Why is Branding crucial for Startups?
In today’s world, it has become exceedingly easy to start up a new company. The amount needed to set up a small business has come down to ridiculously low numbers, and with the advancing technology available to everyone, managing a small scale business has become a viable option rather than just a pipe dream.
Unsurprisingly, with these favourable conditions, there has been an exponential growth in the number of entrepreneurs and startups today. People are resigning from their jobs to start their ventures and be their own boss.
Startups, in general, make the massive mistake of ignoring the importance of branding during the early stages of their development. Entrepreneurs obsess over their product, which is also crucial, but overlook researching and defining their target customer and then creating an identity that focuses on the benefits of the product for them, before pushing it into the marketplace. A brand is like a living being - it has its own core values, beliefs, voice, personality, story, character and most importantly soul. As Jeff Bezos said “Your brand is what people say about you after you leave the room”
What is the importance of branding for your startup?
It gives you a unique identity: One of the main reasons why branding is important is that it gives your new organization an individual identity. The brand is not just the logo or even the name or design, it goes much deeper than that. Your brand is the personality of the organization. This is why it is extremely essential that the company chooses and promotes a brand that represents its business methods and core values. Having a clear vision will ensure the success of the startup in the long run. Furthermore, by stating its goal right from the start, it is much easier to follow through on the plans.
Customer loyalty: Marketing is all about influencing the behaviour of customers. Customers are far more likely to be inspired by a brand that offers relevant content with an emotional promise and has an appealing personality, effectively communicated in marketing and sales. To grab the attention of the average consumer, a new company has to devise a unique marketing campaign that sets it apart from its competitors, even more so if you want to target today’s millennials, who are not as responsive to normal or classic advertising, as they want to be engaged with personally. Without customers, of course, a business will fail, which is why it is so crucial to have a brand which inspires loyalty in the customer base.
Sets you apart from your competition: Branding a Startup also helps it set itself apart from the competition. A great brand name is a solid competitive advantage for your company. Creating a good brand identity requires research into the customer base and the surrounding market. This helps companies identify and focus on what it is that makes them unique, and what particular needs and wants they are fulfilling in their respective markets. It also gives them the ability to effectively sell their unique contribution in a variety of new ways to customers who are looking for a specific product or service offered by the startup. A strong brand creates confidence that you are here to stay. By creating a strong startup branding, the company demonstrates that it is ready for the long haul. It shows that the company intends to be one of the recognizable and reliable businesses in the industry, and not just for a short period.
Helps establish a price point: Branding also helps establish a price-point. Shoppers are more likely to shell out extra bucks for strongly branded products and services compared to their peers. Gerald Haltman, Harvard University professor writes in his book, “How customers think: Essential insights into the mind of the market”, that 95 per cent of a customer’s decision-making process happens subconsciously. Therefore, a major reason why a customer will buy your product instead of your competitor’s will largely depend on how the customers ‘feel’ about your company. This is largely important for startups as they tend to have major competitors with a bigger team, infrastructure, and marketing knowledge and this could help the startups standout.
Branding is a necessity and not a luxury: The internet has taken over. With the advent of affordable smart-phones and their widespread usage due to low-cost internet connectivity, branding of products online is no longer a luxury but a necessity, largely due to the shopping habits of the new-age customers. A person is more likely to order a product online than go to a physical store to purchase it (even more important because of the current pandemic situation). Online marketplaces like Amazon and Flipkart also help in fast and convenient shipping, which is getting more effective by the day. Working professionals, due to the lack of time, are unable to go to a physical store to buy products and do a majority of their shopping online.
Investors are drawn to a great startup branding: Having a strong brand and the benefits that come with it make your company more appealing to investors, who are more likely to want to be a part of your growth by investing in your company. Startups need to move towards more sustainable and viable business models. Since they no longer have access to deep coffers and loss-making schemes to attract customers, they need to pull out all stops at retaining and creating new customer profiles to succeed. Just an idea and prototype alone is not going to attract any kind of meaningful funding without a sufficient clientele and a profitable revenue pipeline for their products. After all, if the product is to sell, it has to sell for revenue and profit. This is where branding can play a major role in keeping an enterprise from going bust. Investors will put their money into a more profitable brand than a brand built on discount sales.
Branding in the current business climate is the key differentiator between companies. Customers across the globe are now more aware of their needs and are willing to explore before committing. With online shopping increasing the number of companies that they can buy from, choice is never an issue they face. However, this huge selection of offerings has resulted in a cutthroat competition for companies. In order to be successful, creating a loyal customer base that is instinctively drawn to your products is the only way to survive. A great example of this is Apple. With every product they release, they see a huge amount of existing customers purchasing their latest products even if there isn’t a huge difference in the existing and the newly launched product. Apple is more than just their products. It is a symbol, especially in a country like India. Owning Apple products is considered a status symbol that tests and plays on customer loyalty. Not to take away from any of Apple’s products, but Samsung phones are also amazingly designed, yet the only difference is their brand. Apple has captured a huge chunk of the market purely through branding.
The trend is shifting and more interest is being shown in not just the products developed by the companies but also the other factors such as environmental impact and sustainability practices. Companies that do not meet their criteria fall victim to cancel culture and lose huge amounts of revenue. Established brands have faced the fallout of not living up to their customers expectations. A brand is more than just your logo or a tagline, it is a living entity that grows and learns. It is only natural that people gravitate towards brands that they feel a connection to. Nike, a huge footwear company, came into critique when it showed support towards Colin Kaepernick after he kneeled during the national anthem in 2016 during an NFL game. Nike did not shy away from showing their support and instead stuck to their guns. They believed in Kaps’ right to protest and stood by him, showing their solidarity. In the weeks after, they lost a little of their market value, but they stayed true to the beliefs of their brand which bolstered the trust and compassion of their customer base and were shown appreciation and support. More importantly, Nike is on the right side of history, their decision will always be a reason that people choose to associate with them.
Once a company has decided to create a brand, it is forced to revisit, analyse and focus on the catalysts and objectives of the business. Evolving a brand strategy makes the rocky and unsure journey of startups more manageable by providing a rare far-sighted lens in a very short term environment. Products change, teams transition and customers shift in every company’s journey. Once a brand has been created, the core of the brand remains a constant and everything settles around it. A clear brand strategy provides clarity and acts as a map for the team to be successful and shows them how to meet the organisation’s goals. Creating a brand far outlives the purpose of gaining market share and benefits an organisation in the long run. In future, businesses will be increasingly driven by cloud technologies. It will become easier for newer startups to join the fray. The competition will become fierce and swift changes in offerings will take place. In such a case, Marketing, Branding and Positioning will be of utmost importance. Only startups which are able to reach out to their target customer bases with emotional connect, promising a particular experience and convey trust through effective branding, will survive.