In this article you will learn:
- The perils of not taking a brand development approach before going to market
- How much does a brand cost to build if you’re a Fortune 100 brand?
- How long does it take to build a brand?
- How do I build a brand?
- By focusing on brand building, what will I get in return?
A few years back, we were prospecting a new client who wanted to take their product to market. Like most entrepreneurs/inventors he was extremely passionate and highly persuasive after we invested an hour to hear about his product. We left the meeting with a good rapport and plans to follow up in a week or two with a presentation on we would market their product—that we felt had potential that started with a through brand development assignment.
What was planned to be a normal discover-proposal-execution process turned out to be a series of emails, phone discussions and follow-up meetings that became an out-right argument on our recommendation to take the time to develop a strong brand position first. Because the prospect was asking for an alternative approach: storm to market with an infomercial that would cost the prospect $100,000 to produce, not including the media buy.
Years of experience has convinced me that every product or service needs to develop a brand to be successful.
Whether it’s a cheesy product like the Snuggy or a weight loss product – everything is a brand. A brand is the feeling you get about a product, service or person the good and the bad. Without understanding what the brand is, any business risks hanging their investments on the precipice of failure or mediocrity.
How much does it cost to build a Fortune 100 brand?
- When 64% of the market value of the world’s most valuable brand (Apple) is intangible – shown on the balance sheet as $104.3 billion* in “Brand Value” – there’s something very important here. Think about it – $104.3 billion in real dollar value – this does not include their stores(bricks and mortar), inventory, equipment, factories or people etc. – but rather the economic power of the Apple name and what it stands for – the power to think differently.For revolutionizing the way we work, play, and communicate—and for mastering the ability to surprise and delight—Apple has set a high bar for aesthetics, simplicity, and ease-of-use that all other tech brands are now expected to match, and that Apple itself is expected to continually exceed. (Source: Interbrand)
- The total intangible Brand Value on the balance sheets of the companies that own the world’s top 100 brands is more than $1 trillion!* But this is not just about megacompanies. This is about building intangible brand value in any-size company or organization – building the power to differentiate your brand with such clarity of competitive value that selecting your brand over others is an easy choice. (Source: Interbrand)
How long does it take to build a brand?
The answer lies in the importance, need and positioning of the product to solve a very real problem. Brands like McDonalds, Disney, Coca-Cola, Nike and Microsoft took many years to build – where brands like Google, iPhone, and Facebook took only 1-3 years. No one knows exactly how many millions of dollars were spent on advertising and other business activities, but the fact is if you have a product or service that is truly unique — that essentially creates a new category — chances are you could build a multi-million or billion dollar brand very fast.
How do I build a brand?
For the rest of us – the iPhones, Googles and Facebooks don’t happen every day. That is why we advocate for companies looking to grow that they first focus on the following:
- Solve a Problem (Product/Market Fit )- Does your product or service solve a definite problem with a large enough market to create a business? Does your product or service offer a large improvement on a current solution? Examples:
- Blockbuster Video > Netflix
- Taxis > Uber
- Arcade Games > Xbox
- Retail Shopping > Amazon
- Buyer Persona and Positioning – Define your customers external, internal and philosophical problem. Then use this information to find the “whitespace” in your market where you can stand apart from your competitors.
- Clear Messaging – With all the clutter, noise and distraction in the marketplace, it’s more important to be clear—than cute or clever. Utilizing storytelling in your messaging is a great way to keep your customers’ attention.
- Creative Implementation – Design your name, logo, website, packaging and other marketing collateral around your personas, positioning and messaging.
- Marketing/Branding Tactics: Now drive your brand message through consistent marketing tactics over time like Facebook advertising, inbound marketing, SEO, social media, email marketing, and influencers over and over again till you begin to see awareness and demand for your product or service increase. You can use tools like Google Trends to monitor.
We believe in the brand development process as we have seen what a strong brand can do and how much value it can bring to its customers, brand owners and shareholders.
Typical brand development programs can cost anywhere from $10,000 to $500,000 depending on the size or the stage your company is in. An industry standard for startups is to typically budget 12-15% or more of their initial investment from the onset —while mid-stage to larger companies spend 8% – 10% of total revenues on ongoing marketing/branding. Other sources says to spend less, but with the increasing competition in the marketplace and unprecedented distraction, I advocate for slightly larger budgets to stand out in the cluttered marketplace.
Today’s consumer behavior demands your brand stand for something. Your brand must stand out from the phonies and make your customers believe that what you offer is authentic, special, unique, and trustworthy.
A typical brand development process for a startup looks like this:
By building a strong brand your business will achieve the following:
- Reduction in turnover costs
- Generate more sales leads
- Acquire more customers
- Attract talent
- Foster innovation
- Enhance your company culture
- Delight your customers
- Makes it easier for the customer to buy
- Makes it easier for the sales team to sell
- Brand clarity spurs employee motivation
- Increases the value of your company over time
- A well-developed brand works for you 24/7
- The brand development exercise creates innovation
- Saves money on future design and advertising costs
- Creates preference which equals profit
In end, we presented our proposal, shook hands and left knowing the brand development assignment wasn’t going to move forward. I don’t know where this company or product is now, their website is still not live and they have yet to produce the infomercial they so badly wanted.
Most entrepreneurs don’t take the time to adequately understand their audience and develop their brand based on the people who they want to sell to. They “put the cart the before the horse,” only to find out later that they need to spend more money to go back and fix their brand because they didn’t take the time to do it right the first time.
A present example is PC Matic. Founder and CEO Rob Cheng started PC Matic as a software that improved speed and spent millions on television advertising—only to find out that PC Matic was indeed so much more. Millions could have been saved if PC Matic took the time to understand their brand in the beginning and chart its course. Now they are spending millions on changing course with their rebrand.
In today’s cluttered and attention deficit society, developing a strong brand is key to business success. Without establishing trust and authenticity, you will be just another face in the crowd and spend thousands or millions going in the wrong direction.
5 KEYS ON HOW TO STAND OUT IN A COMPETITIVE MARKETPLACE
Is your brand getting noticed?
In this ebook, we’ll give you 5 keys for 2019 that will help you differentiate and grow your business. We’ll share why it’s important to have a clear brand message, how to build a website that works, a simple marketing plan, how to gather testimonials the right way and a few marketing tactics that offer the biggest bang for your buck.