If you were around in the 80’s like I was, maybe you remember the “generic brand” at your local grocery stores.
I’m talking about the plain white packages with only black block letters and a bar code on them.
Those black block letters spelled out things like BEANS, BEER, COLA… and who could forget LUNCH LOAF.
A far cry from all the cool brand names and catchy slogans we’re used to, the marketing strategy behind the generic craze back in the day, was simply to be cheap.
That’s it. Low price. That was the only goal, and it was also the only competitive advantage this brand had.
Today the generic brand is gone, but in its place are numerous private label store brands. And if you asked most consumers, you’d find that the majority of them believe that their local grocer’s “private label” store brand is of equal if not better quality than the national brand.
Many recent studies have shown that private label products are growing at a steady pace, and in the grocery business, private label brands now account for a lion’s share of the grocery business.
Think about how you shop. When you buy eggs, do you feel like you have to buy a major brand? Or are you just as happy with the store brand? If you’re like most people, you’re perfectly happy to buy the eggs with your local store’s logo on it instead of the national brand. In fact, because it’s local it may be MORE trusted as well.
All the egg and lunch loaf conversation aside… you’re probably wondering how this applies to you as a contractor.
The same principles that have turned numerous companies in other industries into profitable private label masters can also be applied to service contractors.
Believe it or not, in some areas of the country the local private label service contracting company brand is more trusted than the national brands like Carrier, Trane, Lennox and others. Now I’m not saying that you should hide the brand of the equipment you are selling. However, emphasizing your service as the main benefit that people purchase increases the trust for consumers. Basically, YOU are taking responsibility for the performance of the job and NOT pushing it on to the manufacturer.
If you want to reap the many benefits of a private label strategy and be able to teach your team how to execute it, you’ll need to know the best practices in creating the brand of YOU…
Best Practice #1: Find a Partner Who Already Gets it
Perhaps the best-known example of private label branding is Sears. For years, Craftsman, DieHard, and Kenmore have been the backbone for Sears from a brand perspective. The Sears’ website declares:
“Throughout its history, Sears has committed itself to quality private-label brands. For Sears, its brands are more than just the names of product lines. They are symbols of the company. Sears stakes its reputation on the strength of its brands. Products must meet the most rigorous standards of quality and safety before they earn the right to bear such names as DieHard, Kenmore, and Craftsman.”
The companies who actually manufacture the products for Sears are basically trading brand recognition for increased business volume in this arrangement – a trade they’re happy to make.
The manufacturer in this situation is demonstrating the “Pure Motive” I’m always talking about by supporting the people (in this example, Sears) who sell and service the products they manufacture.
In the HVAC industry, Goodman who also owns Amana, is a great example of a company who’s on board with the private label philosophy. Their number one customer is the contractor and their number one goal is to support the contractor’s business.
That means everything Goodman does (all their marketing and support) is focused on helping contractors serve their clients – not on building a monument to their own brand.
For this private label strategy to work optimally in our industry, the manufacturer needs to have premium, mid-range and economy level products to choose from, and the selling brand (you) needs to be able to offer those same varying levels to its customers in warranty and financing options.
The smartest and easiest way to start marketing the brand of you is to partner with a company that already embraces the private label philosophy – not one you have to sell on the idea and drag them into it kicking and screaming.
Best Practice #2: Differentiate Your Own Private Brand
Private label brands are most effective when they operate in an obviously different way than their competitors.
For instance, do you remember Saturn cars? They were manufactured by GM, but sold under the Saturn label.
So other than a different logo, what made Saturn anything other than just another General Motors vehicle? The way they did business. The customer experience.
All Saturn customers paid the same price. Remember “No Haggle Pricing?” And when you bought a Saturn, the dealership would round up the troops and throw a little party for you.
That was the difference. It was still a GM vehicle. But the people, the strategy, and the experience at the local dealership made buying a Saturn a unique buying experience.
And in our industry, it’s no different. What makes your private brand premium and exclusive? It’s really nothing more than the way you choose to position yourself and the customer experience you provide. You can choose to put your own logo on the equipment or not – but the important thing is that
You can choose to put your own logo on the equipment or not – but the important thing is that YOU are the memorable brand – not the manufacturer. And the way you do that is with world class service.
Remember that exceptional service always wins. The experience is worth more than the equipment. World-class service and an outstanding customer experience is something you can offer your customers that no other brand name can.
Maybe your premium solution comes with WIFI temperature control with home monitoring cameras that will activate when the kids come home from school.
What if you created an exclusive “President’s Club” where you have a client appreciation barbecue or tickets to a ballgame?
You could package your “Signature Series” with premium perks like all the filters, bulbs and consumables, 15 years of planned service or other exclusive benefits.
Let your imagination run wild and take your relationship with clients to another level.
Best Practice #3: Verbally Package Your Brand
Verbal packaging basically means to very carefully and skillfully choose your words to persuade. It’s the art of naming and describing things properly.
As an example, Trader Joe’s does an excellent job of verbally packaging their lines of ethnic foods.
- All Mexican food is sold under the name “Trader Jose’s.”
- Their Italian line is sold under “Trader Giotto’s.”
- You’ll find all Asian food sold under the label, “Trader Joe-san.”
- And vitamins and supplements are sold under the name, “Trader Darwin’s.”
Notice how carefully each verbal package is utilized to indicate expertise or quality with each item. Also notice how each of the sub-brands connects back to the main brand by using the word “Trader” as a starting point. Can you think of anything that you could verbally package to indicate higher quality for your clients? Here are some examples…
- Acme Comfort Signature Series Hybrid Comfort System
- Acme Commercial Grade Equipment Protection Package
- Acme Surgical Grade Air Quality System
- Acme Smart Home Temperature, Lighting, and Home Security System
- Acme “Can’t Write a Check” Signature Warranty
- Acme “Can’t Write a Check” Planned Service President’s Club
These are real examples being used by actual contractors today to differentiate and sell their services at a much higher value than just offering the equipment as a stand alone commoditized product.
Best Practice #4: Get Your Service & Sales Team On Board
To sell successfully, you must first be sold yourself. This means that the first people who need to buy into the value your company creates are your owner, your management, and the entire tech/sales team.
How do you get your team on board?
By only allowing your team to offer the premium services and packages with your private brand and NOT with the other brands. Your people have to believe that there’s better service and higher quality in using your private label brand over the name brands.
For instance, at Nordstrom’s, the store brand has better warranty and support than any of the external brands that it sells. If you purchase the Nordstrom’s brand you are treated to the highest level of service available.
When you package your best warranties and service packages only with your private label, you’re showing your team that you believe in them more than you believe in the manufacturer.
To get your team on board, just communicate that the in-house brand is covered no matter what and the other brands are covered only according to industry standards warranty and service packages.
Best Practice #5: Bundle & Package Private Label Solutions
A true best-in-class private label brand develops bundles that include premium, mid-range and economy choices for their clients – removing the need to shop anywhere else. If you bundle premium solutions and features together then you’re offering something exclusive that none of your competitors will ever think of much less be able to offer.
Here are some important factors to think about when offering bundles and packages…
- Which option is shown first to your clients?
- Are the solutions are personal and customized?
- Carefully crafting the verbal packaging of your premium, mid-range and economy solutions?
- Are you offering the right number of solutions at each economic buying point?
- Are you creating the proper price difference between each solution?
- Are you creating the optimal range of pricing between the top and bottom choices?
The most profitable contractors in the United States sell their name and their service as the main thing their consumers purchase.
So whether you decide to actually privately label your equipment or not, you have to commit to The Brand of You – and not to selling “just equipment.”
To learn more about leveraging The Brand of You by creating the perfect options every time (as outlined in the 6 points above), and emphasizing superior service – check out our new Best Ever Flat Rate Guide. It’s easy to use and sets you apart from the competition, positioning your company as a unique brand in your market.
So are you all in?
What are your thoughts or experiences with private label brands?
Let’s talk about it in the comments!