Philadelphia retailer John Wanamaker supposedly said “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
For any business, digital or non-digital, brand is one of the most powerful moats that provides defensibility to the company. Brand often provides sustainable competitive advantages that the business needs and renders the competitor’s most effective weapon (pricing) useless. After all, it can be very difficult to compete with and win against a brand that people love. Building a brand is not only about attracting customers and driving sales, it is also about building the competitive immunity the business needs.
There are several startups within the Accel India portfolio that have created new categories in India and eventually gone about to be category leaders globally. Companies such as Flipkart, Myntra, Swiggy, BookMyShow, UrbanClap, Bluestone, etc. have become household names in India.
In this article, we will uncover how these companies achieved this humongous task of becoming category leaders and building strong brands. (It goes without saying that we have learnt a lot from companies such as Bluestone, Flipkart, Swiggy, UrbanClap, etc. in this journey. A lot of credit for the following goes to the brand leaders in these companies for leading the way and helping us put together this framework.) Through this, we will outline how digital-first startups can go about building brand and creating long-term moats — i.e., achieving a position where one can enjoy customer loyalty and (to an extent) insulate oneself from the price wars.
When we analysed various brand marketing activities Accel portfolio companies undertook, we realised that the path was strewn with not only successful campaigns but also several unsuccessful campaigns that did not yield the desired impact and didn’t move the needle on brand and business metrics.
In our quest to understand what makes some campaigns work but others fail, we analysed the creative aspects of the campaigns as well as the share-of-voice achieved by those campaigns. After analysing the creative quality and the spends associated with these campaigns, we realised that these were not the reasons for their failures. There were a couple of campaigns that were executed beautifully on the creative front; however, they failed to resonate with the viewers.
We further analysed brand campaigns based on their messaging and clustered them into four buckets — Engagement, Transaction, Perception and Bonding. In these buckets, we noticed there were some campaigns that were successful while some which were not as successful.
Brand messaging buckets:
In this type of messaging, the brand focuses on getting the users to be aware of the brand with the objective to get them to engage with their product and explore the offerings, without focusing too much on the try and buy aspect.
Objective is towards increasing awareness and generating engagement for your product.
Here the focus is on getting users to try or buy from the platform. Focus is more on the transaction aspect. Less focus is on brand awareness or category education and more focus is on letting users know that there exists a better way to solve a problem and getting them to try your product offering.
Try festive collection campaign from Myntra (link)
Messaging style where brands are trying to address barriers and thereby, trying to build and communicate distinctive positioning and/ or perception about their brand so as to get a new set of users to try their product or service.
Objective is to create a strong perception about the brand that addresses category-level barriers and gets more and more users to try the product.
The question remains: why did some of these campaigns work while others failed? Is there a pattern that other companies can benefit from?
We will address these questions in this article. We explain a data-driven and research-backed framework that can help founders and marketing leaders leverage brand marketing to progressively build their brand by streamlining their brand marketing and reaching out to their potential customers with targeted messages.
Taking a step back — why is brand important?
“In businesses, I look for economic castles protected by unbreachable ‘moats’.” — Warren Buffet
Broadly, there are four moats or value creation drivers:
Scale (on both supply-side and demand-side scale)
Habit (instead of “lock-in”, which has a negative connotation)
Brand (can be extended to include other intangible assets such as patent, regulatory approval, etc. — esp. for Pharma, Fin-tech, etc. verticals)
Brand is the second most powerful moat (after network effects). Brand can help increase user involvement and, therefore, help unlock network effects. For example, stronger brand affinity generates higher referrals — both online and offline (word-of-mouth buzz).
There are many measurable advantages of building the brand as a strong defensibility mechanism such as:
Higher customer affinity towards your brand and, therefore, more referrals
Brand can drive higher engagement and, therefore, achieve higher retention
Increase usage and reduce price sensitivity
Increase is profit margin (due to decrease in price sensitivity)
We looked at the past research done in this area but didn’t find anything that was directly relevant. The challenge is to find frameworks that recognise not only that a product/brand is being developed but also that the category itself is being defined. The model that comes the closest is that incorporates brand development index and category development index as shown below:
where BDI and CDI are defined as follows:
How can a startup build a brand?
Both marketing and product can help to build a brand. To make your brand and your message resonate with potential users, it is important to also tell your story through your product. By thinking of your product as a person and by defining your product persona, it’ll be easier to roll out a product that reflects your brand personality. Potential users will notice the authenticity and gravitate toward the product. They’ll know that it has been designed keeping them and their problems in mind and will be the first ones to promote and advocate about your product, thereby helping you build the brand through virality and word-of-mouth.
Product generally addresses a users jobs-to-be-done (JTBD) while the brand talks to the user at an emotional level addressing their goals-to-be-achieved (GTBA). You can read more about it here.
At different stages of the company, it becomes important to communicate both (JTBD and GTBA) while maintaining the perfect balance depending on the category adoption and brand awareness levels.
“If people believe they share values with a company, they will stay loyal to the brand.” — Howard Schultz, Starbucks CEO
Currently, brand marketing is the predominant way to amplify the voice of your brand.
Mapping brand marketing to customer journey
A customer’s journey with any product has three phases: Invite, Engage, and Connect. This is true for any kind of product — digital products (such as consumer products or business SaaS products for small/large enterprises) as well as non-digital products (such as cars, apparel, fashion, entertainment, etc.).
In the Invite phase, the customer explores the product to evaluate if the value proposition offered by the product resonates with them. In the next phase, customers Engage with the product (before and after conversion/purchase) to derive value from the product. If the product delivers the promised value, customers start developing an association with the product — which, after repeated and consistent value delivery by the product, evolves into emotional Connect with the product (that often transcends the functional attributes of the product).
Company building a product or service has to cater to these three phases of customer journey in a distinct manner.
Brand marketing itself follows Invite — Engage — Connect journey. Analogously, brand marketing has the phases:
Invite-led brand messaging
Engage-led brand messaging
Connect-led brand messaging
And these phases correspond to the four messaging we spoke about earlier, in the first section of this article :
This helps a brand to gradually build association with target users and sequentially encourage them to try out category-creating products. This not only helps to develop the brand build stronger emotional connect with customers but also helps to build the category itself.
If we were to map brand’s journey with customers journey, it will look like this:
Messaging spiral is pretty straight-forward. At the first step, the brand focuses only on capturing the user’s attention and how the brand’s service/product can solve that problem. This step also involves understanding the user’s concerns and alleviating them by talking about them. Next step in “brand transactions”.In this step the focus is on getting the users to try your product/service. Post that, is when you do ‘brand perception’ related campaigns with continued focus on addressing users barriers to try/buy products from your platform. And the last step is “brand bonding” wherein the brand focuses on deepening emotional connections with its customers.
It is important to note that “brand invite” is different from the broad-based “brand awareness” that is commonly targeted by the traditional FMCG companies when they launch a new product. This is because the tech-first brands (especially during early phases of their own journey) have a narrower set of customers that they want to go after. More importantly, it is easier for tech-first consumer brands to inform potential users about their offerings (via their website or apps) and to engage with them then and there. The best companies (even those with offline delivery models) are able to provide “quick aha” to customers via their digital properties.
It is important to note that any messaging has to be based on a strong consumer insight of the target audience we want to reach out to, which later will translate into a creative that is relevant, unique and credible. Consumer insights are best captured by understanding both their functional needs (JTBD) and non-functional wants (GTBA) — see here for more details. Brand’s creative can pick the right mix of JTBD and GTBA, depending on the desired brand messaging. This translation can get manifested in different ways and in multiple stories. Brand can deploy multiple tests and research methodologies to determine if the ad passes on the 3 parameters (uniqueness, relevant, credible) before spending marketing dollars on distribution.
It is important to highlight that brand marketing should not focus too deeply on product differentiation (at feature level, etc.). This task is better left to performance marketing and own channels (including website, mobile app, etc.). However, it is important to build differentiated perception in the customer’s mind about the brand. This should be done based on unique customer insight related to the product USP and that matches the brand essence and brand personality being built by the company.
Brand marketing is all about building emotional connections with customers. Therefore, rational differentiation (based on product differences, etc.) should be used lightly. They can be used as overlays, etc. to highlight unique offerings. However, the brand messaging and the creative itself need not explicitly call them out.
Amazon India case-study
Let’s take a look at a company’s brand journey to understand and better appreciate how these three phases play out in the real-world.
Amazon entered Indian market in 2015 and quickly established itself as a leading e-commerce brand in India. Though Amazon had the benefit of leveraging its experience in the US and other markets (and a rich catalog due to the supplier relationships in other markets), it had to compete with two well-funded incumbents in the Indian market: Flipkart and Snapdeal.
Within one year, Amazon had grabbed significant market share. This was achieved while putting together supply-chain and distribution networks, etc. Besides high degree of discounting, this was built using a highly-visible and sustained brand marketing campaign. Amazon was amongst the top-3 overall advertisers (i.e., even after including traditional heavy advertisers such as FMCG companies, travel brands, financial services brands, automotive brands, etc.) in 2016–17.
These campaigns helped Amazon overtake Flipkart for a short period of time as shown below. Each campaign resulted in spikes in Google brand search trends as well as delivered longer-term brand response by shifting the baseline traffic coming to the Amazon website.
When we view Amazon’s brand campaign from this perspective, we notice that the sequence in which Amazon went about their brand story to be as follows -
Invite-led: Amazon in its first campaign in India, ‘aur dikhao, aur dikhao’ did not ask the user to come and transact, they came up with a strong consumer insight that Indians love window shopping or checking out multiple options before finally selecting a product. Latching on to this powerful consumer insight, Amazon came up with their campaign asking the users to come and check out the vast catalogue of product and product options Amazon has, thus encouraging engagement from users.
Engage-led with focus on transaction: Next step is to get the users to ‘transact’ on your platform, here apart from the pointers mentioned above, brand also needs a very powerful hook to get users to ‘transact’. These can be slightly tactical in nature but at the same time should help you build your brand story. A company which falls in mature category but low on brand maturity can directly start focusing on transactional campaigns as the user does not need to be educated about the existence of a particular category. They just need to know about your brand and what value-add can you bring on to the table.
Engage-led with focus on perception/differentiation: Next step in the brand messaging ladder is building brand perception. This stage is where brands need to really build and communicate distinctive positioning and at the same time encourage trials from users. If the brand falls in the quadrant where category maturity is low but brand maturity is high, the onus of building and growing the category lies on your shoulders and this definitely asks to think about radical changes in product offering. For example — Flipkart launching cash-on-delivery (COD) or Myntra launching ‘try and buy’ to bring the next set of customers that may know about the brand but were apprehensive of trying you out. Finding the right triggers that can motivate them to try, combined with change in business and product offering is the right way to go about solving for this stage of the brand messaging ladder.
Connect-led: Last step is brand bonding, connecting with the users emotionally, taking a stand and even without communicating your product features or product offerings, being able to connect with the users. Some of the examples are commonly known such as Apple, Dove and many who have been able to do on the consumer side. One company that definitely needs a mention here is Swiggy that did this for their delivery partners and also struck a chord with their consumers.
Here is the video, do have a look and let us know what you think:
As can be seen in the figure above, Amazon ran their brand campaigns in the precise order as per the spiral shown above. It is worth mentioning how Amazon completes and moves on to the next stage of the spiral with it’s ‘invite-led’ campaign (Chonkpur Cheetahs) when reaching out to the tier 2 audience.
Decoding performance of other brand campaigns
When we look at some of the campaigns that did not yield the desired impact, we find that they were executed without building the right kind of association with the customers (either via the product or via the brand marketing activities). This ‘jumping-the-gun’ (as can be seen in Flipkart’s example below) when it comes to brand marketing may cost companies time and resources, not to forget the business opportunity cost where the brand campaign does not lead to impact in any business metrics.
Now, for the first-time tech founders having limited or no experience in brand marketing, it is very natural to work with brand agencies for brand marketing related activities. Most advertising agencies typically have experience working with FMCG or financial products and, therefore, see value in brand bonding led campaigns. This is natural because brand bonding campaigns do help achieve the ultimate aim: to connect emotionally and build a bond with its consumers. However, this is not the right approach for category-creating products and startups. It is important to first introduce the product/company to the target audience and then slowly work towards deepening the brand’s relationship with the target audience.
Using this, companies will be able to ensure that the proposition and messaging is spot-on and then the effectiveness of the campaign becomes a function of how one is able to translate this core proposition into a good creative and then on one leveraging the right channels in an optimised way to distribute the message.
There is no debate that consumer insights are at the crux of marketing and branding activities. However, to connect with the target audience, it is necessary to ensure that the brand is able to translate the insight into a messaging that corresponds to the stage of the brand’s journey with its target audience.
It can be very tempting for brand practitioners to ‘jump-the-gun’ when it comes to brand messaging — especially because “brand bonding” related messaging has been the norm with the old-school brands. Moreover, brand bonding related messaging is preferred by the brand agencies because it provides the broadest creative canvas for creating the most beautiful, evocative, and rich brand advertisement films. However, like everything else, timing is very important. Laying the right foundations for your brand and sequentially aligning your brand messaging to the stage of the brand’s journey with its customers is critically important.
A systematic and step-by-step brand messaging progression is the best way for category-creating companies to slowly but surely transition into category-dominating companies.
Hope you will be able to directly benefit from the brand framework we have outlined here. We look forward to hearing from you and your experience around building category-creating digital-first brands in India and elsewhere.