Overview

Word of mouth heavily influences 20-50% of purchasing decisions, but surprisingly, only about 7% of it occurs online, as per research by the Keller Fay Group.

To make things popular, you need virality. This article breaks down the concept and guides you on achieving virality using Jonah Berger’s six key elements (STEPPS) from his book “Contagious – Why Things Catch On“: Social Currency, Triggers, Emotion, Public, Practical Value, and Stories.

What is virality?

Virality is how fast and far something, like a message or content, spreads among people, often through word of mouth, social media, or online platforms. When something goes viral, it grabs much attention, and many people share it fast.

Knowing virality is crucial for marketers, content creators, and anyone aiming to reach a big audience with their message or product. Yet, predicting what will go viral is challenging since it hinges on unpredictable factors.

How does virality benefit your business?

Saves cost in marketing

Creating viral content means your ideas get shared without spending much on ads. It usually spreads through social media, word of mouth, and online platforms.

Viral content often prompts user-generated content, which about 85% of consumers find more influential than brand visuals. You can save money on marketing by gaining visibility and organic following without paid promotions.

Have greater reach

Creating viral content can quickly connect with a vast audience. When your audience shares this content, it expands beyond your initial target, helping you reach new markets and demographics not easily reached through traditional marketing.

This extensive reach is crucial for boosting brand exposure and increasing sales. Simplifying the sharing process, such as adding social media buttons or providing easy-to-copy links on your website, encourages more people to spread your message.

Increases brand awareness

Viral content grabs much attention, boosting how well people know your brand. People sharing and interacting with your content get to know your brand and its offerings.

More exposure helps people remember your products or services when deciding what to buy. Going viral also builds a positive image for your brand, making your business stand out as trustworthy and well-known.

Higher engagement and interactions

When content goes viral, it brings people who share an interest in or connection to the brand. Virality sparks conversations and interactions on social media and in person, fostering customer loyalty and a sense of community.

Active involvement leads to a more dedicated customer base. In fact, 73% of companies rely more on existing customers than exploring new markets.

Provides social proof for customers

The more your content goes viral, the more it shows potential customers that your brand is worth noticing. When people see others sharing and interacting with your content, it builds credibility and authenticity.

This social proof boosts consumer trust and buying choices. A better brand reputation can attract customers to choose your products/services over competitors.

Six principles that causes virality

Jonah Berger discovered six fundamental principles that often make messages, products, and ideas spread widely. These are the STEPPS principles:

• Social Currency: People share to boost their image or status.

• Triggers: Content linked to everyday stimuli triggers recall and sharing.

• Emotion: Positive or negative high-arousal emotions drive content sharing.

• Public: Visible actions encourage imitation and sharing.

• Practical Value: Useful information increases sharing as people believe it benefits others.

• Stories: Narratives provide a compelling structure that enhances content memorability and shareability.

Achieving virality for your brand

1. Make it shareable and exclusive

Create shareable and exclusive content to boost your brand’s virality. Introduce limited-time promotions or exclusive sneak peeks to create urgency and motivate users to share for exclusivity.

Leverage social media and offer incentives like discounts or special access to amplify content sharing. Find the sweet spot between shareability and exclusivity to ensure your content spreads while maintaining a coveted user experience.

2. Associate it with daily cues

To seamlessly integrate your brand into your audience’s daily life, align your content with their habits and interests. Identify their regular activities and craft content that effortlessly blends into their routines.

Enhance your brand’s connection by producing timely, relevant content that ties your messages to current discussions or events. This integration into your audience’s daily routine strengthens the bond with them

3. Evoke emotional responses

Intense emotions, whether good or bad, push people to take action. While positive news tends to be shared more, articles that make readers angry or anxious get passed around.

Understand what emotions resonate with your audience and adjust your content strategy accordingly. Creating emotional ties helps your brand stick in people’s minds, encouraging them to share their emotional stories with others.

4. Design for visibility

Since most people process 90% of information visually and 65% are visual learners, the appearance of your content is essential for grabbing attention and making it go viral. 

Create content that looks great, is easy to understand, and can be shared on different platforms. Use your brand’s imagery consistently to build a recognizable look that engages with people wherever they are. 

5. Provide utility

Create content that solves problems, fulfills needs, or shares valuable information. Whether it’s guides, videos, or tips, valuable content establishes your brand as an authority.

Know your audience’s problems and challenges to tailor your content for them. Consistently providing value makes your brand a go-to resource, building loyalty and prompting users to share positive experiences.

6. Create compelling narratives

Create captivating stories to grab your audience’s attention and make your brand go viral. Develop a narrative that ties together your brand’s history, customer experiences, or related content pieces. 

Make your content share-worthy by creating episodic stories that keep users returning for more. Encourage user engagement with interactive elements or content that invites them to be part of the narrative.

Best practices for achieving virality

Understand your audience well

Conduct in-depth research to discover your audience’s preferences, behaviors, and preferred communication channels. Understand what appeals to them, identify their pain points, and recognize valuable content.

Failure to comprehend your audience may lead to a misalignment between your brand message and your audience’s values. Ensure your content resonates with your audience to avoid this mismatch and effectively communicate your brand message.

Be consistent in your branding

Consistency in your brand is vital for trust and recognition, with Lucidpress stating it can boost revenue by 10-20%. This involves keeping visual elements, tone, and messaging consistent across all platforms.

A consistent brand builds a clear and memorable identity, helping your audience easily recognize and share your content. Conversely, inconsistency can erode trust and impede your brand’s viral potential.

Be authentic

Authenticity matters to 88% of consumers when choosing brands. People are more likely to share content that feels real and relatable.

Avoid deceptive tactics like exaggerating product benefits or pretending to support a cause without genuine commitment. Inauthenticity can harm a brand’s credibility, leading to negative reviews, decreased loyalty, and reduced chances of virality.

Diversify your content

Diversify your content strategy to reach more people. Use a mix of images, videos, blogs, and interactive content because everyone likes different things. 

Experiment with various topics and styles to find what your audience likes best. If you don’t vary the content, your audience may lose interest, resulting in less sharing.

Measure your performance

Regularly check how well your content is doing by looking at engagement, shares, and conversions. Learn from what works and improve your strategy for creating content that gets shared more.

Consider using software like an ERP that centralizes data from different departments; this can be incredibly useful for marketing teams to analyze customer behavior, track trends, and find opportunities for brand promotion.

Ensure relevance to current trends

Stay updated with trends and include them in your content strategy to keep your brand visible and relatable. Watch for industry trends, popular hashtags, and cultural happenings for timely and relevant content opportunities.

Ignoring trends can make your brand seem outdated, reducing your content’s shareability and viral potential. Stay relevant to avoid appearing out of touch with your audience.

Analysis of successful viral marketing strategies

Apple

In 2015, Apple’s ‘Shot on iPhone’ campaign showcased the superior camera quality, creating a buzz on social media and sparking a content creation trend. The campaign’s success, fueled by memes, positioned Apple as the top choice for camera enthusiasts, highlighting its innovative approach to brand presence and product quality.

Here’s an analysis of its virality using the STEPPS principles:

• Social Currency: Users flaunt their iPhone photography skills on social media, creating an exclusive community that values and shares high-quality content.

• Triggers: The phrase “Shot on iPhone” is a consistent trigger, linking users’ photographic experiences with the iPhone. 

• Emotion: The content draws viewers to share content that evokes joy, awe, or nostalgia, creating a ripple effect of emotional sharing within their social networks.

• Public: Apple’s campaign makes the content public by showcasing user-generated content on billboards, in-store displays, and online platforms. 

• Practical Value: The “Shot on iPhone” campaign goes beyond aesthetics, providing practical value by showcasing the iPhone’s camera capabilities. 

• Stories: By sharing their photos, users contribute personal stories and experiences, weaving into the narrative of the “Shot on iPhone” campaign.

ALS Association

The ALS Ice Bucket Challenge became a worldwide viral sensation to boost awareness and funds for ALS research. Celebrities like Bill Gates and Oprah Winfrey joined in, pouring ice water on themselves and raising over $220 million, with a lasting 25% increase in contributions even after the campaign concluded.

Here’s an analysis of its virality using the STEPPS principles:

• Social Currency: Sharing challenge videos showed participants they are part of a social cause and a charitable and trendy movement.

• Triggers: The challenge nominated others, creating a cycle of participation. Social pressure and the desire to be part of the movement triggered people to join.

• Emotion: The challenge evoked strong emotions with the cold water shock and the cause of raising awareness for ALS patients. Emotions ranged from surprise and laughter to empathy and a sense of doing something meaningful.

• Public: The challenge’s public nature was crucial. Sharing videos on social media made contributions visible, encouraging others to join in and expanding the campaign’s reach.

• Practical Value: The challenge focused on ALS awareness and funds and provided practical value in simplicity and accessibility. Pouring a bucket of ice water made participation easy for a broad audience.

• Stories: Personal narratives, successful fundraising stories, and the impact of ALS research humanized the cause, motivating more people to participate.

Conclusion

The STEPPS framework is a thorough guide for grasping and utilizing the components that drive the contagious spread of ideas. Yet, predicting virality proves challenging due to numerous unpredictable factors.

Although software like ERP systems and CRM can provide valuable insights by centralizing data, it’s crucial to understand that the core of virality is authenticity. Trying to force content to go viral might bring short-term gains, but a lasting and organic message spread requires a genuine connection with the audience.

References

Berger, J. (2016). Contagious: Why Things Catch On. Simon and Schuster.

Overview

Traditional branding uses old marketing methods to build a strong brand image by highlighting company values, mission, and unique selling points. However, here’s the truth: customers are more interested in their stories than yours.

Create a strong brand using Donald Miller’s StoryBrand Framework by putting your customers at the center. Develop a buyer persona to connect emotionally with your target audience, uncover their needs, and effectively communicate why your product or service is meaningful to them.

Understanding the StoryBrand Framework

The StoryBrand Framework is all about storytelling and how it naturally captivates people. According to Donald Miller, businesses should guide the customer’s story, with the customer as the hero. The framework has seven key elements:

1. Character: Identify the customer as the hero and position the business as the guide.
2. Problem: Clearly define the problem that the customer is facing.
3. Guide: Present the business as the guide who can help the customer overcome the problem.
4. Plan: Outline a simple plan or solution that the business provides.
5. Call to Action: Clearly state what steps the customer needs to take.
6. Success Story: Share examples of others who have successfully used the product or service.
7. Stakes Section: Communicate potential negative consequences if the customer doesn’t take action.

The StoryBrand Framework aims to create a clear and compelling narrative that resonates with customers, making it easy for them to understand the value and take action. Businesses can improve communication and marketing effectiveness by simplifying the message and focusing on the customer’s journey.

What is a buyer persona?

A buyer persona is like a detailed profile of your perfect customer, created from actual data and market research. It shows background, behavior, preferences, pain points, and more, helping businesses target and understand their audience in marketing and sales.

Here are some standard components found in a buyer persona:

Background

This part closely examines the buyer’s personal and professional details, like their job title, industry, company size, and location. Knowing their background helps customize marketing and products to match the buyer’s needs.

Identifiers

Identifiers are characteristics that help us identify a buyer quickly. There are three types:

• Demographic: Includes age, gender, education level, and income.
• Psychographic: Looks at interests, values, and lifestyle choices.
• Behavioral: Studies decision-making patterns and interactions with products or services.

Pain points

Pain points are the issues and frustrations buyers face. Recognizing these challenges is essential for creating effective marketing messages and product solutions. 

This understanding enables you to empathize with customers, highlight the value of your offerings, and position your brand as a problem solver. You can address these pain points directly and develop targeted solutions that meet the buyer’s needs.

The importance of buyer persona in branding

Helps you understand your audience better

Buyer personas give detailed information about your customers, what they do, and what they like. With this knowledge, you can create an effective marketing strategy that connects with your audience’s needs and preferences.

Recognizing and remembering your customers pays off. According to Accenture, 91% of consumers are more inclined to buy from brands that offer relevant offers and recommendations.

Clarifies your brand message

Companies often confuse customers by using different visuals and messages across platforms. Confusion can lead to missed opportunities for gaining new customers and growth and reduced loyalty.

Craft a brand message that directly addresses the concerns and aspirations of your target audience by using a buyer persona. It ensures your brand communication is relatable, emotionally appealing, and relevant.

Helps you be consistent across all channels

Consistent branding is vital for business success. It boosts revenue growth for two-thirds of companies, with those maintaining consistency being 3.5 times more visible than those with an inconsistent brand.

Using a buyer persona helps unify your brand across different marketing channels. It ensures that your messaging, visuals, and tone align seamlessly, creating a solid and cohesive brand identity for your diverse audience.

Be cost-effective on marketing efforts

Creating buyer personas is crucial for intelligent marketing. It helps you use your marketing budget wisely by concentrating on the customers that matter most. 

Doing this saves time and effort, ensures your messages hit the right people, and boosts your marketing return on investment.

Creating a buyer persona

1. Identify your target audience

In the StoryBrand Framework, customers are the heroes of their own stories. To create a buyer persona, identify your target audience by understanding their demographics, psychographics, and behaviors.

For detailed insights, conduct market research and surveys and analyze customer data to gather relevant information.

2. Determine their pain points

Identify your customer’s exact problem – what they struggle with daily. Pain points are critical because it lays the groundwork for your brand to offer a solution. 

Highlight the specific challenges and annoyances your target customer goes through, building a relatable link between them and your brand.

3. Define the transformation

Outline how your product makes a positive impact on people’s lives. Envision the change they’ll go through — from their current situation to their desired state. 

This transformation is at the heart of your product’s delivery, aligning with the StoryBrand Framework.

4. Craft a clear message

Craft a clear and engaging message showcasing how your product or service directly solves customer’s pain points, resulting in a positive transformation. Whether making a purchase, trying a trial, or reaching out, use persuasive language to prompt the customer to take that next step.

Keep it simple, skip the jargon, and keep the focus on the customer. Highlight the benefits explicitly and guide them through the process for a seamless experience.

5. Create the persona profile

Create detailed and realistic buyer personas by using the gathered information. Each persona should represent a specific group in your target audience. 

Give your persona a name and a face (using stock photos), and include details about demographics, challenges, preferences, and buying behavior. This step humanizes your audience, making it easier for your team to relate to and understand your customers.

6. Refine and update regularly

Keep your messaging in sync with your customer’s changing needs as the market evolves. Regularly update your personas to reflect your target audience’s ongoing journey and challenges.

Stay on top of industry trends, customer feedback, and market shifts that could affect your audience. This constant refinement ensures that your marketing and branding efforts stay relevant and effective.

Example of a buyer persona

Alex Johnson, Small Business Owner

Background:

Meet Alex Johnson, a 38-year-old entrepreneur who owns the small digital marketing agency “PixelCrafters.” With over a decade of experience in marketing, Alex ventured into entrepreneurship three years ago, offering tailored digital marketing solutions for small and medium-sized businesses aiming to enhance their online visibility.

Identifiers:

• Gender: Male
• Age: 38
• Location: Urban area, Mid-sized city
• Job Title: CEO/Owner, PixelCrafters
• Industry: Digital Marketing

Pain Points:

• Tight Budget: Alex watches his budget closely as a small business owner. He needs cost-effective solutions that give his clients the best results without costing too much.

• Short on Time: Alex is always pressed for time to juggle various roles in his small business. He needs tools and services that are quick to use, easy to set up and require minimal management.

• Technology Challenges: Although Alex knows digital marketing, the fast-paced tech world can be overwhelming. He wants user-friendly solutions that don’t require much learning.

• Getting and Keeping Clients: Alex struggles with getting new clients and keeping the ones he has. He needs strategies and tools that attract new customers and build lasting relationships.

• Proving Value to Clients: To keep clients happy, Alex needs to show the impact of his digital marketing efforts. He’s looking for tools with precise analytics and reporting to demonstrate the return on investment.

How Your Product/Service Addresses Pain Points:

Your product/service is a comprehensive digital marketing toolkit for small businesses like PixelCrafters. It offers:

• Customizable Plans: Get digital marketing tools and services that fit Alex’s budget.

• Easy-to-Use Platform: Our platform is simple and intuitive, requiring minimal training so that Alex can save time and resources.

• Consultation and Support: Access to dedicated customer support and consultation services to assist Alex in setting up and getting the most out of our product.

• Lead Generation and Retention: Use automated email campaigns, social media management, and client engagement analytics to attract and retain customers.

• Measure Success Easily: Detailed analytics help Alex showcase the ROI of his digital marketing efforts, building trust and securing long-term partnerships.

Challenges and solutions of creating a buyer persona

Lack of data

Insufficient data can impede the development of precise buyer personas, leading to broad assumptions. Conduct comprehensive market research, surveys, and data analysis to remedy this. 

Utilize customer feedback, analytics, and social media insights, and explore tools like ERP software to efficiently collect and organize data from various departments like sales, marketing, and customer service, providing a unified view of customer interactions and preferences.

Assumption-based personas

Marketers often make a big mistake by relying on assumptions when creating buyer personas. Simply collecting anecdotes from your customer-facing team isn’t sufficient. 

Without proper validation, these assumptions can result in inaccurate personas that don’t reflect your target audience’s behaviors and preferences. To avoid this, continually validate and refine your buyer personas using real-world customer interactions, sales data, and market feedback. Make adjustments based on actual results and performance metrics.

Ignoring negative personas

Negative buyer personas are profiles that tell you which people are unlikely to become customers. They’re the ones who don’t fit well with your company.

Create these negative personas to weed out leads that probably won’t become customers. It makes your marketing more focused, reaching only those likely to find value in your offer.

Emphasis only on demographics

Don’t just focus on demographic information; it won’t make your personas stand out. You might miss essential psychographic and behavioral factors if you only consider demographics.

Think about your persona’s daily activities, media consumption, challenges, and how they measure success. Base your personas on this information to guide when and how you interact with your audience. 

Having too many personas

Having 4-5 personas is excellent, but having too many can harm your marketing. Personas are about representing different customers and enhancing their experiences based on who they are, what they value, and how they prefer to do business with you.

Group similar segments and prioritize personas based on their impact on your business goals and market potential. Quality matters more than quantity, so focus on the most impactful personas to optimize your marketing strategy.

No collaboration among departments

Many businesses mistakenly think that creating personas is only for marketing. The problem arises when marketing, sales, and customer support don’t collaborate, leading to misaligned buyer personas.

To fix this, apply the persona throughout your entire funnel strategy and ensure everyone in the organization knows who they are dealing with. Foster communication and collaboration between departments to ensure consistent and comprehensive information from various sources.

Conclusion

Businesses build genuine connections by recognizing that customers are more interested in their stories than corporate talk. When you incorporate buyer personas into your marketing, it’s not just a strategy — it’s a dedication to truly understanding and connecting with your target audience.

Crafting a solid buyer persona requires collecting and organizing customer data through research. Using ERP software streamlines this process, automating your efforts for efficiency.

References

Miller, D. (2017). Building a Storybrand: Clarify Your Message So Customers Will Listen. HarperCollins Leadership.

Overview

Today, we’ve shifted from mass production to mass customization, and our choices have multiplied, making us information-rich but time-poor. As a result, the old method of comparing features and benefits no longer suffices.

When a brand is well-known and has a positive image, people are more likely to trust it. However, building a strong brand is not an easy task. Using Marty Neumeier’s five branding disciplines from his book, “The Brand Gap,” this article aims to help you create a successful brand by understanding what a brand is and how to brand your product correctly.

What is a brand?

According to Neumeier, a brand isn’t just a logo or product; it’s how someone feels about a product, service, or company. This feeling is rooted in our emotions and intuition, shaped by individuals rather than companies, markets, or the general public.

Businesses can’t completely control this process; they can only shape it by highlighting what makes their brand special. A brand is like a common idea in society – for example when we think of smartphones, we usually link brands like Apple or Samsung with that type of product.

What is the brand gap?

Brand strategies often fall into two camps: analytical marketers and emotional creatives. This divide, known as the brand gap, is the distance between a company’s brand strategy and creativity.

Bridging this gap results in a charismatic brand, where communication is clear and powerful, quickly reaching people without distortion or confusion. Such brands, highly valued by consumers, often lead their categories with significant market shares and the ability to charge premium prices, making them less likely to be seen as generic products.

Bridging the brand gap

1. Differentiate

When building your brand, ask three key questions: 

• Who are you? 
• What do you do? 
• Why does it matter?

Our brains naturally pay attention to variations in what we see, whether big or small, like light and dark, rough and smooth, or stillness and motion, to make sense of things. Being unique helps your brand grab attention and stand out in information overload.

Modern marketing builds a tribe, shifting focus from product attributes to user experience and personal identity. While features and benefits matter, your sense of self precedes today’s marketing landscape.

2. Collaborate

Brands don’t just appear on their own; they come from the efforts of many people over a long time. Building a brand involves executives, marketers, and experts like strategy consultants, designers, advertisers, researchers, PR professionals, and more.

Here are three basic models for brand collaboration:

Outsource to a one-stop shop

One firm handles most communication. It’s convenient because it keeps the message consistent and makes management more accessible for the client. 

However, the downside is that the different services may not be the best, and the company gives control of the brand to one firm.

Outsource to a brand agency

This model is like a one-stop shop. The agency takes charge of the project and can also act as a contractor, with other firms serving as subcontractors.

This approach has benefits like delivering a consistent message across various media and the flexibility to collaborate with top-notch specialists. However, a downside is that the brand agency holds more control over the brand than the client company.

Using an internal marketing team

Branding is an ongoing effort that a company should manage internally. The company engages directly with them instead of relying on various niche agencies or freelancers.

This approach offers benefits such as maintaining a consistent message across different media, the flexibility to collaborate with specialists, and having internal control over brand knowledge. However, a downside is the need for a robust internal team to operate an integrated marketing approach effectively.

Read more: Retail Advertising: 6 Simple Steps and its Best Practices

3. Innovate

Many ads fail to connect emotionally with readers today, and the issue lies not in brand strategy but in execution — specifically, creativity. Creativity is the elusive element in the branding mix, often described as magic rather than logic, igniting passion in customers.

Creativity isn’t about starting from scratch but approaching things with a fresh perspective. Successful creative thinkers often opt for the “MAYA” principle – choosing the Most Advanced Yet Acceptable option.

Here are ways to be more innovative in your branding:

Know that ideas are scary

Embrace innovation fearlessly by choosing the MAYA option for ongoing progress. Innovative ideas may seem risky or unconventional, challenging the status quo, and might initially feel unsettling.

Disruption is part of the package, introducing new ways of thinking or doing things. Don’t be afraid — true innovation often demands stepping out of comfort zones and embracing uncertainty.

Having a unique name

Customers always look for easy ways to recognize, remember, discuss, and compare brands. A brand’s most valuable asset is often its name, playing a crucial role in standing out and gaining acceptance.

When creating a brand name, keep these seven criteria in mind for success:

• Distinctiveness
• Brevity
• Appropriateness
• Easy to pronounce
• Likability
• Extendability
• Protectability

Use icons and avatars

A brand icon is the name and symbol that show where a brand stands in the market. An avatar icon acts like the brand’s alter ego, able to move or change.

In today’s digital world, branding is more than just putting a logo on things. It’s about keeping up a conversation between the company and its audience across different platforms. Icons and avatars adapt to this by stepping out of traditional print and engaging with people wherever they are.

Attract using packaging

According to a study by POPAI (Point of Buy Advertising International), 76% of purchasing decisions happen in-store. When competing products surround customers, their initial preferences and memories of past ads take a back seat as products vie for their attention.

Customers follow a specific order when processing messages based on the product, and messages presented out of order are often ignored. The usual sequence is as follows:

• Package design catches the customer’s eye.
• The customer wonders, “What is this?” as they check the product name and category.
• They then ask, “Why should I care?” and search for a short message explaining why to buy.
• It sparks an interest, and the customer wants more info to back up the why-to-buy message.
• Finally, the customer is ready for details like features, price, and guarantees to make a decision.

Adequate packaging relies on clear communication, evoking emotions, and maintaining a natural flow when presenting information — principles that are universally applicable to all forms of brand design.

4. Validate

Communication in the olden days was like a one-way street – sender, message, receiver. However, it’s outdated because real communication goes both ways; you need to know how your customers respond.

Transform the monologue into a dialogue by adding a crucial step: feedback. Each round in the feedback loop strengthens and sharpens communication.

Gain feedback on your creative ideas before launching them with these tests:

Swap test

Try replacing a part of your icon, like your name or a picture, with something from a competitor. 

If theirs looks better or just as good, you can improve. If theirs looks worse than yours, then you’re good as you are.

Hand test

Try the hand test as a variation of the swap test to quickly assess the impact of ads, brochures, and web pages. Cover the icon in your marketing material and see if you can identify the creator. 

If you can’t, your communication lacks strength; it should distinctly represent your brand, allowing people to recognize it by its voice, look, and feel.

Concept test

A simple concept test makes developing names, symbols, icons, taglines, and brand promises easier. It focuses on two key things: getting the right idea and getting it right.

To test your concept, make prototypes of the brand element and show them to at least ten people who are not company insiders. Ask them questions like:

• “Which promise matters most to you?”
• “Which company do you link with this promise?”
• “Does it make sense for company X to make this promise?”
• “What other promises would you expect from company X?”

Field test

For the best feedback, test prototypes in real situations. If your prototype is supposed to be in a shop, test it there. If a product is intended for packaging, test it next to similar items in packaging.

When conducting on-field tests, focus on five critical elements of brand expression: 

• Distinctiveness: Does your brand stand out from the rest? 
• Relevance: Is your brand appropriate for your goals?
• Memorability: Can the audience recall the brand when they need to?
• Extendability: Can your brand work across various media channels?
• Depth of meaning: Can your brand communicate to your audience on different levels?

Read more: Unlocking Growth: 19 Traction Channels for Business Success

5. Cultivate

Thriving businesses stay successful by staying flexible and evolving with market, industry, economic, and cultural shifts. Instead of sticking to rigid structures, they act more like living entities, adjusting, growing, dividing, and combining as required.

In contrast to the traditional corporate focus on uniformity and consistency, the modern approach to branding values vitality and dynamism over strict adherence to sameness.

Behave with consistency

A Lucidpress study reveals that keeping your brand consistent on all platforms can boost revenue by up to 23%. Maintaining a uniform brand image, message, and voice enhances recognition, helping your brand stand out in the competitive marketplace.

Think of your brand like a person: you can change its appearance, not its core traits. Instead of focusing on controlling the visual aspect, embrace a new approach that influences the character of your brand. This approach guarantees consistency in the eyes of your customers, aligning behavior with the overall brand image.

Provide a brand compass

Once you’ve sorted out the details, worked together, come up with new ideas, and confirmed everything, it’s time for each employee to get their own sturdy set of thoughts about what the brand is and how it works.

Branding is something you can learn, teach, copy, and nurture. Ongoing education programs help align everyone in the company, while seminars, workshops, and critiques ensure that outside partners stay in harmony.

Protect the brand

As your brand grows, it becomes more vulnerable. A failed launch, unclear brand focus, or any hint of scandal can harm credibility and lower brand value. In today’s globalized world, bad news spreads quickly and widely.

Constantly renew corporate memory for long-term brand success. Implement a brand education program, involve the creative network, and consider a Chief Brand Officer (CBO) to bridge logic and magic, strengthening the brand connection.

Summary

Solving the brand gap means finding the right balance between brand strategy and creativity for businesses. The five branding disciplines discussed here form a virtuous circle, boosting your brand value and leading to a sustainable competitive advantage.

Integrating software with customer relationship management (CRM) capabilities can simplify your brand-building process. These tools centralize your customer data, ensuring a consistent brand image and enabling agile strategy adjustments for a strong market presence.

Learn more about ERP here.

References

Neumeier, M. (2006b) The Brand Gap: How to Bridge the Distance Between Business Strategy and Design : a Whiteboard Overview. Peachpit Press.

Overview

The inventory turnover ratio is a crucial metric in retail, helping businesses gauge their operational efficiency. It shows how fast a company sells and replenishes its inventory, providing insights into its health.

This article delves into the significance of the inventory turnover ratio, explaining its definition, calculation methods, and impact on a company’s success. Beyond financial aspects, mastering this ratio is vital for profitability, customer satisfaction, and staying competitive in the industry.

What is inventory turnover ratio?

Inventory turnover is a tool that shows how well a company handles its stock by revealing how often it sells and replenishes it. This ratio is vital for businesses dealing with tangible goods as it gauges the success of their inventory management.

Businesses can use the inventory turnover ratio to improve their pricing, manufacturing, marketing, and purchasing strategies. An efficiency ratio tells us how well a company utilizes its assets.

The importance of inventory turnover in your business

Improves cash flow management

A high inventory turnover means your products are selling fast, turning inventory into cash quickly. This improved cash flow helps you invest in your business, pay off debts, and seize growth chances, ensuring a healthy financial situation. 

Rapidly selling goods is crucial for maintaining good cash flow, preventing tied-up capital in slow-moving or excess inventory from affecting your ability to meet financial obligations.

Minimizes holding costs

Businesses usually need a place to keep their stuff before selling it. If you have a warehouse or a particular area for your things, you’re spending money to keep them there.

Inventory turnover is about lowering the costs of keeping stuff in your storage. The longer things stay in your warehouse, the more you pay for storage and insurance, and the more risk there is of them becoming outdated. 

Enhances customer satisfaction

Maintaining a high inventory turnover rate ensures that products are always available for customers. By keeping a close eye on turnover, you ensure popular items stay in stock, reducing the chances of running out and improving your ability to meet customer demand quickly.

Increases your profitability

Effective inventory management boosts profits by reducing excess inventory costs. Streamlining inventory turnover can also empower businesses to negotiate better terms with suppliers, resulting in discounts and favorable payment options that enhance profitability.

Better decision-making

Understanding inventory turnover is crucial for intelligent business choices. Quick adjustments are necessary for shifting consumer tastes, market trends, or economic fluctuations.

A higher inventory turnover ratio helps companies respond promptly to market shifts. It enables them to adapt real-time production, pricing, or marketing strategies according to the demand for their products.

Calculations and formula for inventory turnover

1. Obtain the cost of goods sold

COGS, or Cost of Goods Sold, appears on the income statement. It covers the direct expenses of making or buying resale products, excluding indirect costs like distribution and sales force expenses.

In simple terms, you spend COGS directly to produce the product. For retail businesses, it’s usually the cost of the finished product (plus shipping, if applicable) bought from a manufacturer or supplier.

2. Calculate the average inventory

Average inventory is a way to determine the approximate value or quantity of goods during specific time frames. It’s the average value of inventory within a set period, calculated by adding the starting and ending inventory values and dividing by the time period.

You can use this formula for extended periods, such as totaling monthly inventories for a year and dividing by 12. It’s also applicable to shorter timeframes, like averaging the beginning and end of the month’s inventory and dividing by 2.

3. Calculate the inventory turnover ratio

With the Cost of Goods Sold (COGS) and Average Inventory on hand, you can easily find the Inventory Turnover Ratio using the following formula:

The best inventory turnover ratio varies by industry, and what’s “good” depends on the type of business and its products. Generally, a higher ratio is better because it shows the company is efficiently handling its inventory and turning it into sales quickly.

A high ratio means the company sells products fast and manages stock well, reducing the risk of unsold items. However, a high ratio may signal problems like stockouts, leading to lost sales. On the other hand, a low ratio might mean too much stock or slow-moving items, tying up money and raising holding costs.

Read more: Warehouse Management: Significance in Supply Chain, Challenges & Success Factors

Factors that affect inventory turnover

Seasonality

Keeping your inventory turnover healthy is essential to handle minor changes without big problems. However, the impact can be significant regarding time-based ups and downs, like during holidays and seasons.

Before a season, inventory turnover goes up, stays steady during the season, and drops after it ends. Good planning and intelligent inventory management can help reduce the harmful effects of seasonality on turnover rates.

Product lifecycle

Inventory shifts as products go through their lifecycle. Turnover rates rise during the introduction and growth stages, hitting their highest point in the maturity phase. 

However, as market saturation and evolving customer preferences lead to declining inventory sales, adjusting pricing and promotions can help bring inventory turnover back to healthier levels.

Supplier relationships

Building solid relationships with suppliers is essential for a smooth supply chain. Reliable suppliers help ensure consistent and timely deliveries, cutting down on lead times and allowing businesses to manage their inventory more efficiently, positively impacting turnover.

Inventory management procedures

Good inventory management is all about how well the inventory department handles items. If turnover rates are too high or too low, it’s a sign that we need to check and improve our ordering and management methods. 

Effective inventory management involves accurate record-keeping, real-time tracking, and strategic ordering to ensure smooth stock movement and avoid overstocking or understocking.

Warehouse efficiency

Efficient warehouse operations are crucial for speeding up the supply chain. A well-organized layout, smooth order picking and packing, and intelligent inventory rotation all help products move faster. This efficiency reduces unnecessary costs and reduces the time products stay in storage.

Read more: The Ultimate Guide to Choose the Right Warehouse Layout and Design

Best practices to improve inventory turnover

Automate purchase orders

Automating tasks boosts efficiency and can save costs. Use an inventory management system that updates stock in real-time and notifies you instantly when a sale occurs.

Choose a system that swiftly and accurately fulfills purchase orders for better control and fewer errors. Additionally, set up reorder point alerts to ensure timely restocking, minimizing the chances of stockouts and overstock situations.

Smart pricing strategies

One-size-fits-all pricing strategies won’t cut it. Instead, use different approaches like bundling, discounts, or promotions to boost sales and clear inventory.

Optimize pricing to maximize profits for popular items and eliminate outdated inventory. If certain items aren’t selling, consider donating them for a tax deduction or selling through alternative channels.

Streamline your supply chain

To make the supply chain smoother, focus on improving everything from buying to delivering. Cut down on waiting times, work with fewer suppliers, and use effective logistics to lower storage costs and speed up product movement.

Don’t just pick suppliers with the cheapest prices; work together to set up fast and reliable delivery plans. Especially for products crucial to your inventory sales or facing high demand, prioritize quicker or guaranteed delivery for those items or essential parts.

Improve forecasting

Different products have different levels of popularity, affected by seasons, occasions, and fashion trends. To stay on top of this, regularly monitor and adjust your yearly and quarterly forecasts based on these factors and your target audience.

By employing advanced forecasting methods like data analytics and machine learning, businesses can enhance their ability to predict future demand. Forecasting reduces the chances of running out of stock or having excess inventory, ensuring your stock turnover aligns with actual demand trends.

Effective marketing strategies

To boost your inventory turnover, create a strong marketing plan. Target low-selling items and connect with hard-to-reach customers. 

Expand into new markets and utilize various marketing channels like social media, SEO, paid ads, content marketing, and email campaigns to enhance sales and improve your inventory turnover rate.

Conclusion

The inventory turnover ratio is vital, showing how well a company handles its stock. Keeping a good turnover ratio isn’t just about finances; it’s a smart strategic move.

Integrating inventory management software with an ERP system helps businesses simplify and automate inventory tasks, making calculating and improving turnover ratios easier. By using these tools and practicing efficient inventory management, companies can boost financial performance, satisfy customers, and navigate the ever-changing world of commerce.

Overview

The global POS Software market is expected to grow significantly from 2023 to 2030, driven by the increasing demand for cashless transactions, accurate sales and inventory tracking, and the utilization of analytics for improved sales strategies, particularly in the retail sector.

This article breaks down the essentials of POS systems, from what they are to how they work and their benefits, showing why they’re crucial for businesses of all sizes. We’ll also help you navigate the world of POS technology, guiding you in selecting the right system for your business needs.

What is a POS system?

A POS system, short for point-of-sale, is a tool businesses use for in-person sales, including devices, software, and payment services. It handles customer purchases, accepts payments, and issues receipts.

Modern POS systems go beyond traditional cash registers. They can generate reports, assist with inventory management, and track employee hours, offering a range of functionalities for businesses.

Key components of a POS system include:

Hardware:

• Cash Register/Drawer: A safe place to store cash and coins.
• Barcode Scanner: Quickly input item info by scanning product barcodes.
• Credit Card Terminal: This lets businesses accept credit and debit card payments.
• Touchscreen Monitor/Computer: Use it to run the POS software and enter transaction details.
• Customer Display: A handy tool for showing customers their items and prices.
• POS Terminal: The central unit that links all hardware and runs the POS software.

Software:

• Point of Sale Software: This is the primary tool for handling sales, managing inventory, and creating reports.
• Payment Processing Software: This software handles electronic payments and works with the POS system.
• Inventory Management Software: Keep track of your stock levels, reorder when needed, and manage product information quickly.
• Employee Management Software: Control user access, monitor employee sales, and keep an eye on work hours efficiently.
• Reporting and Analytics: Get reports on sales, inventory, and other essential business metrics for better analysis.
• Customer Relationship Management (CRM): It’s optional but handy for keeping tabs on customer data and preferences.
• Cloud-based Functionality: While not necessary, it’s becoming more common. It allows businesses to access and manage their POS system remotely.

Read more: Retail Layout: A 6-Step Guide to Effectively Design a Store

Understanding how a POS system works

A POS system helps your business take payments and manage sales. Simply put, it adds up what a customer wants to buy, handles the payment, and updates your inventory. 

Usually, the system works like this:

1. The customer makes a purchase

Customers choose what they want and then go to the checkout counter. At the counter, either the cashier or the customer uses a barcode scanner to scan the product barcodes. If no barcodes are available for an item, it can still be added to the system by manually entering its details.

2. The system calculates the total

When you scan or input items, the POS system instantly calculates the total cost by adding up their prices. It also considers taxes, discounts, or promotions that might change the final amount.

3. The customer makes the payment

The customer then provides payment for the total amount. Payment can be made using various methods such as cash, credit/debit cards, mobile payments, or other electronic forms of payment such as loyalty points or gift cards.

If the payment is made by card, the system may prompt the customer to insert, swipe, or tap their card on a card reader to complete the transaction.

4. POS transaction is finalized

When the payment goes through, the POS system completes the transaction. It gives your customer a receipt with all the details about what they bought, the total cost, and any change they might get.

It also keeps track of inventory, sales reports, and other vital information to help your business run smoothly.

Why should you use a POS System?

Improves operational efficiency

Joy Baer’s research in “The Time to Win” reveals that 50% of customers won’t wait more than three minutes in a store. Customers are willing to pay 19% more for “always immediate service,” emphasizing the importance of speed and convenience.

Point of Sale (POS) systems are vital in speeding up checkouts, ensuring faster and more efficient transactions. In retail stores and restaurants, where customer satisfaction is critical, quick and accurate transactions contribute significantly to customer happiness.

Expands your payment capabilities

Digital payments are on the rise globally, with two-thirds of adults using them, particularly in developing economies where the share has grown from 35% in 2014 to 57% in 2021, according to World Bank Group data.

Modern POS systems support diverse payment methods, expanding your customer base and boosting sales opportunities. Efficient and secure payment processing minimizes errors for a seamless transaction experience.

Improves sales reporting and analytics

BCG states that companies excelling in personalization experience better marketing efficiency, increased digital sales, and enduring customer relationships, resulting in growth rates rising by 6% to 10%.

POS systems generate detailed sales reports and analytics, providing crucial insights for business owners. This information aids in making informed decisions, such as identifying popular products, peak sales times, and customer buying habits, ultimately helping optimize business operations and enhance profitability.

Better employee management

A study found that U.S. employers lose over $400 billion yearly due to decreased productivity. Even small breaks of 10 or 15 minutes may not seem like much, but they add to significant losses over time.

POS systems can help track employee performance by keeping an eye on sales productivity and identifying top-performing staff. Features like employee logins enhance accountability, preventing unauthorized transactions and making the work environment more secure and trustworthy.

Enhances your security

Handling cash for businesses means keeping it safe, secure, and accounted for, which can be tricky due to transportation and security issues. Small businesses in less advantaged areas, without access to advanced security or cash transport services, bear a higher burden as cash theft amounts to approximately $40 billion annually in the U.S. retail sector.

POS systems enhance security through encrypted transactions and user authentication, minimizing the risk of fraud. Centralizing transaction data helps businesses safeguard sensitive information, ensuring compliance with industry standards and regulations.

Choosing a POS system for your business 

1. Identify your business needs

Understand your business needs by looking at what you sell, who you sell to, and how much you sell. Decide if you need the basics, like keeping track of inventory, sales reports, and managing customer relationships, or more advanced features like connecting to online stores.

2. Understand your budget constraints

Set a budget for your POS system, factoring in initial setup costs and ongoing expenses like subscriptions, transactions, and support. Make sure to compare pricing models to find the best match for your budget, which includes one-time purchases, subscriptions, or per-transaction options.

3. Consider ease of use and training

Select a POS system that’s easy for your staff to use, reducing the need for extensive training. An intuitive interface with features like touchscreen functionality and customization options can minimize errors and enhance efficiency.

Check if the vendor provides thorough training resources, like tutorials and documentation, if training is required. Well-trained staff will facilitate a smoother transition to the new POS system.

4. Check for compatibility

Make sure the POS system easily works with your current tech setup. Check if it’s compatible with your accounting software, e-commerce platform, and other essential tools. 

Integration can make things smoother, cut down on manual data entry, and give you a better overall picture of how your business is doing.

5. Consider scalability of your business

Choose a POS system that can adapt as your business grows. Think about your future needs, expansion goals, and evolving technology. This way, your investment in a POS system becomes a lasting solution, not just a quick fix. 

6. Read reviews and get recommendations

Explore customer reviews and testimonials for firsthand insights into how businesses like yours experience the POS system. Request references from the POS provider. The vendor can assist you in selecting appropriate software with expert advice.

Additionally, read reviews from your industry peers and seek recommendations from business networks or associations to evaluate the performance, reliability, and customer support of various POS solutions.

7. Trial the system

Explore free trials or demos from POS providers to test if their system aligns with your needs and integrates smoothly with your business. This hands-on experience helps you make an informed decision before making a full purchase.

Recommended POS software for 2024

Impact POS

Impact POS is a user-friendly online tool that manages orders, promotions, loyalty programs, and stock across multiple stores. It easily connects with ERP, accounting, CRM, inventory, manufacturing, and omnichannel systems.

Simplify your sales and online management with automatic offline-online synchronization and accurate analytical data. Subscribe to the complete ERP package, including extra modules, starting at IDR 250.000.

Moka POS

Moka POS is an all-in-one platform in Indonesia that bundles a cashier app, online store, payment, inventory management, and a loyalty program.

Moka POS is designed for small businesses, streamlining sales and operational tasks and boosting efficiency and profits. It’s mobile, cloud-based, and adaptable for different companies, like those in the food and beverage industry. You can try Moka for free for 14 days, and the service fees begin at IDR 299,000 per outlet per month.

Qasir

Qasir POS is a user-friendly app that assists business owners in handling sales, product management, stock monitoring, and transaction reporting. With features like a digital cashier system, inventory management, sales reports, and digital payments, it simplifies retail store management using just one Android device.

Starting at IDR 99.000 per month, Qasir offers POS application services with the option to add extra features based on your chosen subscription package.

Kasir pintar

Kasir Pintar is a handy Android app designed for small and medium businesses to handle inventory, track sales, and conduct transactions effortlessly. It works seamlessly on mobile devices like phones and tablets, giving entrepreneurs the flexibility to manage their business efficiently.

With the added PPOB (Payment Point Online Bank) feature, Kasir Pintar enables users to generate extra income and carry out daily transactions, enhancing overall convenience.

Shopify POS

Shopify POS helps retail stores handle transactions and take payments on the spot. It equips businesses with tools to manage sales, products, and staff efficiently.

Additionally, Shopify enables the creation of online stores, offering a 14-day free trial and subscription plans starting at $29 per month.

Square POS

Square POS is a modern tool designed to help business owners handle transactions and easily track inventory. It has a user-friendly interface, enabling efficient tracking of sales and stock.

For a monthly fee ranging from free to $29, Square POS offers advanced features tailored for restaurants, retail, and service-based businesses. These features include integrated inventory management, real-time sales reports, and seamless transactions with robust payment integration.

Conclusion

A POS system is a tool that makes businesses run smoother by handling inventory, transactions, and financial reports automatically. With the growing need for efficiency, companies should integrate this software into their daily operations.

Yet, the market is flooded with various POS systems, making it crucial to pick the one that fits your needs and is user-friendly. It’s essential to understand and carefully consider your options to make the right choice for your business.