Planet Client | Branding seen as ‘luxury’ by SMEs

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IN the second of 3 posts today on the topic of recession branding for small to medium sized enterprises (SMEs), we discover why they so often fight shy of addressing branding issues.

CONVERSE with SMEs about above- and below the line marketing and you’re talking their language, but mention brand proposition and brand positioning, and many SMEs get a nose bleed.

Why should this be?

Shel Perkins, president of Shel Perkins & Associates – a consultancy that works with design firms to improve performance and navigate change – may have the answer.

“In general, small businesses have smaller budgets, shorter time horizons, and a more limited understanding of marketing principles,” Perkins says. “Many small-business owners are stuck in reactive mode and are interested only in buying a specific deliverable rather than broader strategic design advice.”

He also stresses that design agencies must appreciate how SMEs differ from large, often multinational, organizations that are accustomed to drawing upon design expertise.

Design is seen as a luxury by SMEs, not a necessity
Perkins says: “Any significant expenditure on design seems to SMEs like a luxury they can't afford. The other difference is that SMEs are typically trying to build their brand, and so they think first of more direct methods, such as advertising or direct marketing. They are comfortable with those expenditures because the results are more trackable.

“Large expenditures on design are viewed [by SMEs] as nice to be able to do, but a bit softer on results. The larger companies are, of course, preserving market share and honouring the existing brand.”

One UK designer has taken the problem of connecting designers with SMEs into her own hands.

Amanda Tatham runs Tatham Design, a UK consultancy. Since January 2006 Tatham has been organizing breakfasts, at which business experts address design practitioners. Working successfully with SMEs is a recurring theme.

“Designers need to start thinking in terms of generating sales for SMEs,” says Tatham. “They need to help SMEs increase cash flow, attract talent, and add to their bottom line.”

Tatham agrees that offering SMEs strategic advice is one key to success, but she goes further, suggesting that we may also need to reassess the way we do business.

“Entrepreneurial designers are innovators and really important consultants for client businesses. A small design company might look at the heart of a client’s business and really use their innovation, which so many SMEs lack, to help a client company grow. Instead of a fee, they might look to be paid in shares.”