In this age of digital abundance, companies are finding it increasingly difficult to differentiate and stand out. The connections in the digital world are so easy that a product or service is exchanged between various hands at the same time. There are frequent new entrants and copy-cat businesses in this digital world due to extremely low entry barriers. Many times, neither the businesses have a clear product positioning nor the consumer really understands what this product or company stands for. In this process, companies tend to become everything for everyone or nothing for anyone.
The plug and play nature of digital products is disintegrating established value chains. The go to market time in the digital world is also small which further makes it difficult to remain 'unique' for a long time. Digital businesses interact strongly with each other through APIs and the consumers many times are consuming a mesh of such API. There is an app of apps, a platform of platforms and a 'horizontal' of many 'verticals'. The network effect of consumers, suppliers and talent in the digital age creates almost perfect monopolies thus making it very difficult for small players to survive. In such a scenario, building a brand as your key differentiator is much more critical than ever before.
Digital age provides almost perfect transparency in prices, services, product details and more. It’s easy for consumer to switch among products or services with few clicks and swipes. The result is faster commoditization in most products and services leading to a price war and pressure on ROI. Most of the business sectors have lost the advantage of arbitrage they once had from information asymmetry. Consumers would always love continued low costs but that would not serve the purpose of any business in long term. The ability to offer uniqueness in product for most of the companies is very short lived. It’s just a matter of time, when a product or service is replicated well by other companies. Earning loyalty is tough from these fickle consumers who have access to array of choices from across the globe. Thus, it’s a vicious circle where easy entry or production is leading to low consumer loyalty or brand recall. The attention span of the consumer has come down drastically making it very tough for companies to create long term brands.
In the digital world of low cost sameness, businesses need to find the emotional connect as their best differentiator. Due to the very virtual nature of digital businesses, the best way to connect with a fickle consumer is to bring a human emotional feel in the offering. When digital sameness drives out your margins, eliminates your differentiation, and commoditizes your offering, the need for creating a brand through strong emotional connect becomes very important. In the digital connected economy, people talk about what they love and not what they like.
Many young businesses today, in a quest to grow too fast, don't give due attention to brand building. While growth hacking and technical ways of growth are required, one should not take away the importance of brand building. Growth hacking techniques should be done from a lens of brand building. Short term and trivial metrics through growth hacks should not affect the long-term goal of a brand. Marketers and businesses should note that growth hacks, technical or digital marketing are just ways for growth and marketing and should be integrated well with the overall brand building exercise. While growth hacking and growth marketing techniques will give you the likes, but it’s the brand that’ll give you the love.
One should understand that brands can't be build overnight. It’s a philosophy and one need to live it every day in different aspects of product, design, marketing, customer delight, packaging, advertising, pricing and much more. Moving brand from being an external factor to an internal one requires a change in mindset. A holistic and conscious approach in offline and digital media (paid, owned and earned) through every touch point with business stakeholders like consumers, suppliers, employees and investors, one can build a good long term brand.
Humans love listening to stories from childhood. Finally, we are all social animals with simple stories as the easiest way of communicating, expressing emotions, and perceiving the world around us. Businesses also need to integrate storytelling as one of the key brand building exercise. Stories have always been part of any brand building exercise, just that the media format of these stories keeps evolving with time. Earlier it was more of TV, print or Radio; now digital becomes a key additional channel. As Scott once said, A brand is a story that is always being told.
The romance of brands is amazing. It is as relevant in the digital era as it was before. As someone rightly said, products are made in a factory, but brands are created in the minds. It’s easy to replace products but not so easy to replace a brand. So, if you need love in this age of likes, focus on building the brand. Building brand relationships is the ultimate love story of any business.
—by Manoj Agarwal, Co-founder, Xoxoday....