#11 - Identity: The key to profitable growth

Every business is built on the premise of profit.

If you don't have profit, your business won't last long.

In a nutshell, profit is the difference between how much you receive from a customer and how much it costs you to deliver whatever they're buying (which includes not only materials but also the energy and effort that it took you to make that happen - whether it was your own or from others).

One way to grow a business is to sell as many products/services as possible, which means finding more and more customers.

Another way to grow a business is to increase the difference between the cost and the price, which means getting people to pay more and increasing your margins.

A third way to grow a business is a combination of both: finding more of the right customers who will pay more for what you have.

But how do you do that? In such a competitive market (these are your words), how do you stand out?

Well, here's what not a lot of people understand: the difference in price (the profit) you're able to charge is not only about what the market dictates, but also about the amount of "value" your brand delivers to your customers. In other words, it's the level of transformation people get from choosing YOUR product over others.

Every business is in the transformation business.

Let me tell you why.

The only reason people spend money is because they want or need something that they don't have.

One way to look at what a transformation means is how people are "before" and "after" they engage with your brand. What changes for them after they engage with your brand's universe or products?

A transformation can be about how they feel about themselves, how they relate to the world, or how the world perceives them. It's not necessarily "Before I was barefoot, and now my feet is protected."

Every time your brand operates with the sole goal of selling more (way 1 o f growing a business), your business will struggle. You will be forced to lower your prices to compete because people will see your product or service as merely a feature. You will also have to spend a lot on marketing to find more customers because there is no word-of-mouth power about what you are offering.

To increase your profit, you need to increase the value you provide. One way to do this is to build a strong identity and infuse meaning into your brand.

Changing how you see your business changes everything.

What is the transformation your brand delivers?

How does this question help you?

1. It helps you communicate your brand's value proposition clearly.

2. It helps you guide your team in the right creative direction - from product development to communications.

3. It helps you identify who benefits the most from what you're selling.

Let’s discover your answer by breaking down the question:

Part 1: “What is the transformation”

• The problem with words that become hyped is that they lose their meaning. One of these words is "value". We hear everywhere that we have to deliver "value".

• But what does "value" actually mean? Another way to look at it is to think of value as a piece of transformation. What is the before and after of your brand? How do people FEEL and what do they EXPERIENCE after engaging with your brand? And how is that different from how they were before you came into the picture?

Part 2: “your brand delivers”

• When talking about delivery, we usually tend to think directly about what the product or service does for customers. However, the product is merely a means to an end, a way to help people experience the transformation, but not the transformation itself.

The transformation is what people are actually seeking (a desire, a need, a goal, a feeling). When you talk about the transformation your brand promotes clearly, you position your brand and products as the right ones to help people achieve their desires.

I have discussed this here.

So the real question we're trying to answer is:

How do people change after engaging with your brand?

Let's look at some examples of what this means.

Example 1:

Every good story has a transformation taking place. Your brand story is no different.

Let's take Patagonia as an example. The story of transformation of Patagonia is about becoming a responsible adventurer.

Whenever someone buys a Patagonia product, they're not just buying shorts, a jacket, or a shirt.

The entire communication of Patagonia is about being conscious and responsible about the environment in which we live.

Therefore, when I buy from Patagonia, I can go out there, explore, have fun, and communicate to the world (and reassure myself) how responsible and conscious I am.

The value is in the identity - how I see myself and how the world sees me.

Example 2:

Another brand, one I already covered in a previous newsletter, is DB journey (which I personally love from real experience).

The story of transformation that DB promotes is that you're ready and equipped for any adventure.

They specifically talk to people who live "on-the-go" and who are passionate about traveling and outdoor sports. I love the brand because I love to travel, surf, and sometimes work while I'm traveling.

But the truth is that most of the time I'm using DB bags, I'm traveling between my home and a coffee shop, or when I'm heading to the beach, which is only 5 minutes from my place.

The thing is, it doesn't matter where I'm going, every time I put the bag on my back, I feel like I'm the coolest person in the world who travels and practices the best sports (even if it's only about 15-20% of my time). And I do feel like I'm prepared for any cool adventure.

Again, reassurance of identity. We buy the things we want to become. Or how we would like to see ourselves.

But again - I shall reinstate: the message (transformation/value) is important because it guides everything you do from product to communications. But a message without aligned action won't sustain.

Now, it’s your turn…

Action step

👉 Set aside 20 min to work on your version of this prompt to get the clarity you need to set your business for authentic growth.

How do people change after engaging with your brand?

Warmly,

Nathalia Montenegro

P.S : Ready to find out exactly what you need to do next to grow your business?

Here's how I can help:

• If you haven't yet - connect with me on Linkedin or Instagram to get weekly insights on aligning your brand and business for authentic growth.

• Want guidance to reposition, realign or consolidate your brand & business? Book a complementary clarity call with me here.

PS2: New here? Read the previous issues of this newsletter here.