In a recent post, I pointed out that a brand (and it’s ability to drive buying behavior) is mostly based upon the customer’s experience product rather than the marketing activities surrounding it.

Predictably, a number of readers – most of whom appear to work in marketing -- countered by citing the handful of huge consumer companies that have highly-recognizable brand names.  The implication, of course, is that smaller firms should be spending money on branding and marketing, in the hopes of replicating the success of these huge firms. That’s the same kind of thinking that often touted in business schools, where case studies tend to look at large firms.

The problem with this is that the “best practices” of large firms trivializes the differences between small firms and large ones. 

Such advice also tends to ignore the fact that today’s market conditions and business environment have changed radically since the days that, say..., Apple grew so huge or when Coke became a household brand name (which was over a hundred years ago).

The truth is that small businesses can learn very little from studying the behavior of big companies and established brands, because the rules under which such business operate are simply not applicable to smaller firms.

Large enterprises, regardless of industry, tend to be similar in terms of corporate structure  (hierarchical) and fiduciary structure (public ownership) and tend to have nearly identical marketing and sales models.

For example, there is very little difference, in terms of marketing activity, between Toyota and General Motors and Volkswagen.  In these environments, “branding” plays a role in differentiating between products that are, in fact, extremely similar.

Smaller firms face a very different problem when it comes to differentiation.  If a small business has a commodity offering that’s like everyone else’s it’s impossible for them to compete on the basis of brand.  Creating differentiation through advertising, marketing materials, and so forth (i.e. “branding”) is simply competing on the home turf of larger companies, which have deeper pockets.

I’ve frequently received emails from the owners or heads of sales of small and medium-sized companies asking questions like “should we be thinking about advertising on television?” – as if they’re somehow going to be able to break through the noise and compete against Apple or Coke.

I always tell them that such “branding” activities are a mistake because it will leach capital that would be better spent elsewhere.

The only effective way for a smaller firm to differentiate itself is by offering something that the larger firms can’t (or won’t) offer: like a unique product or more personalized service. 

In short, for a small firm, customer loyalty and a growing customer base isn’t going to emerge from “branding.”  It’s going to emerge from the quality of the product, how easy you make it for the customer to buy that product, and how pleased the customer is with that product. 

That is what is going to create your “brand.”  Not the “branding” junk that big companies use to differentiate between them and their just-as-huge competitors.

Does this mean you don’t need a decent company name and an attractive logo?  Of course not.  That’s part of being in business.  But setting up these basic elements of “branding”, in a small firm, should be a matter of a couple of days of work, not a major investment.

That’s why I strongly recommend that small business owners reject the blandishments of marketing and branding consultants.  It’s the wrong medicine at the wrong time in the wrong situation.