We’ve been doing a lot of thinking lately at CustomerIcare about our brand and what we want to stand for. Right now, we have a product that people really like (love), our website is looking a little bit better every day, but… We don’t have a brand…
We don’t have clear values either. Ouch…
What we have is passion. Passion for great customer service, great design, innovation. For the startup world and all the awesome companies that try to change the way we do business (A big thank you to startups like Buffer, Groove, Mailchimp, Somewhere, or Slack for trying to make business a little more human).
You know what we lack? Structure.
That’s what good branding and strong values are all about: giving you a structure to build within (or foundations to build on).
A Good Product Can Only Take You So Far
We’re evolving in the really crowded live chat industry and, believe me, there are tons of great products out there. Hell, there are new live chat companies launching all the time.
Luckily, the market is large and growing fast, and there is still a lot of room for improvement. That’s why we’re here after all!
The hard part is to stand out. And that’s where branding comes in.
On a shelf with hundreds of similar products, what do you think customers pick?
- Brands they are familiar with
- The cheapest (or second cheapest) product
- The first product they see (the one right in front of their eyes, or at the beginning of the isle)
In other words, they are mainly influenced by branding, price and convenience.
Selling online isn’t much different.
- Branding: Built through content marketing
- Price: Freemium offers, marketing through price comparators
- Convenience: Strong search engine presence (through SEO or ads)
The Downsides Of The Price Approach
Eventually, the best strategy is to take a bit of all these elements and mix them into something that’s unique to your product.
To make things simple, I’ll look at how things work when you choose to focus your strategy on 1 main approach (price here, convenience and branding later).
Being cheap (or free) isn’t worth anything without a strong business plan around it
There’s nothing wrong with wanting to be cheaper than competitors. It’s been a small business advantage for ages and it works.
But… You need a real strategy to back it up.
When we got started, being cheaper made sense. Our product was still quite new and lacking important features and we had the advantage to be located in Poland where the cost of life is significantly lower than in the US or other western countries.
Soon, we realized that we were not the only “cheap” chat out there. There were at least 10-20 well known and growing live chat providers that offered a free plan. Yup, in the SaaS world, cheap often turns into free.
We tried going freemium. We rushed it, didn’t make our paid option attractive and didn’t give it much time to catch on. Long story short, we failed and went back to paid only options.
If you are considering a freemium model, take a look at this article from Price Intelligently first: Forget Freemium: Why It’s Killing Your Pricing Strategy.
Our main problem wasn’t the free plan in itself it was the fact that we didn’t build a strategy around it.
The price approach won’t help you attract “ideal customers”
In an ideal word, you’d offer your product for free to small businesses that will then switch to a paid plan when they grow.
This does happen but you need a good product, good branding and an excellent knowledge of your target customers. If your only advantage is your low price, you’ll attract “deal hunters” who will leave you as soon as they find a better deal.
You can’t choose to be “the cheap/free brand” just for the sake of it. Unless your plan is to work for free and give something out to the world.
When cheap works
Will all that being said, there are cases where going free or cheap is the best thing you could do.
The best example is cheap brands entering expensive markets dominated by a few mega brands. A few years ago, a company called Free Mobile tore through the French mobile market like a tornado. I remember I was in China at the time and when I came back, all I could hear about was how everyone was switching to Free (I know, the name says it all).
The main brands on the market were offering plans for a little less than €40/month at the time with 1go of 3G transfer, limited calls and unlimited text messages.
Free came in with 2 offers:
- A €2/month plan with 2 hours of calls, unlimited text messages and 50Mo of 3g data transfer
- A a €20/month plan with unlimited everything and 3go of 3G data transfer
It worked and the company managed to break into a well established market. They gained new customers at the speed of light which forced other providers to lower their own rates.
The best part is that their branding came from their cheapness: They are the “good ones” fighting the other evil giants trying to charge insane rates. They drive customer centric innovation while others fear change and hate customers.
So, yes, the price approach does work but you have to select your market carefully.
The Downsides Of The Convenience Approach
This approach comes down to being there, and being more visible than the rest of your competitors.
Online, this can mean heavily investing in ads or other outbound marketing methods.
Or, betting all your money on SEO.
Purely convenience focused companies are harder to come by on the internet nowadays but they were quite common few years ago.
The problem with betting everything on SEO
I am not jumping on the “SEO is dead” wagon here but I think it’s important to understand the danger of putting all your eggs in the SEO basket (or essentially all your eggs in any basket).
The main problem is that you don’t own the channel and you are vulnerable to algorithm changes.
This only becomes a problem if you engage in black hat wizardry or over optimize your site for bots.
If you want to read an “I lost everything” story about black-hat, check out this article on Inbound.org: Confession Of A Google Spammer
Over-optimizing is another problem. I can’t say it is black-hat because you aren’t trying to fool Google. You are just working with their current ranking factors.
A good example is what happened to EMDs and PMDs (read exact match domains and partial match domains).
In June 2013, Moz published an article about the fall of PMDs. Here’s the graph that goes with the article:
To give you a better idea of what I mean, here’s how the top 10 results changed for the keyword “auto auction”:
Before the algorithm change:
8 out of 10 websites have the keyword in their domain.
After the algorithm change:
2 out of 10 websites have the keyword in their domain. Yup, it was that kind of a change!
The key takeaway here is not “don’t use a keyword in your domain name”, it’s “don’t build your marketing strategy on buying an SEO pleasing domain”.
Google (and other search engines) are working hard to find “signs” to identify useful websites. If you are focusing on publishing useful content for your customers, you’ll win in the long run!
I don’t know if you remember these exact match domains but they were rarely good quality websites.
How About Investing In Ads?
SEO takes time and it would likely take you months or years to grow your SEO presence. Ads are the shortcut to internet convenience.
The great thing with ads is that you have control over who you want to target.
It’s also the marketing channel that’s the easiest to test and track.
The problem: it can cost a lot and it is rarely a scalable marketing strategy.
Let’s take basic Adwords or Facebook CPC ads. They’ll likely bring you few customers but you’ll need to pay for every single one of these customers.
Chances are very slim a mainly CPC ads based marketing strategy will help you create long-term success.
Convenience through integrations
In the online world, integrations are a good way to reach the niche audience of another brand. I include them in the convenience approach because that’s really what they are all about: giving customers a convenient access to your product.
We have one big star integration at CustomerIcare that brings most of our trial users: our WordPress integration.
While there is a lot that can be done about WordPress plugin branding, the simple convenience factor is a surprisingly effective way to get new customers.
This is due to the way people research and install plugins on WordPress.
Long story short, they run a quick search inside the platform, take a look at plugin descriptions and ratings and put them to the test.
Convenience takes over branding.
WordPress works great for us but we still have a lot of competition there.
A lot of startups explore more “niche” integrations when they get started to beat this competition factor. The process is very similar to SEO: Find a product that has a big enough audience (monthly search in SEO) and where you’d have low competition.
If you are targeting startups for example, you might want to integrate with tools like Trello or Slack. Customers will choose you because you are integrated with their favorite tool, not because of your brand.
Why You Need Branding & Culture
Branding and company culture might not seem like a priority at the beginning but they turn out to be essential when you start growing.
It is what will set you apart from competitors in the long run.
Branding as a way to be unique and memorable
When I wrote about Exact Match Domains and Partial Match Domains above, I didn’t mention one important thing about them: It’s really hard to create a brand around them.
Not impossible (just look at one of our biggest competitors, LiveChat Inc). But hard.
Let’s first take the trademark law into consideration. I’m assuming you’ll eventually want to protect your brand name.
According to a great article from Gamedevlaw, here’s what cannot be registered as a trademark:
Generic names: eg. “Apple” for a brand selling apples, “Flowers” for a brand selling flowers… Nothing keeps you from using the name but you won’t be able to keep anyone else from using it as well.
Descriptive: eg. McDonald’s Restaurant (A restaurant that belongs to someone named McDonald).
I know what you are thinking, here’s the explanation: It could not initially be registered as trademarks. However, at some point McDonald gained a strong “secondary meaning” in consumers’ minds. It stopped being a last name and became a brand. The company then had a legitimate trademark claim.
Now that the legal aspect is out of the way, there’s also another obvious reason why calling your flower brand flowers might not be the best idea.
It is nor unique, nor memorable!
A brand’s main goal is to help you stand out so people can remember and recognize you. I don’t think I need to say more to make you understand why a generic name is counterproductive.
Culture to give your brand personality
Company culture can seems like a really abstract marketing concept but it has a lot of benefits if taken seriously.
It can be what differentiate you from competitors.
Not having a strong company culture won’t kill your business but here are few reasons why I see it as an essential piece of the puzzle:
Culture brings consistency:
It’s really easy to keep a certain consistence when you have 10, 20, 30 employees. It gets a lot harder when you start growing to 100 or a 1000.
A strong company culture is a good way to make sure everyone is on the same page without having to create tons of processes and rigid rules.
Culture gives employees a higher purpose:
It can be daunting and tiring to work without a higher purpose in mind.
Company culture or not, employees will usually have personal end-goals: eg. Saving enough money to buy a house, Adding a shiny company name to their CV…
With a good mission statement and good values, you give your employees a common goal to strive for. A goal that is unique to your brand and that they won’t be able to find anywhere else.
Culture helps you build an emotional connection with customers:
Customers appreciate product quality. They enjoy effective customer service. But they don’t fall in love with brands they can’t identify with.
That’s where culture comes into play. It gives your customers a reason to choose you that goes beyond rational criteria. Culture is often what separates happy customers from raving fans.
Thinking long term instead of short term
The main thing about branding, company values and culture is that they are long term strategies. They don’t bring immediate benefits or profits but they are essential components of any brand that is there to stay.
With that in mind, there is no reason you should invest in these 2 elements if your plan is to sell your company or technology after few years of development.
In other words, if you are looking to get rich quick, no need for branding and culture. If you genuinely want to build a sustainable business, you need to give these a thought right from the start.
On to you…
What do you think? Do you need branding and a strong company culture to build a business?