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You Can’t Afford to Ignore Branding: Here’s How to Convince VCs

 

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In the past, venture capitalists associated one word with marketing and branding: optional. Startups must prove value quickly to raise the confidence of investors, which can make it hard to convince VCs to earmark funds for marketing efforts.

On the surface, it makes sense: VCs and investors scrupulously monitor the ROI for every dollar spent, so suggestions to allocate funds can raise a lot of questions. Will this foster growth? What type of agency makes sense for this brand? Will spending more on marketing help the brand get noticed?

The good news is that VCs are starting to realize that strategic positioning, targeted marketing, and creative branding increase consumer engagement. In fact, some of the remarkable breakout companies in the startup landscape have survived and thrived because of exceptional branding. Apple’s distinctive brand identity, for instance, is part of the reason its products are instantly recognizable around the world.

It’s not uncommon for startups to now focus on branding before a product even reaches the market, because it helps the product and/or business gain traction to attract funding, board members, employees, and talent.

Branding to Stand Out

Successful branding is like an online dating profile. The more you articulate about your true self, the more you will draw not just attention, but the right attention. In the same way, branding can unveil your brand’s true purpose and showcase your unique perspective, personality, and promise.

In past advertising parlance, the words “new” and “improved” shouting out from the box were enough to catch consumer attention. Not so anymore. Attention spans are whittling down to practically nothing, and consumers of all ages are continuously exposed to a dizzying array of options. Burdened with weak branding or cookie-cutter marketing, your company will get lost in the clutter of all that white noise.

It’s a buyer’s market, so it’s important for each company to find and draw a specific, targeted audience. Brands can cut through the cacophony of media by establishing and staying true to their brand identities. Remember, consumers often view brands as extensions of their personalities, so speaking to them on a personal level and in a tone they hear is key.

Your identity doesn’t have to be completely revolutionary, but it does need to make you stand out. Nest, for example, has a rather friendly and simple brand that balances the fact that it is a high-tech thermostat. It instantly communicates its promise to make your home a nicer, cozier, and more energy-efficient place to live — and that it will look good doing it. Although other thermostats have similar capabilities, Nest stands out by appealing to consumers’ desire for ease and comfort.

3 Ways to Showcase Branding’s Value

As an entrepreneur, your company’s long-term success depends on smart branding upfront. Use the following three arguments to persuade reluctant venture capitalists and investors that it’s a price worth paying:

  1. Branding instantly reveals your product’s attributes and personality.

If I meet you in jeans and a T-shirt versus a stylish little black dress, you’ll make different assumptions about who I am before I even have a chance to speak. In the same way, how you present your company, product, or service sets the expectation for what it will deliver.

Dollar Shave Club’s cheeky, irreverent branding and advertising informs men (and now women) that they spend way too much on razors simply because marketing told them to. The message works because it flips the script. It uses marketing to convince the audience that they fell for marketing — and then it wins them over. It grabs the consumer’s attention by engaging consumers in a way Dollar Shave’s competitors weren’t. Once it had its audiences’ attention, it could make the case for consumers spending less and having a better time with the reliable, sensible, and funny offering of the company.

  1. Branding legitimizes new products.

Cheap or unconsidered branding looks like a commodity and is easy to overlook. But if the branding looks established, consumers will be more likely to give it a try.

For example, Shinola was an old shoeshine brand that went out of business. A VC company bought the name and repurposed it for a watch company. The branding and name innately possess a throwback feel and speaks instantly to the heritage-loving groundswell. Even though this Shinola was new, it carried the feeling of a vintage brand, newly discovered by a modern audience searching for authenticity and American craftsmanship in an age of modern tech overload.

  1. Branding is the only way to stand out in a crowded, commoditized marketplace.

Through branding, you can convince consumers to select your offering over many others. Take Fiji Water. There are hundreds of bottled water companies — it’s a commodity that demands branding to stand out. When Fiji Water came on the scene, no other water brand looked like it. Everything about it felt refreshing and lush.

Your branding must be on point from the beginning, so allocating funds to it has to be a priority. Your brand identity is your first impression, and you only have one shot to make it a good one. A second chance may come too late.

 


 

 

Image Credit: CC by Alper Çuğun

About the author: Jiffy Iuen

Jiffy Iuen is the founder and creative partner of Frank Collective, a bi-coastal branding and content company based in Brooklyn and Los Angeles. She lives in East Los Angeles with her husband and two rescue dogs.

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