Like a Virgin

Q: I recently became my own boss, joining forces with my brother, who has an established operation. I am enjoying this experience, but finding ways to draw attention to our business and earning customers’ trust is extremely tough.

Drawing a distinction between a businessman and an entrepreneur, if you had to choose one thing that defined your success what would it be?

—Randall De Freitas, Trinidad & Tobago

A: Congratulations on your new venture! Working for yourself and your family can be a rewarding experience.

At the same time, setting up a new business is tough, and most fail within the first year – usually thanks to a poorly executed plan, a lack of public awareness and/or a shortage of money. At the beginning of my career, I always tried to address the first two problems by ensuring that we had a great product or service and that everyone knew about our businesses because of our great publicity and cheeky advertising.

I believed that if we addressed those two critical issues, it would be easier to tackle the third challenge: generating enough cash to keep the business going. On the whole this method worked, and, as Virgin expanded, we set up new ventures when we felt we had a great business plan and could successfully challenge lazy market leaders in a sector that was ready for shaking up.

In assessing where Virgin has not got it right, a clear pattern emerges: our businesses didn’t succeed when the Virgin difference was much harder for customers to grasp – when we launched products such as drinks, cosmetics and clothing. These Virgin businesses had limited marketing budgets and distribution channels compared to their well-established rivals and, because of the differentiation problem, found it difficult to create lasting awareness of and interest in their products.

By nature, I am anything but a numbers man, so I did not measure the success of a new venture by the amount of money we made. In Virgin Music’s early days, we wanted to create great places to listen to music and meet friends. My sense was that if our staff liked our stores, there was a good chance our customers would too. At Virgin Records, we had a similar attitude. On principle, we would only take on bands and artists that we thought were fun to work with – which meant we signed acts like the Sex Pistols and the Rolling Stones. Then we would create a stir about them.

This brings me to a secret to lasting success: securing your customers’ trust, which should be part and parcel of your differentiation and marketing. At Virgin, we first did this somewhat accidentally, by relying on openness and simplicity when we communicated with our customers. Since we’d created companies everyone on staff was proud of, we were all deeply concerned about quality and customer service, and our marketing focused on why the businesses were different and special.

Tying my name to the Virgin brand also helped to foster a sense of brand accountability. When I was preparing to launch Virgin Atlantic Airways, Sir Freddie Laker gave me a key bit of advice about the importance of getting noticed. He said that as Virgin did not have the budget to compete with mainstream brands, the clever use of challenges – such as our attempts at setting world records by boat and balloon – would help to raise the airline’s profile.

The strategy worked. We often made the headlines while spending a fraction of what our rivals did on marketing. This also meant that we put a face to our brand early on. I also encouraged customers to email me directly and advised our CEOs to do the same, which strengthened our ties with the customers.

Over time, this seems to have protected us from taking on many of the bad habits of large companies. Our emphasis on service, keeping a good sense of humour and on making sure our employees ‘own’ the businesses has helped us to build relationships with our customers. Over the years, we have won their trust, and their confidence gives us added impetus to give back in return.

Many of our advertising campaigns play off this open, frank communication. Our mobile phone companies offer straightforward bills with no hidden charges; our credit card agreements are easy to understand; our health club members are not locked into lengthy contracts.

In the current business environment, it may be tough not to focus solely on the numbers, but I believe this strategy of differentiating and marketing your product with a view to winning customers’ trust is the only way to build a sustainable, lasting business. If times get tough, do not lose heart. You have already identified your key challenges, so just keep your message simple, direct, honest – and very public.

If you do, you and your brother should go far.