How can I increase the value of my manufacturing business?

03 January 2019

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In the process-driven world of manufacturing and engineering, the company brand is often an afterthought – something you need to have, but probably only so delivery drivers can find your unit on the industrial estate.

A surprising number of businesses take exactly this view, but doing so is a fundamental mistake and it presents a gilt-edged opportunity to any business owner who might be brave enough to take a journey down the rabbit hole of value creation.

Defining your added value

Your Brand is the outward manifestation of the value delivered within your business. The key word here is value, NOT product, service or solution. Yes, value is delivered through the end product and services you deliver, but that is not the only source of value. Great value takes many forms.

It can be the care and attention you put into packaging your products so they can travel 4000 miles in pristine condition; the politeness of your logistics team when they arrive at goods in and how they always inspect every carton for damage whilst unloading, then ring your team on the customers behalf to immediately order any replacements; the way your site engineers use a portable hoover to clear up their mess after working at a customers’ site and the box of miniature heroes they leave in the maintenance office to apologise for the inconvenience (even when they didn’t cause any).

All of these individual examples constitute elements of value. It doesn’t matter so much what form this value takes. All that matters is that they are genuine expressions of the values that dictate how and why you do what you do. It is the combination of all your elements of value that establishes your actual (internal) value to the marketplace.

Unfortunately, you cannot explain the actual value you deliver to everyone individually. A customer will almost certainly appreciate your actual value when they are already engaged with your company, but how do you explain to someone you have never dealt with that what you do is better, more appropriate, and worth paying more for than your competitors down the road? This is where your brand comes in.

Brands convey value

A brand design exercise is the act of aligning the value delivered by your business with the value sought by your customers. It achieves this through a rich visual language (combinations of colours, fonts, logos, images, patterns, photos, words…) that controls the perceived (external) value of your business.

Estimates are that 30-50% of the brain’s entire processing power is dedicated to vision. This means vision matters. A lot. Because of this, the way you present your business through your brand also matters. A lot. If your brand isn’t sending the right visual signals, then you are undermining the true value of your business and likely imposing false limits on how much customers are willing to pay for your goods.

A great brand identity is an incredibly powerful tool. It should help your customers to understand why you are different, why they should buy from you and compel them to find out more. The quality of the brand controls the perception of value and therefore the market price of your services.

Don’t believe that that is the case? Imagine taking all the recognisable branding off an iPhone (box and all), replacing it with some branding you’ve got from Microsoft clipart, put it in a jiffy bag at the end of a supermarket checkout aisle and ask yourself if you would be willing to pay the same price as a normal iPhone purchased in an Apple Store, or via the Apple website? I think most people would be very sceptical because it would no longer look right. Even though the phone itself is the same and still a great product, the value simply wouldn’t be visible from the outside.

It is the quality and investment made in the Apple brand that enables them to charge premium prices and maintain such high profit margins. The same principle applies to your manufacturing business. If potential customers cannot see the value from the outside, they will never be willing to pay a premium for it. Worse still, they may not even bother to contact you in the first place.

So, if you want to increase the value of your business, start by developing meaningful actual value for your customers, then make sure you use your brand to ensure the perception of that value is clear for all to see. If you do that, then you will have maximum control over the prices you are able to charge.

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