Blog Dec 3, 2015
Brand Investing for Startups
8 Reasons Branding Matters in the Early Stages
On several occasions, I've gotten to experience what I can only describe as the startup rush – that shot of adrenaline our team feels when meeting with a new client preparing to enter the marketplace. It's inspiring to witness the undeniable gleam in a client's eyes and their sense of determination as they share how their product or service will succeed in winning over customers and investors in a competitive landscape.
These startup clients already have a strong advantage – they recognize that branding is not a luxury, but a vital investment of their capital. As soon as they had enough business capital to start actualizing their vision, they invested in branding right away, knowing that creating a brand that represents what they do conveys stability, shows they understand their target market, and leads to potential investors and customers taking notice.
From the investor’s perspective, strong branding at the outset ensures that their investment has a better chance to succeed. Startups with a clear brand identity and strategy convey strong leadership, clear vision, and a solid understanding of the target audience. Outside of winning over investors, when asking startups why they'd made the decision to work with us on brand development from the start, I’ve received very similar responses – and, in the end, witnessed the same positive results.
8 Reasons to Invest in Branding at the Beginning
1. Setting Yourself Apart
Differentiation is the key to survival as a startup. No matter how great the product or service, there's inevitably going to be someone else working in a similar market territory. "Communicating what makes your version more attractive to your audience than that of your competition should start at the beginning stages of prospect engagement. When you are new to the market, your target audience has little idea who you are or what you have to offer. In the absence of a strong track record, startups require the right brand message – an intangible asset – to compensate for the ‘tangibles’ a more established competitor already offers," advises Joel Warneke, Matter's Austin-based co-founder and Executive Creative Director.
2. Brand Equity Traction
It’s a lot easier to build a brand into your startup’s DNA from the beginning than it is to graft it on later. Early efforts spent educating the market builds the traction and momentum your business needs to take off. Eventually, your brand's traction in the marketplace provides you with a brand identity that becomes a shorthand representation for a larger idea and provides a strong foothold in the marketplace, regardless of the competition. This ideal market position can best be described by Warren Buffett when evaluating a company's future performance, “In business, I look for economic castles protected by unbreachable moats.” The castle is a metaphor for a company, and the moat represents a strong competitive advantage. Naturally, a wider moat offers more protection in the long term.
3. Defines Your Audience
You can only create successful products or solutions when you have a clear understanding of your ideal customers. Developing a strong brand strategy early on should include the creation of each of your buyer personas. This will be an essential blueprint for how best to reach each of your target audiences from the start. If you can uncover your target audience’s needs and the problems that cause them the most stress, you can create solution-driven messaging that keeps them engaged and eventually earns their business. Need help? Download our free guidebook for step-by-step instruction on how to create each of your unique buyer personas.
4. Making the Emotional Connection
Your corporate identity is not just a mark on a piece of paper. Your brand is an entire framework for building and sustaining your company’s relationship with your customers. In today's hyper-competitive world, developing a brand strategy that mixes both the rational and emotional aspects of your brand will win both the hearts and minds of those people you are trying to capture. A meaningful brand strategy can help everyone understand why YOU matter and why they should care. This benefit must be relevant, differentiating and believable. The most successful companies out there distinguish themselves by having a strong understanding of why they do what they do. The answer is never ‘to earn money.’ The answer comes from asking – What made you decide to start this company? What do you bring that others don’t? And why should people care?
Simon Sinek, an author best known for popularizing the concept of "the golden circle" and to "Start with Why," powerfully encapsulates this idea through his TED talk. Click here watch this video.
5. Branding a United Force
Extraordinary things happen when an organization embraces a purposeful brand strategy. It drives new attitudes, beliefs and behaviors across your team. It makes your workplace more productive. It changes how people experience your brand. When companies adapt their behavior to live up to their brand promise, people notice – and that’s exactly the result you want.
6. Alignment of Strategies
Trust in the collaboration process between you and your brand agency by aligning your brand strategy to your business strategy. Greg Fehrenbach, Matter's VP of Client Engagement suggests, "When possible, avoid keeping your business strategy under wraps when developing a brand strategy with your agency. Your agency will create the right brand strategy if you're sharing your goals and objectives with them." In today’s crowded marketplace, brand strategy and business strategy have to work hand-in-hand.
7. Not One and Done
Once created, your brand should never be on autopilot. Even with the most thorough market research or clearest brand vision, new companies are still at risk to be challenged and evidence may determine that modifications will need to be made. Matter's Executive Creative Director, Joel Warneke, cautions clients, "If you’re not controlling your brand story then your audience will. Your brand has a reputation whether you’re driving it or not. Monitor and evaluate it. Do more of what’s working and less of what’s not. Steward it, refine it, and strive for conscientious improvement." Sure, you want to get the branding down right out of the gate, but be realistic that adjustments may need to be made along the way.
8. Spend Wisely
Ensure you allocate enough of a budget to do your brand justice. Don’t spread your brand and marketing dollars too thin – it’s better to do a small number of things well than to do a lot of things and compromise the effectiveness of the message. In his article Marketing Budget: How Much Should Brands Spend? author and leading expert on brand management, Brad VanAuken, suggests the following allocated amounts, “The general rule of thumb is that consumer product companies should be spending between 6% and 12% of revenues on marketing, while B2B companies should be spending between 2% and 6% of revenues on marketing… Companies that are launching new products or brands or entering new markets often spend up to 20% of their revenues (and sometimes more) on marketing. And many upscale, high image consumer product brands also spend a significantly greater amount of their revenues on marketing.”
Our team at LEAP Matter takes a proactive role in helping our clients prioritize and map out a strategy to grow their brand within their budgetary guidelines over time. Mindfulness of our clients' budget allocation for branding efforts is one of the key reasons we have a solid history of client retention.
From strategy to implementation, consider LEAP Matter when defining the true, authentic purpose of your brand from the start, it will be well worth your time and resources.