How to Build a Winning Brand

Of all the startup brands, Starbucks still represents the gold standard.

Starbucks made the mundane act of buying a cup of coffee into an experience. It did so by creating a memorable brand: a unique name and a memorable logo that made coffee not just coffee, but a welcoming, comfortable place to go and be seen.

The Starbucks brand created a culture. Here's a look at how yours can do the same.

Step 1: Craft your image
Creating a brand perception requires intrusion. You are trying to position yourself with people who don't want to change their purchasing decisions. Your brand must be powerful enough to force them out of their routines.

It all starts with a name. With enough frequency of the message, any name can become memorable. That could be a name that explains, like Jiffy Lube or Toys"R"Us. Maybe it's a made-up word or obscure reference,but one with the power to create a lasting emotional connection (think Starbucks again). Obscure brand names are unique from their competition and often become among the most memorable. It could also be a family name, which implies the person behind the brand name has a credibility to be in this business, a pride of workmanship and a moral standard.

Your logo is just as important as your name. The logo is the first visceral connection the consumer makes with the brand. It triggers the brand perception. The first measure of a logo is that it answers questions: Who are you? What do you do? What's in it for me?

There are other practical considerations in logo design:

• It must reproduce well in various sizes and media.
• It should reflect the sensibilities of the target audience.
• Its intention and message should be perfectly clear.
• It should be easily and uniquely recognizable.

At its best, a logo should convey an emotional connection as well as personality. The cleverness in a conceptual logo should get a reaction--an "aha!" --while conveying what you do and capturing the personality of your business.

Step 2: Get Known
Branding happens in the minds of consumers. The promises behind the brand create its appeal, but getting the word out is still what brings in the customers.

Traditional media exposure--advertising, promotion, trade shows, direct marketing, events, directories and even search-engine marketing--costs money, and most startups don't have much. Social media is a great equalizer for the cash-strapped entrepreneur. Here are some fundamental guidelines for building your brand online effectively using Twitter, Facebook, YouTube, blogs and other social media outlets:

• Listen, don't just talk. The days of saying anything that comes to mind or reporting what you're having for dinner are over. Hear the conversation first, then participate.
• Ask, don't tell. The goal is developing an exchange. Force your opinion and you'll end conversations before they begin.
• Be real, and have a story. Behave in the character of the brand. Give the character depth and be genuine.
• Be interesting, and give. Add to the conversation by offering up whatever knowledge you have.
• Be interested, and respond. Hear a person's need, then share expertise in a personal way that has no motivation other than to help.
• Have a payoff, and say thank you. Reward your followers with something special and exclusive. Appreciate them for following your brand and letting you into their world.

Step 3: Know What the Customer Wants
In launching a business with limited funding, the potential for successfully establishing a brand is far too often based on the zeal of the entrepreneur's belief in the disruptiveness of the unique business idea rather than market intelligence. That doesn't usually work.

To increase your brand's chances for success, you need to know five things:

• How strong is the perception of your brand, and what would make it stronger?
• What is the true level of consumer satisfaction for competitor brands?
• Will your brand introduce emotional connections with consumers who do not currently exist in the market segment?
• What percent of the market will consider change because of the disruptiveness of your product?
• How much awareness can you gain for the brand?

The answers to those five questions will determine your chances for successfully branding your product. There are various methods for conducting consumer research, like focus groups and e-mail surveys, that determine what would make a consumer recommend your brand to a friend. If cost is a crippling concern, you must at least go out into the market, observe consumer behavior over a relevant period of time and keep tallies of each type of consumer behavior.

To succeed, you need to know what is the true perception of your brand, how many people hate it, how many it appeals to strongly enough that they would advocate for it and how that acceptance stacks up against the competition. The most successful companies pick a competitive position from which they know their brands can win.

Brand Win: Go Daddy
Branding experts groan every time they see a Go Daddy Girl in a tight white tank top appear on their TV screens, which happens between 500 and 900 times a week on cable. The company's edgy branding strategy has little to do with the very unsexy business of domain registration and website hosting, and Go Daddy acknowledges that its suggestive marketing alienates part of its potential customer base.

But it's hard to argue with the results. In 2005, the company had 16 percent of the new domain name market. After Go Daddy aired its first Super Bowl commercial that year spoofing Janet Jackson's wardrobe malfunction in the previous Super Bowl, its share jumped to 25 percent within weeks. Six years later, Go Daddy owns more than 50 percent of the market of new domain names, and the company is a household name--even if a big chunk of people still don't know exactly what it does.

"It sounds so simple, but if something works, I keep doing it, and when it doesn't work, I stop," says Bob Parsons, Go Daddy's founder and CEO, and the brains behind the brand strategy. "The edgier the brand is, the better it works. The point is to keep it fun."

In reality, though, Go Daddy's branding--including the unusual name and the child-like logo of a man with sunglasses and a star on his head--is classic advertising. It creates curiosity and promotes name recognition, something most tech services have never done well. But what really defines the company's success is what customers discover once they are enticed to learn more.

"None of this stuff with branding is going to work if you can't deliver," says Parsons, noting that of the 3,000 people on the payroll, 1,800 work in customer service. "We provide the best service of anyone in the world. We even call customers to thank them for $10 purchases."

Go Daddy has tried other advertising routes, including one appealing to busy moms and another touting its U.S.-based call centers. Neither pushed people to the site like the edgier Go Daddy Girl commercials, which this year feature NASCAR's Danica Patrick and fitness guru Jillian Michaels. Parsons says when the provocative advertising stops working, he'll try something different. Until then, his girls will keep teasing NFL fans and late-night cable watchers.

"We've taken domains and websites, which is about as exciting as a cup of sawdust," Parsons says, "and made people pay attention."

Brand Fail: Fit Fuel
In 2006, major magazines were featuring Sean Kelly and Luke Burgis as two of America's entrepreneurial wunderkinds. The duo's business, Fit Fuel, was on the fast track to becoming the next big online retailer. But by 2009, the next big brand in fitness was no longer even a brand. Somewhere between the accolades and fast growth, the company lost its way, and a big piece of the downfall was bad branding.

Fit Fuel was conceived as a service to help vending machine companies stock their slots with healthy choices instead of chips and soda. But soon after launch, Kelly and Burgis realized the majority of their customers were not other businesses, but regular Joes looking for good prices on PowerBars and trail mix. They ran with it, reshaping the company into a fitness product e-tailer. Growth was exponential, bringing in $5 million per year at its height, and in 2007 they moved to a giant warehouse in Las Vegas and jumped from five employees to 20.

That ramp-up proved to be the downfall. Fit Fuel was shifting from selling nutrition products to stocking all things fitness, including books, exercise equipment, apparel and sexual enhancement products. "We were like the Amazon.com of fitness," Burgis says. "But people were confused about who we were, and we didn't have capital. We couldn't survive a price war."

In 2008, Sean Kelly left Fit Fuel to focus on the healthy vending machine concept, and Burgis was left to figure out the company's direction. He started modeling his business on shoe e-tailer Zappos, thinking a hip, service-oriented company culture could define his brand. Burgis renegotiated his contracts so they could offer two-day shipping. Customer service was impeccable. But it didn't resonate with shoppers.

"It was what I wanted the company to be, not what customers wanted," he says. "We put our marketing energy into the wrong things, and we were carrying way too many products."

By mid-2009, after failed takeover negotiations with Zappos the year before, Burgis declared bankruptcy, and Fit Fuel was shuttered. But the experience didn't go to waste. Now at his new venture ActivPrayer, a company that trains coaches to run Christian-focused group fitness classes, Burgis is very keen on what his customers want, and the brand lines up with his strengths.

"Customers are very interested in who we are and in how we do business," Burgis says. "At Fit Fuel, they just wanted their product in a reasonable amount of time. They didn't care if I was a good guy or not." 

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the April 2011 print edition of Entrepreneur with the headline: How to Build a Winning Brand.