Understand your customer needs using Branding Three Circles concept
By: Fiona Livingston
Tags: Marketing Strategies, Business Strategy, Customer, Branding Strategy, Marketing Model

What are the three branding circles and how can it help develop your brand?

Example of the three branding circles

It is crucial to consider your brand’s competition when formulating or refreshing your brand plan and to assess whether your services meet your customers’ needs.

The first step is to look at comparing the services or products that you offer so you can see your Points of Difference (services/products that make you different) or Points of Parity (services/products which are the same as your competitors) compared to your competitors. Points of Parity should not be seen as a negative, as these are the elements that a brand needs to have to be considered in the eyes of the customer and included in their buying options.

A great tool to help you understand how well your services meet customer needs is the Three Circles model (Davis and Urbany, 2007). This model helps you to assess your brand strategy by using three simple circles: one for what customers value, one for how customers perceive the company’s offerings, and one for how customers perceive competitors’ offerings. The overlaps of the circles provide the most valuable insights.

The first circle represents the company’s view of everything they think their customers want or need.

The second circle represents the company’s view of how customers perceive their services. The extent to which the two circles overlap indicates how well the company’s offerings are satisfying customers’ needs. Customers’ unexpressed problems can often become a source of growth, so this overlap should be considered carefully.

The third circle represents the company’s view of how customers perceive the offerings of the competition.

Each area within the circles is strategically important, but A, B, and C are critical to building competitive advantage. Ask questions about each of these. For A: How large and sustainable are our advantages? Are they based on distinctive capabilities? For B: Are we delivering effectively in the area of parity? For C: How can we counter our competitors’ advantages?

You should form ideas about the company’s competitive advantages and test them by asking your customers. The process can yield surprising insights, such as how many opportunities for growth exists in the white space (G) this shows your customers desires, wants and needs. Another insight might be what value does the company or its competitors create that customers don’t need (D, F, or E) known as Disequity (things which customers are dissatisfied with) and the Swamp (things which you think your customer wants which they have no interest in). These two areas show activities which should not be prioritised.

Surprisingly it is often area A, thought of as hugely valuable by the company, turns out to be minuscule in the eyes of the customer.

Indicators that your point of difference is a success would include increased customer benefit and brand loyalty.

The Three Circles model is significant in understanding that what you are offering meets your customer’s needs, shows you what they don’t need and whether you are meeting basic needs.