Brand building at-scale can be different than brand building for a startup or small business. Nevertheless, smart entrepreneurs and small business owners pay careful attention to important market forces and trends that shape some of the world’s best brands.
WPP and Kantar Millward Brown just released their latest BrandZ report on the most valuable global brands. The 2017 Brandz Top 100 Most Valuable Global Brands report offers important branding lessons for startups and small business.
Before we get to the lessons from the 2017 report, we want to be sure that there’s no confusion about the term “brand.” Some entrepreneurs and business owners believe that a brand is merely their company’s name and logo.
A brand is the sum total of the experience your prospects and customers have with your company. A strong brand communicates what your company does, how it does it, and at the same time, establishes trust and credibility with your prospects and customers. Your company’s brand is, in many ways, its personality. Your brand lives in everyday interactions your company has with its prospects and customers, including the images you share, the messages you post on your website, the content of your marketing materials, your presentations and booths at conferences, and your posts on social networks.
Here are the five key highlights from the 2017 report, containing important branding and marketing lessons for small businesses and startups.
1. Plan For The Future While Focusing On Today.
The most successful brands in the world spend a substantial amount of time planning future products and services. This is important because successful, lasting brands help to anticipate and help to create the future.
For example, only three brands that appeared in the top 10 in 2006 – Google, Microsoft, and IBM – remain in the top 10 in 2017. As the report notes,
These technology leaders demonstrate the ability of relatively young brands, like Google and Microsoft, and heritage brands, like IBM, to be relevant, each in its own way: Google primarily with search and constant innovation; Microsoft with the versatility of its Surface devices and its expanding cloud business; and IBM with its reinvention, cloud focus, and cognitive computing.
Many entrepreneurs and small business owners myopically look only at the present, focusing on short-term profits at the expense of long-term growth and success. Although short-term growth can be tempting, it rarely justifies ignoring long-term goals.
Amazon offers one of the clearest and strongest examples why businesses should focus on long-term goals. Years ago, before Amazon’s Web Services (AWS) and Kindle became as popular as they are today, Amazon’s CEO, Jeff Bezos, offered this insight:
Go back in time when we started working on Kindle almost seven years ago. There you just have to place a bet. If you place enough of those bets, and if you place them early enough, none of them are ever betting the company. By the time you are betting the company, it means you haven’t invented for too long. If you invent frequently and are willing to fail, then you never get to that point where you really need to bet the whole company. AWS also started about six or seven years ago. We are planting more seeds right now, and it is too early to talk about them, but we are going to continue to plant seeds. And I can guarantee you that everything we do will not work. And, I am never concerned about that…. We are stubborn on vision. We are flexible on details…. We don’t give up on things easily. Our third-party seller business is an example of that. It took us three tries to get the third-party seller business to work. We didn’t give up.
Today, AWS is on pace for a $14 billion revenue year – just for one relatively new segment of Amazon’s business.
Are you thinking about the future of your business or is the vast majority of your time focused on today?
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2. Have a Clear, Articulated Purpose.
The most successful brands recognize that today’s consumers have different perspectives about the world compared to earlier generations. As we wrote recently,
Sometimes called “Gen Y”, millennials are the much sought after generation born between 1980 and 2000.
This generation carries impressive buying power, so it’s no surprise that marketers are focusing on understanding and speaking to this lucrative demographic. Millennials are 1.75x more likely than baby boomers (born between 1946-1964) to say they’d like to be brand-loyal, so earning their trust is likely to yield a years-long relationship with your brand.
In fact, millennials will be the recipients of “the largest wealth transfer in history” as baby boomers transfer over 30 trillion dollars of their wealth to their children.
Big Brands recognize this and the most successful Brands have a clear purpose. According to BrandZ:
Geopolitical discord, and the question of whether brands needed to take a stand, made Purpose more important. Consumers, especially young people, expected brands to have a clear Purpose, often a higher Purpose about not only improving consumers’ lives, but even improving the world—or at least not harming it. Purpose needed to be the foundation for future growth, not a retrofitted explanation for past growth.
Interestingly, although it’s commonly thought that consumers are price sensitive, BrandZ found that the brand, not price, was the most important factor in purchasing decisions:
Over half of all consumers—56 percent—said that brand, not price, is the most important determinative factor when they make a purchase, and 30 percent said that they consider both brand and price.
3. Successful Brands Collaborate With Others.
Few Brands have the ability to single-handedly create groundbreaking products or services. For example, we’ve seen a great deal of collaboration in the automotive space, with car companies and communication companies collaborating to improve connectivity, personalization, and safety.
This offers a tremendous opportunity for startups and small businesses to collaborate with Brands. Harvard Business Review explains why such collaboration would be a win/win:
Ironically, startups and established companies would both improve their success rates if they collaborated instead of competed. Startups and established companies bring two distinct and equally integral skills to the table. Startups excel at giving birth to successful proof of concepts; larger companies are much better at successfully scaling proof of concepts.
Startups are better at detecting and unlocking emerging and latent demand. But they often stumble at scaling their proof of concept, not only because they’re often doing it for the first time, but also because the skills necessary for creating are not the same as scaling. Startups must be agile and adapt their value proposition several times until they get it right. According to Forbes, 58% of startups successfully figure out a clear market need for what they have.
In contrast, big companies often end up launching things they can make, not what people want. Successful established companies are focused on increasing scale and are often better at scaling proof of concepts than creating new products from scratch. They have huge advantages in procurement, distribution, and manufacturing, as well as sales and marketing advantages. But they have a challenge not only creating a proof of concept, but leaving it alone until it is ready to scale.
4. Consumer Loyalty Is Decreasing, Requiring Different Marketing Strategies.
More choice, better products, and increased competition across most industries have given consumers the flexibility to try many different products and services. BrandZ explains:
Proliferation of choice, price promotion, and the entrance of niche disruptor brands are among the reasons that loyalty was difficult to cultivate. In addition, loyalty was not always fashionable. For self-expression, apparel customers preferred to mix and match, curating a personal style rather than wearing the same brand or designer head to toe. Similarly, personal care shoppers looking for the newest products chose from a wide selection of brands. Responding to this purchasing promiscuity, brands tried to reach consumers at the exact right moment to trigger a sale, increasingly on mobile.
This trend presents new challenges for startups and small businesses. Techniques that worked well years ago are often failing today.
For example, while price is important for many consumers, it’s not the most important factor. According to BrandZ:
Price is important, but it is subsidiary to brand. Brands should not underprice themselves. Brands that price below their perceived worth sacrifice potential profit and value growth. Brands that price below their perceived worth also signal that they may be low in quality.
Successful companies find a way to persevere and adapt to the evolving economy. For example, smart companies use marketing psychology principles to improve the reach and efficacy of their marketing. Others leverage micro-influencers:
Unlike big time influencers who have thousands or even millions of followers, micro-influencers have a couple hundred to a few thousand followers. They are often less popular, less well known, more niche, but still highly relevant to their respective audiences.
Micro-influencers give smaller businesses an advantage by allowing the businesses to target smaller, more unique audiences.
Importantly, successful companies also recognize the value that strong design plays to help their message stand out. As we recently wrote,
Marketing studies show that the average American is exposed to around 5,000 advertisements and brands per day. Out of that veritable flood, they found only 12 made enough of an impact to leave an impression. You can help your business be one of those twelve through effective, attractive design.
Often when consumers are faced with a decision between things with similar features or benefits, they go with the one that they either recognize or that has a more pleasing design.
Especially today, when consumers are more selective and less loyal, good design helps to connect your brand to your prospective customers.
Great designs use color, layout, and smart font choice to connect to their consumer in meaningful, emotionally driven ways. Incorporating impactful, memorable, and emotional connection in the visual display of your brand is the best way to show the world who you are and what your brand stands for.
Your designs should support the principles you have built your company around, and strive to reach your customers’ hearts (rather than their wallets).
Ultimately, the most successful companies don’t leave marketing to chance. They use science to improve their marketing.
Smart businesses apply science to marketing. Relying on psychological research, these businesses adapt marketing strategies to maximize revenues and profits. When companies unlock the innermost secrets of how and why people buy things, interesting patterns begin to emerge.
For example, there’s good empirical data showing the best times and days to send marketing emails to maximize opens and click-through rates. However, as people have grown to more heavily use mobile devices, the science of email is gradually evolving. New research suggests, contrary to conventional wisdom, that many brands can benefit from sending email campaigns at night.
5. Be Meaningful And Different.
The most successful Brands stand out from the crowd. According to BrandZ:
Since Brand Power is important as a driver of sales and brand value, the logical question is, what drives Brand Power? The answer is Meaningful Difference. Brand Power is a composite of three factors: Meaning, Difference, and Salience.
Brands need to be seen by their relevant consumers as Meaningful— meeting the consumer’s functional and emotional needs in ways that are relevant and create affinity. Consumers are unlikely to consider a brand unless it is perceived as Meaningful. Once they have positively connected with consumers, brands need to stand out from other brands that also have built affinity.
Brands need to create a sense of Difference. They need to be seen by consumers as distinctive, even trendsetting. Difference gives brands their competitive edge. Finally, once brands achieve Meaningful Difference, they need to “amplify” it—by advertising, social media, retail shelf position, and other tactics—to become top of mind, or Salient.
Many of you are familiar with Apple’s Think Different campaign, launched 20 years ago. Since then, Apple has completely redefined its Brand and has enjoyed unprecedented success as one of the world’s most valuable companies – and one of its best Brands. Today, Apple can charge a premium for its phones, laptops and tablets (among other products).
By being meaningful and different, Apple has dominated certain markets. For example, Apple captured 79% of the global smartphone profits in 2016, even though it held only a 14.5 percent global share of that market in 2016.
But what does it mean for a company to be meaningful and different? BrandZ identified 10 characteristics of disruptive, original brands:
How does your company differentiate from the competition? Do your customers and prospects see your brand as meaningful? Of the 10 characteristics shown above, how many does your company share?
I recommend you download a PDF copy of the BrandZ report – there’s much more great insight that we haven’t discussed.
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