A client who should know about these things, having owned a very successful restaurant as well as being a food critic, told me recently that the bare minimum a new restaurant should think of spending on a fit-out should be a million dollars. “That’s what it costs to open a restaurant in Auckland” she said. Well, of course, if you are talking about Auckland, where the decor is often more important than the food, then yes – it makes sense there is a threshold of how little you can spend.
But it raises a very important question – how essential is presentation to the success of your business? I think I can actually put some numbers on that. We have had three experiences in recent years where clients have cashed up after starting a business and in each case running it for anywhere between five and ten years. One client, whose business we named, created a logo for, and even went and negotiated for the supply of his product with him, sold his share of the business four years later for $21 million. Another client, who we worked with over a longer period of time (six years), designing his logo, his catalogues and advertising, sold his share of the business for $14 million. What was common to both businesses was that they were start-ups, with a business idea that was clearly understood, and brand identity that stood out and made them look like market leaders in a very short time.
The third client, who I can name, but am not at liberty to provide figures for, was Omnigraphics. Omnigraphics is a large format and billboard printing company that was started by Chris Ralph. Chris recognised the need for a New Zealand printer of billboard skins about fifteen years ago. Until Chris started the company every ad agency used to get its billboard skins printed in Australia, and flown over. The genius of the Omnigraphics brand, which Chris started about five years before he met us, was that he branded the company so that it was as sexy a brand as an ad agency. When Chris’s sales reps called on a production manager, they drove up in a cool car, wore a cool polo shirt and handed over a cool business card. They felt proud of what they were doing and who they worked for. If they took the ad agency out to lunch it was to a hip restaurant and not the local public bar. This was a big breakthrough at the time, and it helped make Omnigraphics the most preferred billboard printer. Within a few years the Australian printers didn’t even bother to compete for the New Zealand business – Omnigraphics were just too good. When Chris sold the company five years ago he sold it for a premium, not just because they had the capacity and the sales to prove it was a good business, but also because it was an attractive brand that the new owners believed was a winner. Chris by that time had started Omnigraphics in Australia, and the value began building all over again. And yes, as you would expect the Australian company eventually sold for many times more than the Kiwi one had.
The lesson learned here is that a well conceived brand does create value. The other lesson is that it does not have to cost a large amount of money. Each of the three clients I have mentioned were small companies in the scheme of things, and only one was a regular advertiser. Instead the brand was the equivalent of buying a new designer suit: it built confidence and gave the product appeal. In each case too, the idea of the business and the brand were inextricably linked. Omnigraphics, who knew that the secret to their success would be getting the billboard skins to the ad agencies faster than the Australians could deliver it, launched with the promise “We will deliver half an hour early every time, or we will give you your money back.” Chris only had to give the money back once. But the brand promise, of sex and speed, was one that returned millions when he sold it.