The most common and least understood marketing barrier facing outsourcing service providers is the absence of a strong brand. Most brands associated with IT and IT-enabled services (ITeS) companies are selected based on criteria relevant to the location of outsourcing firms, rather than the location where they intend to do business.
In the outsourcing industry, branding challenges are most acute for companies based outside their target market, particularly in locations with competitive cost advantages. Companies in these locations often face branding challenges stemming from incumbent brand selection and deployment practices.
Most offshore call centers, BPO (business process outsourcing) firms, and software service companies are located in economies where major purchasing decisions have traditionally been made based on longstanding personal connections—rather than on the qualifications of a seller—and where buyers face fewer competitive choices than in the U.S.
In other words, most offshore outsourcing companies choose brands as if they were in a sellers’ market. It was a seller’s market during the first five years (2000 to 2004) of the Indian call center boom and from 1995 to 2000 in the market for software services from India.
Buyer’s Market
Now, outsourcing is a buyer’s market, thanks to increased competitionfrom emerging destinations and the commodification of numerous types ofoutsourcing services: remote computer system administrationand ISP (Internet service provider) support services; collections and accounts receivable outsourcing; travel agency services; simple inbound call center services; medical claims billing; transcription; recruiting and otherhuman resources management activities.
A buyer’s market is driven by clients moving away from strategic sourcing with a single prime vendor toward more sophisticated vendor management practices, with a large number of specialized outsourcing contracts designed for cost competitiveness and adherence to performance metrics. Outsourcing version 1.0 is being replaced byoutsourcing 2.0.
In outsourcing 2.0, clients are no longer combing the globe seeking competitive service agreements from providers that lack marketing and branding savvy. Now, outsourcing firms are attracting buyers through acombination of quality, value, and brand image. Instead of clients being happy to go from US$82 per production hour for onshore technical support services to $18 offshore at a location with poor client relations skills, clients now seek to go from $18 offshore to $15 offshore—and expect to receive service and reliability improvements.
Within client communities, brands are increasingly serving as a distinguishing mechanism for associating positive qualities with offshore firms for which scant additional information may be available — at least during the initial stages of a procurement cycle. In the more competitive world of outsourcing 2.0, brand management has become a strategic imperative.
In the world of outsourcing 2.0, poor brand choices become marketinghandicaps. A strong, persuasive brand can provide competitive advantages, especially in a buyer’s market. A brand can and should encourage buyers to form positive associations with a vendor.
In its broadest sense, the definition of “brand” can extend beyond the name of a company or service or product line to include brands expressed through graphic logos, slogans, and color schemes. Here, we focus on brands as names of companies and product or service lines.
The Ten Commandments of Branding
Failure to follow any of the following 10 rules makes it difficult to successfully market a company. Any company that violates one of these rules must increase sales and marketing spend to offset poor branding decisions.
1. Focus on Target Markets
The first commandment of branding is that a brand must perform well in its target markets. This rule is often ignored in favor of brands that confer status in the company’s home market.
2. Don’t Covet Another’s Brand
A brand should not borrow or approximate a brand name already known in a target market, regardless of how dissimilar the service offerings are. Violating this rule drives away clients who are hesitant to trust a company with a tenuous or questionable reputation. When an offshore company infringes on an established brand name in a target market, nothing else should matter to potential clients.
3. Match Brands Exactly With Domain Names
A brand should be identical to its corresponding domain name. For example, a brand for news and services to protect against software vulnerabilities could be expressed as SoftwareVulnerabilities.com, not Software-Vulnerabilities.com or iSoftwareVulnerabilities.com. The dash can help with mirror sites for search engine optimization, but not for the primary brand. Unless streaming video is involved, only dot-com and dot-net names should be used for international andNorth American markets.
4. Don’t Use Silly Prefixes
Unless a company has been in business for more than five years, its name should not contain the prefix ‘i’ or ‘e.’ eBay has built up immense brand equity. Other companies with other lowercase prefixes in their brands have not.
5. Escape the Background Noise
Avoid overused words such as “global,” “tech,” “soft,” “serve,” or “solutions.”In the Indian state of Maharashtra, for example, more than 300 businesses use the word “global” in their brand names. A company seeking to distinguish itself from competitors will not escape the background noise if it uses the word “global” in its brand.
6. Obey Rules of Grammar
Do not violate rules of grammar, including the use of capital letters. When your company becomes bigger than eBay, then it can break this rule.
7. Avoid Negative Connotations
Brands should not carry confusing or negative connotations for peoplein target markets. This extends to sexual and religious connotations.
8. Make Brands Memorable and Easy to Spell
Brands should be memorable without being difficult to spell. It is easy to direct potential customers to a company’s website once, especially through advertising. It is harder to inspire customers to return on their own without a memorable, easy-to-spell brand. If misspellings are possible, common misspellings should be registered as domain names.
9. Obtain Internal Understanding and Acceptance
The exact name of a company and its brands must be accepted within and communicated throughout the company’s organization. At an Indian call center company and a software services firm in Pakistan where I’m currently working, there are disagreements and uncertainties among top managers at each firm about their companies’ names. This is not uncommon, especially at small Indian call centers that operate locally and largely on a cash basis.
10. Test Prior to Deployment
Test several potential brand names among members of your target marketbefore making a selection. Important IT project deliverables shouldexperience rigorous quality assurance testing before delivery. Branding choices should be subjected to no less scrutiny.
Many firms attempt to enter international markets with brands thatdetract from their credibility. Don’t be one of them. Enable potential clients to remember you positively and be attracted to your firm because of its brand identity, not despite it.
Rather than choosing a brand name that is not distinctive, overused, or hard to spell, choose a brand name that conveys meaning for the firm and its founders.
Outsourcing of brand management is the safest option. Hire an international brand consultant in your target market—not where your company is based. The brand consultant can suggest brand options andscreen out words with negative or restrictive connotations. A brand consultant can confirm that preferred brand names are not already claimed, test the names in target markets, and handle trademark and service mark registrations.
Brands represent the most important and often the most lastinginvestment that entrepreneurs can make. For companies such as Pan American World Airways in the U.S. and Dunlop India, their brand names ultimately became their most valuable and durable assets.
Anthony Mitchell, an ECT News Network columnist, has beeninvolved with the Indian IT industry since 1987, specializing through internationalStaff.net in offshore process migration, call center program management, turnkey software development, and help desk management.
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You’ve covered a lot of ground in this article including marketing, branding, brand identity and web identity. I think you are spot-on about the importance of this and, especially here in India, perhaps the under-appreciation of this area AM ong the mid-tier players.
I might add a commandment that some of your other 10 touch on but I think bears commandment status, that is: "Be culturally sensitive". The way that we like to sell here in India is not necessarily the way that people in the US or UK or elsewhere like to buy. Compare the look, feel and "workflow" of the average Indian market and the average American mall. You don’t necessarily want these vast differences showing up in subtle or not so subtle ways on your website.