How can branding differentiate Services Delivery – and encourage business and profits?

A Look at how BPO providers are leveraging their brands for better effect

The outsourcing industry has become highly competitive, with new entrants constantly emerging. It has also become highly commoditized. Purchase decisions are predominantly driven by price, recently fueled by pressures of the struggling global economy. Branding, which is often overlooked in the outsourcing industry, is a very helpful tool to break through the clutter and elevate a company away from commodity price comparisons. In addition, a strong brand can help secure new customers, grow the business franchise, and improve margins.

Buyers of outsourced services today expect more than tactical support and inexpensive labor. Today, companies look at outsourcing as a strategic imperative to grow on a national and global scale. So providers must address the customer’s needs in unique new ways. Said another way, a strong "brand" can help communicate a unique value-added aspect of a business and generate great interest.

Outsourcing has grown rapidly over the past decade and continues on an upward trajectory. HfS research estimates that the total market size will exceed $950 billion in 2013. Traditionalists break it down between IT Services and general BPO services. The sheer scale has attracted many providers who claim anything and everything, muddying the waters for the legitimate companies that provide excellent solutions for their customers. The result is a complex melting pot of companies providing off-shoring, in-shoring and even rural-shoring. And because the traditional markets that have historically provided very inexpensive labor are changing, there is the added pressure for buyers to understand the implications, and find value-added partners to deliver services in new and different ways.

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Further, in the recent HfS study, every industry sector expects to increase the scope of their outsourcing activities to some degree (see the red bar below), so there is very little letup to date. This of course will attract new entrants to the market and create additional pressure for existing players. This highly competitive arena means that companies in each sector must drive differentiation through their brands in order to stand out and be seen.

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How Brands Can Differentiate and Strengthen a Company

The challenge is to understand how to best optimize and use the brand asset to expand existing customer contracts, secure new customers, and grow business portfolios. If done correctly, a brand can help a company in many ways. A strong brand can:

• Communicate meaningful differentiation and the value a company provides. Most customers do not understand the differences between outsourcing providers. This often leads to making decisions based on price. Strong brand programs drive towards differentiating ideas so that the marketplace understands how a company is different, what value it provides, and the benefits of partnering with them over others.

• Get a company invited to the party more often. Strong brands build momentum over time, and insure a company is in the consideration set so that it gets invited to solicit business. During the selling process, it is up to the provider to make the case about why to choose them over others. But a strong brand is an awareness tool and a door-opener to "tell me more". There are many innovative brand tactics that will gain the attention of prospects in new ways, not the least of which is social media. But the key is to have a compelling brand to drive sales and marketing initiatives so that more potential customers are aware of your organization.

• Activate "brand architecture" to help prospects more easily understand business services. One of the most common communications problems is that outsourcing companies do not make it easy for business prospects to understand what they do. Most commonly, they speak inwardly about their business and assume that anyone visiting their website or receiving marketing collateral will immediately understand what they do. In fact, the most beneficial thing that a strong brand program can do is drive an "outside-in" perspective so that anyone looking at a provider can easily find what they need to know and how to engage.

• Make the brand a cornerstone of customer relationship-building. The customer relationship is the essential interface that builds or erodes business. Beyond the functional deliverables, it is the character, style and substance of the relationship that results in business building. When done correctly, the nature of that relationship should consistently reflect and amplify the brand idea so that customers have a seamless experience that is unique and true.

• Attract and inspire potential candidates for employment. It is very difficult to find good talent, especially in the outsourcing industry. And as projects become multi-layered, global and value-focused, attracting the right talent around the world has become a critical element to being successful. A strong brand has the potential to excite job candidates and elevate your company from others that the applicant might be considering. So extending the brand idea into recruitment efforts and collateral can have a big payoff in the long term.

• Position the business for investors. Whether privately owned or publically funded, a strongly branded business can help investors and analysts understand it better, and give it maximum attention. This will also help attract the necessary financial resources.

How to Shape a Unique and Compelling Brand

Outsourcing company brands are different than product brands because their value spans a wide range of both tangible and intangible benefits. Understanding this is key to shaping a powerful and compelling brand that customers pay attention to and employees are attracted to. It requires a process that can sort through key information efficiently and intelligently, and determine a strong marketplace positioning as well as a compelling brand idea to drive communications and behaviors. The process includes:

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Mining the core DNA and culture of the company. Unlike decades ago when a company could shout something and customers would line up, today strong brands have to be built upon the foundation of a company’s culture and DNA to have any resonance at all. Every organization has an internal ethos that guides decision-making, service philosophy, and general behavior. The most important starting point in building a brand is to uncover this unique character, and build it into the final brand idea.

Analyzing the marketplaceto see how key competitors are positioning themselves. Times change and so do the market positions your competitors take. These positions are based on what their research tells them is appropriate, and also what products and services they deliver. In order for a provider to stand out and stand apart, it is important to map out the positions staked out by current competitors, and the degree to which they "own" those positions. Strong brands always stand apart form their nearest competitors.

Isolating what is on the mind of both prospective and existing customers so that they will "see" your company above others and want to engage. One of the most difficult tasks is to try to understand what your customers and prospects want to "hear". It is often very different from the functional products and services you provide. Strong brands understand this important distinction, and organize communications from the outside-in.

Crafting a compelling brand ideathat is the cornerstone of all communications and behaviors. Once a strong market position is isolated, it is imperative to create a unique and interesting expression that captures the minds of prospects. This is the domain of skilled branders, to create short and clear expressions that telegraph an idea so interesting that all key audiences get it immediately. Generally, companies are using generic words as tag lines or primary marketing messages that almost any company could employ. Below are some taglines and messages used by out-sourcing companies today. While some are interesting claims, they are not particularly unique and many are generic. Said another way… many companies could use these expressions, and therefore they are weak:

These types of generic messages create a real opportunity for an outsourcing company to focus on what makes it special, and then find a compelling expression embodied in a short number of words that can be used as a primary marketing beacon. Strong marketers find different ways to express the underlying idea so it telegraphs a lot about the organization and does much of the heavy lifting to create understanding and engagement. These building blocks converge to create a unique and appealing brand in the marketplace that resonates and excites.

Shaping a strong brand can deliver growth and sustain business. Investing in strategic brand development will, in the end, result in a clear and distinctive brand that is differentiated in the marketplace, will attract the best customers and ultimately grow the business franchise.

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