What's A Good Brand For Your Asset
CHOOSING THE RIGHT BRAND FOR YOUR ASSET
Most BRANDS, usually comes together with the signing of a long-term contract, like franchise, management, or marketing, so very often the focus and choice are based on the conditions of the contract (price, duration, cancellation clause, etc…) and not the deliverables. By deliverables, I mean what the brand brings to the asset. What you pay only makes sense when you compare it to what you get. So, what do you get, or should you get?
In this “get” calculation, we have these variables: recognition, market, image, and guests. Please note, that I do not mention one word about the contract conditions, at this point. So, what do these variables mean for the asset?
• The Recognition: Firstly, the brand should save time for the asset owner, i.e., by signing up to this brand, I get immediate recognition and don’t have to spend time and money on building it.
• The Market: Secondly, the brand should drive market share to my property, and it should drive more than if I don’t sign up to that brand.
• The Image: Thirdly, I do not need to explain who and what we are, because the guests, already have a relationship with the brand and immediately understands what we’re about. This image should allow us to charge more than a non-branded version and/or, at the very least, put us on top of the choice list.
• The Guests: Fourthly, the brand must be perceived by the guest to have value. This guest value identifies with their lifestyles and what’s important to them, and can be represented by both tangible (design,…), as well as, intangible (shared values,…) features.
In other words, the BRAND should have a Brand Value Proposition and Brand Equity:
• A brand value proposition clearly states what a company's product or services OFFERS to customers. The brand value proposition is a commitment made to target customers that includes a REASON, as to why consumers should buy into the brand products or services.
• Brand equity refers to the brand's ability to CAPTURE customer attention and preference.
Examples of Brand Value Propositions:
• Hilton: To fill the earth with the light and warmth of hospitality, by delivering exceptional experiences – every hotel, every guest, every time. Or, Above all, Hilton seeks to build loyalty among its customers by aiming to delight them and anticipating their ever-changing desires while ensuring that team members, who are essential contributors to meeting this objective, are also satisfied (and ultimately loyal).
• Marriott: “To enhance the lives of our customers by creating and enabling unsurpassed vacation and leisure experience.”. Or, Creating Life's Unforgettable Moments - They are conceived by local heroes for the purpose of creating Original Experiences that provide lasting memories.
• Ritz Carlton: "We are Ladies and Gentlemen serving Ladies and Gentlemen.". Or, The Ritz-Carlton is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience.
My aim here, is not to promote brands, but to highlight the importance of BRAND VALUE PROPOSITION and BRAND EQUITY when you choose it for your asset. In this way, we can “simplify” it down to two central questions: Does the brand’s value proposition suit your asset and does the brand have brand equity in your market?
Sounds simple? Reality is of course not simple, as we all know. So, what make’s it difficult and what to do about it?
Too much choice! Some chains have 20+ brands and there are many chains with different brands, making the choice even bigger. The brand owners will recommend and explain, but remember, the guests are everything! The key is knowing who your customers are and that the value proposition suits them. Secondly, check their other brand location’s guests, is this a match to your guests? Thirdly, ask your marketing persona (yes, real people), if they have ever heard of the brand? If not, all red lights should start blinking. Branding is marketing, so the brand must fit you marketing persona(s) and be known by them.
Asset types and locations, usually fit certain brands (because their made for them). An example could be historical buildings in high end city center locations matching historical brands with high end clients. This does not mean that you cannot play with contrasting brands and break the rules. However, you should probably try not to break the asset and guest levels, i.e., have a product/brand that fits the location and its pricing level. Or, alternatively, have some brand/product features that allow you to drive profit, even if you’re out of the level. An example could be, a Citizen M, with smaller rooms and high end “omphh”, square meter price is still high, even if the room price is lower than competitors, etc…
Highly branded markets with lots of brands present. This probably means that you DO need a brand. However, if your asset suits a Radisson Blu and there’s already five of them in the location. Can they handle and fill one more? Maybe, better to go for a similar, but competing brand with less presence. Or, go into a narrower “niche” market. However, it means that you need to be very sure of your “source markets (where your business is coming from)” and “marketing personas”. Brands are not equally known everywhere, so you need to choose a brand that is known in your source markets.
Regional locations with no brand presence, ahh, now that’s interesting! On the one side, a brand will set you apart, but will it drive traffic? Driving market share is the key concern. In general (without making it a definite rule), brands will be stronger in capitals and key cities/destinations (it’s their focus, of course). Even if the brand does not drive market share here, it may still drive more revenue since you have the image and can charge more. There are two concerns here: Can the market, potentially handle a more expensive product? Or, in the very least, does your asset with the brand fill a real need in the market, i.e., better mid-market product at the same pricing level that drives market share away from the competition. Concerning the brand driving traffic to this location? Focus on the demand generators in the location, is there something at this location that the brands key guest types might be interested in, if yes, then the brand should be able to drive traffic, if not, go back to the first question.
Local or “Closed” locations, visited by local travelers only and little foreign/outside traffic. This could be like the previous section. However, move with caution since locally branded assets are likely to work better.
Vested interests! Most brand owners have targets and own agendas, i.e., we want this brand here. If it matches your asset and guests, go for it, otherwise NOT! Just make sure, they give you a sweet deal since you’re also solving their challenges, at the same time.
And now, please do go back to the contract conditions and make sure you get the best deal possible!
