Battle of the Brand

Branding, Schmanding

On the other side are those who say focusing on brand is a waste of time and money for a growing company trying to create repeat business in a crowded marketplace. "People spend far too much time early on saying 'I want to build a brand.' Forget about building a brand. Build customers first," says Barry J. Moltz, a serial entrepreneur and author of You Need to Be a Little Crazy: The Truth About Starting and Growing Your Business (Dearborn Trade Publishing).

Moltz says he's seen too many entrepreneurs end up with "analysis paralysis": pondering for months on end what their brands will mean to consumers before they open for business, only to enter the marketplace and find they need a new strategy. Entrepreneurship requires flexibility, say the anti-branders, because your original brand strategy could be completely wrong. Listen closely to your customers, because they will help you figure out your brand. "There are a lot of businesses that start out being one thing and end up being something else," Moltz says. "If you listen to the market, it will tell you what your branding should be."

Azzaro has learned to be flexible with her strategy. Initially, she thought My-Tee's customers were women ages 24 to 38. She's since learned they range in age from 14 to 56. She's also veering toward product lines, such as accessories, that she never imagined the company doing. "You have to go where [the business] takes you," Azzaro says. "Sometimes it wasn't in the plan."

The decision to brand as a growing business also depends on your industry and the size of your immediate market. Branding is less important if you're the only game in town, says Sean O'Connor, vice president of Magnet ID, a brand consulting and identity agency in New York City. But if you own a coffee shop in a small town, and Starbucks moves onto your turf, then differentiating your business suddenly becomes extremely important. Branding can also distinguish small retail companies selling products or services similar in features, benefits and price vis-à-vis the competition. But in other industries, such as technology, customers may not need brand differentiation as much as they just need a specific solution. "If your product doesn't meet the parameters, [technology customers] aren't going to buy from you," says Jim Schakenbach, managing partner of SCT Group Inc., a technology marketing communications firm in Northborough, Massachusetts.

Heavy investment in branding can be the kiss of death for growing companies with limited resources, says Schakenbach, who counsels technology start-ups. He compares modern branding to the 1980s Jack Trout and Al Ries advertising classic Positioning: The Battle for Your Mind (McGraw-Hill Trade), which theorized that companies that win are the ones that best define and capture a particular position in the marketplace. Branding "is positioning strategy dressed up in new clothes," he says skeptically.

Your time is better spent, he contends, figuring out your customers and their pain-that is, the problem they would pay to make go away. Your value lies in the solutions you provide, not your branding. "You can build brand all you want, but if the customer doesn't connect with the fact that this won't make their pain go away, they won't be interested," Schakenbach says. "People don't particularly care what brand an aspirin is as long as it makes the headache go away."

Mike Duda, 35, has built his technology company without a well-defined branding strategy. "As a start-up in B2B, how do you communicate a brand?" says Duda, co-founder and president of Pennant Inc., a Chicago B2B Web site development, hosting and maintenance company.

Duda, who sees branding as the emotional connection companies forge with customers, points to Harley-Davidson as an example of a great brand. But creating a big-name technology brand is different, he says. Just look at Microsoft, which cared more about hiring skilled software developers than creating heavy name awareness in its early years. "[Microsoft] was able to become a market leader. But did their brand get them there? Probably not," Duda says. "In technology, brand evolves over time. People are buying what a technology product will do, not the marketing. Brand can't really deliver value to the customer in the first year of business."

At Pennant, getting referrals from clients was far more important than concentrating on how to build a brand. But Duda says the eight-employee company is reaching enough critical mass to make a branding strategy worthwhile, as it gears up to become one of the top B2B hosting companies in the Midwest. "We're planning to leverage our brand more in 2004. We're working through what that strategy is going to be," he says. "For the vast majority of small businesses, the business takes three years to evolve before you can really sit there and say 'Here's what we do; here's what we're really good at' and build a brand around it."

You Might Need Branding If...
  • A big, well-known competitor moves onto your turf. The Home Depot moves into town. How will you differentiate your small hardware company? It's the question that's killed Main Streets all over America. Figure out the one thing that sets you apart from this business behemoth, and center your marketing around it. (Hint: It probably won't be price.)
  • Your products or services are very similar in features, benefits and price to the competition's. The more interchangeable your offerings are with the next guy, the more you need a "hook" to get people into your store. Is your hook great customer service? Free Wi-Fi access? A complimentary doughnut with purchase? Find it, and tout it.
  • You're expanding into new towns where people don't know your company. Your local customers know you already, but people in other towns don't have a clue what you're selling. This is a good time to educate them about your purpose and mission.
  • Employees don't have a consistent way of dealing with customers. Are employees all over the map in the way they approach, help and resolve customer questions and problems? A strategy can provide consistency and build your brand.
  • Customers can't sum up your product or service in one word. Great brands can be summarized in a word or two. Nike? Running shoes. Microsoft? Software. FedEx? Overnight delivery. Ask your customers to summarize your product or service in one or two words. If they can't do it, you need to work on the messages you're sending in the marketplace.

Chris Penttila is a Washington, DC-based freelance journalist who covers workplace issues on her blog, Workplacediva.blogspot.com.

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This article was originally published in the March 2004 print edition of Entrepreneur with the headline: Battle of the Brand.

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