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Why Do Startups Need Branding Anyway?

Because without it, they’re just a small business with a (potentially) great solution that no one has ever heard of and most likely will never buy. In the words of Philip Kotler, a marketing guru: “The art of marketing is the art of brand building. If you are not a brand, you are a commodity.”

A brand is what makes us buy a specific TV, even though we know they were all manufactured at the same factory, and what makes us prefer one specific home finance app within the ocean of innovative, smart, disruptive, and user-friendly home finance management apps.

I’m sure you’re not convinced yet, so let’s dive a bit deeper and find out what branding can do for you and your startup.

 

You’re not an exception

First things first: there are no exceptions here. All types of startups—big and small, B2B and B2C, FinTech and those for social good—should have a brand in place. Why?

Because no matter what you’re selling, you’re selling it to human beings (yes, even B2Bs as well; businesses are still run by humans) and we humans are funny little creatures; while we think we’ve got it all under control and that we are making all of our purchase decisions logically and cold-hearted – we really don’t.

Prof. Dan Ariely, a behavioral economist and the author of ‘Predictably Irrational’, has been researching humans’ irrational behaviors and decision making for many years and has proved beyond any doubt that we are not fully in control of our own decisions (here’s one of his talks about it). All of us (yes, even you) are affected by external influences, some of which we’re not even aware of, and are making irrational decisions every single day. Brand is one of these external “forces” that makes us prefer / buy / stick to a very specific product/service, even when we don’t have a so-called “rational” reason to do so.

The startups and innovation landscape has started to acknowledge this power of irrational behaviors, and in the past 2 years, I have met more and more startups, entrepreneurs, and even VC funds that put that knowledge into practice. A great example is Follow [The] Seed’s Raving Fans® algorithm that was designed to detect irrational users’ behaviors in order to identify successful B2C habit-forming products and services at early stages.

It’s not all black and white.
Our decisions are more irrational than we’d like to think.

 

So what can branding do for your startup?

The list is endless, and your time is limited, so let’s just focus on a few key aspects of it, but please bear in mind that there’s much more to it.

1. It will DIFFERENTIATE you from your competition

Most startups rely on their unique features/benefits to distinguish themselves from similar products/services in their category, and rightfully so. However, all of their unique benefits are merely a list of features, which will never be manifested without an appropriate brand to wrap them up nicely.

A good brand strategy will promote your USP (Unique Selling Proposition) and your competitive advantages by articulating them to your audience. In other words, it will differentiate you from your competitors, and in a saturated environment, that is one of the main keys to customer acquisition.

To better explain that point, let’s talk about having a burger in Las Vegas.

Without ever being to Vegas, I’m pretty sure that the place is packed with over-the-top themed restaurants that offer too little food for too much money.

Yet, one place called The Heart Attack Grill seems to get most of the attention. They constantly get media coverage, their social pages are bursting with positive feedback – and, of course, their place is always packed with tourists (and locals) looking to get a piece of that cardiology hazard burger!

Their branding, though questionable and sleazy, has helped them to differentiate themselves in a very saturated environment where every other restaurant offers a cool & gimmicky theme. They could simply go with the “features” of huge burgers and sexy waitresses, but they leveraged their brand by addressing every consumer touchpoint, making sure their customers’ “Heart Attack” experience is flawless. They named their dishes “Double-Bypass Burger” and “Coronary Dog”, they dress their customers up in hospital robes, and they even offer free meals to people who weigh over 350 pounds (and who agree to weigh themselves on a livestock scale in front of a cheering crowd!!!).

If you’re still here and not completely shocked with what you’ve just read, I’m sure you got the point. A burger is a burger after all, but it’s the total experience that creates the brand. That’s what differentiates your product/service and makes your features unique, even if they are similar to your competitor’s.

 

It’s different, alright…

2. It will help people REMEMBER your solution when they really need it

How many startups do you know that offer analytics solutions? Can you name all of them? Chances are, you probably know / have seen / have heard of at least 10 of them, but when asked to list them, you had about 2 names that immediately popped into your mind. Relax, you’re not getting old or senile – this is simply how the human brain works.

Without getting too much into the Brainiac side of things, for us to create a memory of something (anything), we need to:

1.     Pay attention to it

2.     Involve at least one of our senses (a thought alone is usually not enough)

3.     Determine if it’s worth remembering or not (this happens almost automatically in our brains)

If you want people to remember your solution when they’re looking for one (they might have seen it before, but will need it a year from now), you’ll need to tap into their emotions, senses, and feelings, and with all due respect to your feature list, it’s not going to cut it 😉

We don’t remember or talk about features alone; we talk about how these features can benefit us, and a good brand will manifest exactly that.

And of course, there’s repetition – the more we’re exposed to something, the better the odds that we’ll remember it and will easily retrieve it, as long as the message is persistent and coherent (like a well-structured brand).

3. It will help you REACH your target audience more easily

The best way to reach your target audience is to find them where they are and approach them in their lingo and with a relevant offer at the right time. Brands make it easier for you to do so, as they are built with their prospective audience in mind, all the way from their name, logo, images, and color scheme down to the tagline, messaging, relevant verticals, distribution channels, etc.

Approaching your audience with a new product / service without having a deep understanding of who they are and what their current preferences and pain points are is like a shot in the dark. It’s a gamble, and losing this one might cost you more than just money, as the wrong message might offend or provoke some people or simply create the wrong first impression of your business (for me this is the biggest loss, as trust and likelihood are the hardest to regain).

While big corporates have the budgets to allow the trial and error methodology, lean budget startups don’t have this luxury. They have to be more cautious with their marketing expenses, very precise with their marketing choices, and make the most out of every dollar.

A well-structured and coherent brand work keeps your marketing efforts on the right track, as it optimizes every (potential) customer touch-point. It prevents you from reaching an irrelevant audience and helps you reach your relevant target audience more efficiently (meaning, in a way that is most likely to convert them to actual paying customers).

4. It will help you gain their LOYALTY

Gaining new customers is not enough; you need them to keep coming back for more, and if you really want this thing to fly, you need to gain their loyalty.

Loyalty goes way beyond just re-purchasing (or renewing their subscription, for that matter). Loyalty occurs when customers constantly purchase products from a specific brand, regardless of convenience or price, meaning that it will be very hard to make them switch to another brand. That is where you want your customers / users to be.

In a recent US study conducted by Accenture, more than half of US consumers stated that they have changed brands/providers in the past year, meaning that their loyalty is no longer as strong as it used to be. Why? Because the “traditional” methods for driving brand loyalty (such as ‘low price’ and ‘reliable service’) are no longer effective – customers are looking for something more than that to declare their loyalty to a certain brand.

For example, research has found that 49% of U.S. consumers feel loyal to brands that present them with small yet PERSONALIZED tokens of affection, such as personalized discounts, gift cards, and special offers to reward their loyalty. Similarly, 51 percent are ‘loyal to brands that interact with them through their preferred channels of communication’, and a whopping 81 percent ‘feel loyal to brands that are there when they need them, but otherwise respect their time and leave them alone’.

In other words, you can send automated emails to your customers, create online ads to target them on FB, and even offer various discounts and special offers, but without a relevant brand strategy behind that—one that will make them feel like you really know them and make them feel closer to you—the chances of them becoming loyal to you are slim.

5. It will make you LOOK BIGGER than you actually are (think about your potential investors)

I’m sure you know what I mean here… being a small / lean-budget / bootstrap / early-stage startup is like being invisible, and the worst part about it is that you don’t have the required resources to make it look bigger. Most founders say: “OK, let’s work on growth, and we’ll prove it through that”, but I think they’re missing the point. It’s like saying, “I’ll come to the job interview wearing my pajamas and I’ll buy a proper suit once I get the first paycheck”; it’s simply not going to work.

It doesn’t matter how small your startup is – even if you’re 2 people, you can look bigger, more serious & reliable, and definitely more appealing with a well-structured brand around you. It doesn’t have to be a state-of-the-art design and a 50-page brand book at this stage; start with a simple document that articulates your colors, typefaces, logo, tagline, and key messages AND STICK TO IT. Coherency is the way to build a brand that truly serves your company, so start now – it’s never too early.

Lee Linden
Lee Linden
Co-founder of Flint & Spark- entrepreneurial marketing and a brand & marketing strategist with over a decade of experience in marketing, advertisement, brand management and business development.

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