By Andrew Lester, Managing Partner of Carr-Michael Consulting

Over the last ten years, most businesses have had to cope with increasingly promiscuous buyers. Where previously brand loyalty could be delivered by simple product or service excellence on the core attributes of the offer, this is no longer enough.

In all walks of life customers are increasingly interested in brands but not in the way we previously considered. Brands that offered premium status often no longer do so. Many designer labels and car brands such as BMW, Mercedes, and Audi are “suffering” from their own success. Their sales success is at the expense of exclusivity. More recently customers are re-evaluating the real benefits they get from particular brands and are much happier moving between brands than ever before. Brand promiscuity is the death knell for businesses looking to differentiate themselves to provide premium shareholder returns. Customers who are increasingly concerned in only having a differentiated brand are a dangerous breed. They don’t care if it’s Armani, Burberry of Lacoste, they just are happy that it is a “brand”, a label to flaunt.

Such customers are dangerous because they are not buying into the core values of the brand. They are buying merely into the surface marketing of the product or surface. As such they have limited loyalty to you and worst of all do not act as advocates of your company or your products.

The lesson learned here is key for all business owners and directors. To be effective and reduce the costs of holding onto and getting new customers all businesses must generate a core group of customers who go out of their way to advocate the use of your products and services. This requires strong relationships. Consequently effective marketing in 2011 will increasingly have to be based on encouraging your customers to actively promote your products and services on your behalf. But why should they do this: what’s in it for them? The core reason why any customer would actively promote your business is the credibility the referral gives them. In other words, their use of you and your products is a reflection of themselves as being “honoured” to work with your company and in having a positive relationship.

Marketing your relationships will become increasingly important as the economy recovers. SMEs currently account for 95% of all companies and almost 50% of UK GDP. SMEs rely on strong business relationships. They do not have the scale or position to “demand” great deals, they have to negotiate them. In such an incredibly fragmented economy with an increasingly mobile workforce there is a major opportunity to market your business relationships as a key differentiator. It is a variation on a simple concept: it’s not just what you know, it’s who you know and most importantly who is it that trusts you to work with them.

Please feel free to comment by contacting me: andrewlester@carr-michael.com. Andrew Lester is Managing Partner of Carr-Michael Consulting, specialists in growth management and business performance improvement.

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