How to build a brand that makes money
How to build a brand that makes money
A brand is a promise. A good brand is a promise kept.
In the late 1990s, mobile phones were marketed for personal use, emphasising the ability to staying in touch with friends and family. This was a generic approach that applied to any network or mobile device. When BlackBerry entered the market, its manufacturers pivoted away from this generic branding. BlackBerry positioned itself as a tool for business by focusing on self-reliance and productivity. By associating the action of using a BlackBerry, e.g. checking emails, with the outcome of increased business efficiency and status, they created a brand identity that resonated with businesspeople who needed to stay constantly connected. At its peak, Blackberry had over 40% US mobile market share.
What is branding?
A good brand should be invisible to the customer. They don’t think about the brand, they think about the solution you provide. - Alex Hormozi
How do companies, such as Apple and Harley-Davidson, get people to become loyal customers happy to pay premium prices over prolonged periods? The answer relates to building strong brands.
Alex Hormozi defines branding in a very practical way. It is the deliberate pairing of an action with a product to achieve a desired outcome. For example, when someone drinks Coca-Cola (action) to quench their thirst and enjoy its taste (outcome), they are more likely to choose Coca-Cola again if the experience is successful.
Bad branding occurs when businesses pair their products with outcomes customers dislike, leading to losses. Bud Light's main market is conservative men. Bud Light ran an ad featuring a social media influencer which received negative press and resulted in declining sales. To recover, Bud Light rebranded by pairing the product with figures their audience preferred, leading to a sales rebound.
Successful branding occurs when a product is paired with an outcome that appeals to the ideal customer, driving engagement and boosting profits. Good branding makes money by creating a strong connection between a product and something customers admire. Customers can't own what they admire, but they can buy a piece of it through a product, leading to increased sales and loyalty.
Why good branding makes money
A brand is the promise of the experience. - Seth Godin
Branding originated from marking livestock with a logo to signify ownership, influencing how people treated the cattle. A branded cow was recognised as belonging to someone, while an unbranded cow was just another animal.
This concept evolved into modern branding, where a strong brand adds value to a product. By pairing our brand with things our ideal customers admire, e.g. sports stars or celebrities, a weak brand becomes strong. This connection allows customers to feel linked to what they admire when they purchase our product, even if they can't own the admired thing itself.
The process, step by step is:
Start with a brand that initially holds no meaning.
Pair it with something your customers like.
The brand becomes associated with that thing.
Customers seek to associate with what they admire.
Though they can't buy the admired thing, they can buy a piece of it through your product.
They purchase the product with the brand, feeling connected.
You profit from the sale.
For example, Dolce & Gabbana paired with Kim Kardashian to appeal to women who associate with fame and beauty. A strong brand drives higher sales and customer loyalty because customers are willing to pay more to feel aligned with what the brand represents.
How to start a brand
Build a brand around solving one big problem for a specific group of people, and make sure you do it better than anyone else. - Alex Hormozi
To build a strong brand, we must deliberately align values, products, experiences and people to attract ideal customers. It’s the repeated, purposeful combination of these elements that creates a brand, not random pairings, which can dilute the brand. Effective pairings strengthen the brand while poor ones can damage it. Branding is more than just advertising; its real power lies in the customer’s post-purchase experience.
Brand effectiveness is measured by its influence (changing customer behaviour), direction (guiding customers toward or away from the brand) and reach (the number of people impacted).
Other resources
Most Powerful Marketing Strategy interview with Alex Hormozi
How to Target a Niche Market post by Phil Martin
What Dave Trott Taught Me About Marketing post by Phil Martin
Alex Hormozi suggests, Brand takes a long time to build, but it’s the most valuable thing that you can own.
Have fun.
Phil…
