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Richard Branson on Winning Customers' Trust

The British billionaire on how his publicity stunts helped build the Virgin brand.

Editor's Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. What follows is the latest edited round of insightful responses. Ask him a question and your query might be the inspiration for a future column.

Q: I recently became my own boss, joining forces with my brother, who has an established operation. I am very much enjoying this experience, but the challenges of finding ways to draw attention to our business and earn customers' trust are extremely tough.

Drawing a distinction between a businessman (who usually has money as his goal) and an entrepreneur (whose goal is to create), if you had to choose one element, or perhaps strategy, that defined your success as an entrepreneur, 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. It sounds like you and your brother have chosen the path to entrepreneurship rather than business as you work to create something that will make everyone in the company proud.

But 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 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 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 not 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 Airlines, Sir Freddie Laker, the late veteran aviator, gave me a key bit of advice about the importance of getting noticed. He said that Virgin did not have the budget to compete with mainstream brands, but clever use of challenges -- such as our attempts at setting world records for crossing the Atlantic and Pacific by boat and balloon, many of which were successful -- and humorous stunts and ads 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 e-mail 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 humor, 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.

The author is an Entrepreneur contributor. The opinions expressed are those of the writer.

Richard Branson is the founder of Virgin Group, which consists of more than 400 companies around the world including Virgin Atlantic, Virgin America and Virgin Mobile. He is the author of six books including his latest, Like a Virgin: Secrets They Won't Teach You at Business School (Portfolio Trade, 2012).
 
Questions from readers will be answered by Richard Branson in future columns. Please include your name and country when you send your question to BransonQuestions@Entrepreneur.com.
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