the relationship you have with your customers and relationships are not built overnight. A lot of entrepreneurs have difficulty with branding because they prioritize product development and sales before meaning and experience. A company that doesn't have a well-defined brand will have trouble with differentiation in the marketplace and with generating media awareness. Here are some common missteps to watch out for.

1. They don't define a set target market

In order to gain visibility in the marketplace, it's imperative that you are specific with the types of customers you're going after. You can't be everything to everyone or you'll be nothing to no one. Too many entrepreneurs think that they need a mainstream product for the highest potential sales. By defining and segmenting your audience, you can appear higher in search engine results and the "right people" will find you and want your product. Think about the age, gender, geography and lifestyle of the people you're targeting and don't be afraid to define your market in public. For example, instead of being just another law firm, you can position yourself as "legal counsel for young entrepreneurs in Charlotte." If a young entrepreneur in Charlotte is looking for legal support, they will search online and your website will come up. Since you have a well defined position, they will choose you over a more generalist firm that doesn't understand their needs.

2. They focus too much on advertising and not enough on PR

Sixty-three percent of small to medium-sized businesses advertise online, according to a survey by Affinity Express. While targeted advertising on specific blogs, websites, and through Google AdWords and Facebook Social Ads might help, it's well worth the investment to get PR support and partner with brands. Public relations is extremely important because what other people say about your brand is more impactful than what you say about yourself. Self-proclamations don't build brands; the media does. It's far better to have a profile in Fortune magazine than it is to pay for a full-page advertisement in the magazine. Earned media is much more respected by customers. Small businesses typically don't have well-known brands so they require third-party endorsements and partnerships in order to become established. If people haven't heard of your company, then it's helpful if you create strategic partnerships with companies that your market is familiar with. By associating your company with a well-known brand, your company becomes more credible and your brand grows.

3. They don't build a strong Web presence to attract new customers

Every single business should have a website, but 55 percent of small businesses don't have one, according to data analyzed by Formstack. How are potential customers supposed to find you? People are searching for you online and every time you don't come up, there's another missed opportunity to build your business and brand. Consumers turn to the Web first before making a purchasing decision. A strong Web presence allows you to point people to where they can find more information about who you are, what you do and what products and services you offer. Instead of blowing money on advertising, invest your resources in social media and your website. Consumers also turn to their friends, through social networks, when deciding what company to purchase from. That's why it's crucial, more than ever before, to create your own profile pages, and engage with your customer base. Start by concentrating your efforts on the top three social networks: Facebook, LinkedIn and Twitter.

4. They disable their employees from building their brand

Forty percent of small businesses have a policy that prohibits employees from visiting Facebook, reports Webroot.  Small business owners should let their employees use social networking sites as long as they are doing it for the benefit of the company. Consumers want to hear your story and connect with your employees to get a better sense of your company. If you enable your employees to become evangelists for your company, then you will be able to scale your marketing and foster stronger relationships with your customers. Your employees should be able to build and develop their own personal brands because then they become more valuable to your company.

Dan Schawbel is the Founder of Millennial Branding, a full-service personal branding firm based in Boston. He is the author of Me 2.0: 4 Steps to Building Your Future.

Thanks to Dan Schawbel / Open Forum / American Express Company

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