I set off a good discussion on Twitter recently by asking “Do small businesses really have a ‘brand’ or are we all kidding ourselves? Do we really have a backstory with personalities?”. The question got the response I expected, as the word brand has become ubiquitous, covering all number of different areas; reputation, proposition, story, personality, service level, all of which can be part of a brand, but don’t constitute one in it’s own right.
I don’t believe (with the possible exception of Hargreaves Landsdown) that there is a single advisory business with a brand in the UK. I also don’t think it matters for 99.9% of them. So why am I even bothering to write? Because the marketing tools we select and expertise we listen to can be wrong for our business, if we don’t understand the ‘language’ of marketing. What you think of as a brand, and what you may learn from a professional marketeer about building a brand may be two separate things altogether.
I learned this the hard way, having appointed a marketing agency to do some work for us. They did some extensive research in our sector, looking at us, competitors, IFAs and end consumers. The feedback was striking. There was no real recognition of any business beyond the client’s own experience of it. Whilst some competitors had built a vague understanding that they were cheap (maybe not out of design) there were very few people interviewed who could articulate anything about any business other than those they had already used for services. This applied both to advisers using support services, and end clients using IFAs. What did exist was a story behind some of these businesses, a personality which had developed around an understanding of who had set the business up, why it had been set up and what the business owners were trying to achieve. In the context of an IFA business, there’s nothing wrong with that. Business is generally acquired by referral or through discussion, meetings take place, connections established and there is plenty of time to articulate your message in a personal way. Having a true ‘brand’ is different. Putting your logo in front of an unassuming member if the public and asking them to explain who you are and what you stand for will just draw blank faces. That’s what I mean by branding, and it takes a lot of money to do it properly. Understanding what you do, what you stand for, who you do it for, how you do it and where, is much more relevant for IFAs. It just isn’t a brand.
Given that I don’t think it matters, what’s the problem? Well, there was a view a few years back that the advisory sector would be dominated by a small number of huge national IFAs who would inevitably win all business because of the strength of their brand and ability to win clients as a result of it. Everybody else would be a niche specialist feeding on the scraps. This was, is, and always will be complete nonsense. There isn’t a pure advisory business that could or will develop a brand in this way, even SJP haven’t cracked it on a significant level. Hargreaves arguably do, but they need a brand to sell a service with (usually) no human interaction to tell the story. They also spend millions developing it, and have been working on it for the last 25 years.
This is good news for IFAs. You might not have a brand, as pure marketeers know it, but you don’t need one. And the barriers to building a brand are so big, it’s unlikely anyone is going to build one from scratch and wipe you out soon. Many product providers don’t have a brand (Lloyds don’t even leverage the Widows brand!). The brands that you should be worried about are the supermarkets (no not the fund supermarkets, Tesco, Sainsbury’s etc) and Amazon, who have sufficient brand strength to do some damage in non-advised sales, but even if they did they won’t go anywhere near face-to-face advice.
A story is far more relevant for small businesses. Ask your clients.