Branding SME: How to make your brand stand out.

by | Jan 19, 2023

Branding is a game usually played by the top clubs. But branding also lends itself to medium-sized companies because digitalisation democratises communication and costs.

Everyone knows what branding is, right?

Branding is the strategic development of a brand. Branding uses communication and marketing to create an independent image that is distinguishable from competitors. Through branding, specific characteristics are attributed to brands, which are anchored in the minds of consumers.

The brand is a promise and a carrier of emotions.

For branding to work, the brand promise must be continuously kept. After all, the brand promises quality and service. In addition, branding provides an emotional link by tying people to lifestyles and lifeworlds. Because by acquiring a brand, we tell ourselves who we are and where we belong.

Corporate communications in transition?

Around 99% of Austrian and German companies are SMEs. SMEs generate 35% of total sales in Germany, and about 87% of Austrian SMEs have fewer than ten employees. The revolution in corporate communications driven by digitalisation is hitting these small businesses, as they suddenly have to compete against rivals in global markets. Today, consumers buy B2C when and where they want.

But buyers in the B2B sector also make purchasing decisions beyond regional borders and personal agreements. This means that entirely new skills are required of SMEs in communication. Whereas buying used to be handled personally by clerks and “the boss,” today, impersonal and digital sales channels bring new challenges.

Why is branding valuable for SMEs?

Communication of SMEs can be built strategically. Through branding, they can position themselves and their offerings in front of a broad audience. They become more visible online to new target groups and can revitalise cooled relationships. For example, in labour shortages, they become more visible and attractive to new professionals and employees as they emotionally connect with their company.

How does branding work for SMEs?

Compared to corporations, SMEs have a fraction of communication resources. Accordingly, the branding mechanisms must be adapted to this field of activity. But it is not even necessary to be present 360 degrees on all channels. It is much more important to know who you are, what you are saying and in which measures you invest. Then branding for SMEs works almost by itself.

As the basis of the brand narrative, this creates unique opportunities for SMEs and family businesses. They almost always have a great story. This needs to be worked out and told correctly. The values and vision of an SME are often very close because products and services are offered and created with conviction, passion and energy. In addition, they usually know their customers very well.

What does branding cost for mid-sized companies?

Branding is part of marketing and is often placed within the marketing budget. However, how much is reserved for marketing each year depends on the business model and the market.

In the manufacturing sector, Germany’s average cost of marketing measures is around 3% of annual sales. In the service sector, it is somewhat higher at about 10%. Brands that build their business model on marketing, such as Red Bull, will probably use multiple percentages of this.

It should be noted that communication and branding must be carried out on an ongoing basis. Otherwise, it will lead nowhere. Therefore, it makes sense to set up the budget so that continuous development is possible yearly.

Return of Investment? Does branding pay off for SMEs?

In 2007, the British Design Council published the following: Every £100 investment in design generated a £225 turnover. A straightforward calculation.

The truth is probably that investments in design and communication cannot be calculated as easily as investments in new machinery, for example.

Perhaps more interestingly, the same report found that companies that see design as an integral part are less likely to differentiate themselves from competitors on price. In addition, branding creates loyal buyers who provide security. Trust relationships within production chains and the company’s workforce are strengthened, and so on.

The added values that branding can deliver for an SME are manifold and should be understood as such in addition to the financial gain. Branding for SMEs has never been so easy and cost-effective, provided a well-prepared strategy is behind it.

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