develop your enterprise with zero promoting finances
Originally written by Jaclyn Crocker on Small Business
Since the explosion of social media at the beginning of this century, brands have become increasingly reliant on digital advertising strategies to drive growth. This has inevitably resulted in bigger brands with a bigger advertising budget having an unfair advantage over smaller companies with less cash to burn.
But the tide is turning.
According to a report by internet trend expert, Mary Meeker, cost-per-acquisition has increased by 50 per cent over the last three years alone and is certain to outpace the lifetime value of a customer for many brands in the years ahead. In addition, a new generation of customers is emerging who are far more sceptical than their predecessors and therefore much less receptive to traditional methods of customer acquisition (think social advertising and influencer promotions). Instead, they are looking for more meaning and purpose from the brands they buy from – trust and authenticity have overtaken the need for cut prices and convenience.
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And the last year has only accelerated this shift. Businesses that have relied too heavily on a big advertising budget to fuel their growth have inevitably suffered. That’s because when the pandemic hit, budgets were slashed and sales effectively fell off a cliff. However, those brands that had been able to build up a loyal community of fans have been able to survive, and in some cases thrive, through the pandemic.
Lululemon is a great example of this. The billion-dollar global athletic apparel company grew with zero advertising budget, instead trusting its customers and wider network of advocates (e.g. fitness instructors, employees, in store associates etc) to drive growth for them. As a community-focused brand, its customers believe in the company’s vision, share in its purpose, and are very quick to share stories, convince their friends and family to buy their products and argue in defence of the brand when required. It’s no surprise that lululemon has not only survived 2020, but demonstrated significant year-on-year growth.
The most successful brands of today (and tomorrow) are those that can use their own communities to propel growth in the same way lululemon has been able to. The best way to grow your business this year and beyond will be to build a powerful community around your brand, thereby creating the perfect environment to drive word-of-mouth-based growth.
For businesses looking to create strong communities and grow organically in this way, here are three key principles to follow:
#1 – Stand for something
Today’s consumers are much more motivated by what a brand stands for than the price of their products. According to research from Forrester, millennials and Gen Z in particular are looking for more meaning and purpose from the brands they buy from. This is why many companies are now building the core of their brand on purpose.
For example, sustainable nappy brand, Kit & Kin, is built entirely on the principle of preserving the planet’s natural resources. It is committed to using exclusively eco-friendly materials in all of its products and has partnered with the World Land Trust to raise awareness of rainforest conservation and to help save and protect threatened habitats around the world. As a result of its ethos, Kit & Kin has built an extremely loyal following of customers which is in turn leading to impressive growth. But the key thing to remember is that growth was never the sole purpose.
Many brands just like Kit & Kin are succeeding by committing to a purpose and then communicating this with their customers. And you don’t need to be a household name to do this. By creating an emotional connection between your customer and your product or service, you will increase customer loyalty.
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#2 – Be authentic and educate
Once you have committed to a purpose, you must live up to it in everything you do and help your customers understand it.
Human beings are natural storytellers. If you equip them with a strong, powerful story that they can get behind, the likelihood of them telling their friends, family and networks is high. You can engineer your brand to equip your customers with a purpose-led story that they will be proud to share, ultimately propelling word-of-mouth growth.
But this is only possible by being authentic and transparent in your communication which builds up real trust with your customers. Today’s consumers are quick to trust brands that are honest with them and prove they are staying true to their values and to their purpose. They are also just as quick to drop a brand that falls short.
Brands such as Patagonia and Tesla understand this and have experienced long-term success due to their ability to express their values and communicate authentically, while operating in a way that has a positive impact on the world. But again, this is not limited to big companies. Each one of them started small and has been able to grow largely because of their ability to empower a community around them.
#3 – Focus on driving brand advocacy
According to research from Nielsen, 84 per cent of us are likely to trust a referral or brand recommendation if it comes from a friend. That’s why the concept of brand advocacy, any behaviour that involves a customer supporting or recommending a brand they love, is now more important than ever. And while brand advocates have always existed under different guises – superfans, ambassadors, enthusiasts, evangelists etc – the concept of developing a strategy that nurtures relationships with every advocate and celebrates their advocacy in order to drive company growth is a new one.
Identify who those advocates are and then develop a strategy for rewarding their loyalty. It could be the creation of an exclusive loyalty club for top customers or specific perks, benefits and exclusive sales for completing certain activities that support your brand. The important thing is, you are rewarding your most loyal fans and facilitating the growth of your community in the process. It is only by really driving brand advocacy at the core of your business, that you can expect to achieve any level of organic, long-term growth.
If you are looking to launch or grow your brand this year, then don’t be fooled into thinking you must invest heavily in advertising to do so.
The most successful brands of this decade and those to come in the future are those that don’t rely on short term marketing practices and an advertising budget requiring a large injection of cash, but instead focus on growing and nurturing a community of advocates who represent, promote and shout about their brand. This approach can be applied to any brand, large or small, across any sector, and will be fundamental to your success in the long term.
Jaclyn Crocker is lead brand and community consultant at Duel
Further reading on advertising budget
Should I reduce my marketing budget due to coronavirus?
How to grow your business with zero advertising budget