Main illustration: Daniel Zender
One of the biggest determining factors of a company’s success is the clarity of its message, and how that clarity comes across in every interaction across the product and brand.
It is the combination of clarity and consistency that builds trust – after all, as people we make judgments about each other based on how we behave, and on how reliable that behavior is. We like and trust those who do what they say and say what they do with consistency. The exact same is true in business.
That clarity is one of the main reasons I was so excited to join Intercom earlier this year – the company entered an industry dominated by impersonal and disconnected tools like ticketing systems and email with a vision to “make internet business personal.”
“That commitment and focus on how to foster real human connections is evident in every single thing we do on a daily basis”
The laser-like focus on this vision is evident in everything from the core product (a highly personalizable business messenger) to things like the logo, which is a smiling Intercom box. That commitment and focus on how to foster real human connections is evident in every single thing we do on a daily basis, and the resulting success is clear to see, with a valuation of more than $1 billion and revenue to justify it.
The playful animations on our homepage hint at our focus on the personal
More recently, however, I’ve realized that the technology industry at large struggles with such clarity and consistency – in marketing terms, there is often a difficulty developing a clear value proposition that aligns with product and brand identity. Companies and marketing teams are becoming much more technology focused (with good reason), and I fear this has left a skill gap in understanding these important concepts.
The importance of consistency in forming great relationships
Consumers want to have relationships with companies much like they have relationships with people. The best relationships are built on consistency across three key characteristics:
- Values: At my core do I stand for something?
- Decisions and actions: Do my decisions and actions align with my core values? Is this alignment clear and transparent?
- Outward behavior: Are my behaviors also consistent and do they give you insight into the type of person I am? Do I smile when you see me and do I show an open stance? Or am I forthright and more direct?
People who have consistency across these three things are people we want to be around, and this isn’t just true of our personal relationships – we also see this sort of “authenticity” as core to the appeal of political and cultural leaders.
Great companies are built on relationships
This dynamic is not just true of people, but also of companies. Sometimes it doesn’t matter how good a product you have. If people can’t clearly understand the alignment between your values, actions and behavior, they won’t buy into you. This means that great companies must have a similar alignment:
- Value Proposition: What is the core value you provide above your competition? Do you compete primarily on price? On product performance? On simplicity? On innovative, beautiful design? You need to stand for something. And whatever you stand for must resonate with your identified target market.
- Product: When you think about the job your product is hired for, is your value proposition baked through the solution you design? Much has been written about designing products based on the job they’re hired for – it’s important that as you look to get hired for more jobs, you keep a core value proposition at the heart of your product strategy.
- Brand Identity: When customers interact with your brand, is your value proposition clear? If you compete on beautiful design, you better make sure every marketing communication is beautifully designed. If you are competing on price, does this low cost focus come across in all your marketing? Does the brand personality you portray make sense based on your value proposition?
If you think about most successful companies, this alignment is very evident. Squarespace, to cite one example, has a real consistency from its value prop (beautiful design), to its product to its brand identity. In an entirely different industry, and in an entirely different way, European budget airline Ryanair also demonstrates incredible consistency from its value prop (cheap flights) to its product to its brand identity.
Three reasons companies get this stuff wrong
While Squarespace and Ryanair manage to make this alignment look easy, the reality is anything but. I see three main recurring patterns when looking at companies who struggle to get it right.
#1 Poor definition of value proposition and feature focus
The first reason is pretty obvious but many companies fail to get market traction due to poor definition of their value proposition. They enter a market with a unique set of product features that, for a short time, make their product the best at the job it’s being hired for (to a segment of the market at least).
“This lack of clarity on value proposition also means that your marketing team have no core values from which to build a brand identity”
But they don’t realize what got them traction in the first place. Competitors will quickly close the feature gap and now they’re in a war of features. Each company trying to compete to beat the other on a feature by feature basis. Trying to win based on incrementally improving on a wide range of product features is not a long-term nor defensible strategy.
A defensible strategy is choosing one, two, three, core things you want to win on, and you focus on developing features with that in mind. You are then happy to lose ground on certain aspects of the product while you develop a defensible position in the market. This lack of clarity on value proposition also means that your marketing team have no core values from which to build a brand identity.
#2 First-mover disadvantage
The common wisdom is that being first into a market is an advantage. However, I would argue that often it’s a long-term disadvantage. Why?
When a company develops an innovative product, creating a new category, generally they offer a pretty generic product designed to capture as much of the market as possible.
“As a market matures, the first mover can struggle to find that crucial alignment and risks getting left behind”
As such, the value proposition of first movers is usually little more than “we’re here, and no one else is.” As a market matures and other players begin to forge a more specific product and identity targeted at a certain corner of the market, the first mover can struggle to find that crucial alignment and risks getting left behind.
The classic example is Henry Ford’s famously black Model T – “Any customer can have a car painted any color that he wants so long as it is black” could be seen as embodying the broad market appeal of the first mover. Today, however, the car industry has multiple brands offering different value propositions targeting specific customer segments.
In the tech industry, we see a variation of this dynamic, with multiple segments being served by different companies, and consolidation around certain market segments – e.g. Mailchimp consolidating the small business segment in email marketing.
#3 Brand stretch
In order to grow new revenue streams, companies look to new product development. While this is obviously an effective growth strategy, done badly it can undermine the value proposition and brand identity that made them successful in the first place.
It’s critical that as companies launch new products under the same brand that they keep strong alignment between their original value proposition and the new product.
“The brand graveyard is littered with examples of companies getting this wrong”
For instance, if Ryanair launched a taxi service it should be low cost; if Squarespace launched an email marketing platform it would be simple to use, beautifully designed and powerful.
The brand graveyard is littered with examples of companies getting this wrong. They launch a new product under their existing brand that doesn’t properly align with their original value proposition, leading to misalignment in product and value proposition and ultimately a brand identity that lands flat with no meaning.
Navigating the pitfalls
It’s highly likely that most companies will find themselves in one of two positions, both of which will drive a decision to invest in product development:
- First-mover disadvantage – Trying to protect revenue in an existing market: In a bid to protect revenue from new market entrants in their current market they look at launching new products that better serve the new demands of an evolving customer segment.
- Brand stretch – Trying to grow revenue by entering new markets: On the flip side of the coin companies will look for new revenue streams by entering new markets through product development, thus risking brand stretch.
Whether you are a company seeking to protect revenue or build new revenue streams you are likely to look to product development to grow revenue. So how do you ensure tight alignment as you do this?
Mapping your product roadmap across the Brand Architecture Matrix
Obviously the first step to make all of this work is in defining a clear and differentiated value proposition that resonates with a segment of the market. Assuming you have this, how do you expand your product portfolio without risking brand stretch?
Effectively you have a range of brand architecture strategies that start with your master brand name at the forefront and then it moves into the background as you move into new product areas.
“As you grow along with the market, you need to consider your place along two related dimensions in order to determine your brand architecture”
Depending on your industry, you might consider well-worn tactics such as carefully considering your “brand architecture” – you can develop what is known as a Branded House (where the main brand is at the forefront and other products are sub-brands), or alternatively, you can build a House of Brands (where the different products function as distinct brands in their own right and the corporate brand is effectively hidden). As you grow along with the market, you need to consider your place along two related dimensions in order to determine your brand architecture:
- Dimension #1: Are the products you are developing solving the same or different problems?
- Dimension #2: Are you maintaining your core value proposition or changing it?
Brand architecture is used to help maintain alignment as you target different market segments. In 2017, when I led marketing at AdRoll, we were suffering from the risk of stretch because we were targeting two very different buyers, eCommerce companies who wanted to sell shoes and so on, and B2B buyers who wanted sophisticated ABM solutions. We ended up making the decision to spin off the B2B part of our business, creating RollWorks to address the brand stretch. This move contributed to AdRoll’s return to double digit growth.
Core questions to answer
These are not groundbreaking concepts but they are often forgotten or not enough attention is paid to them. This is something that should be constantly discussed within your leadership team. There is a massive risk that, even though you understand the concepts, you take your eye off them and end up in a situation where you lose focus on your value proposition or end up in a brand stretch situation.
Ask yourself the following questions:
- Is everyone in my company really clear what our core value proposition is? Can they articulate it?
- Is our product roadmap hyper focused on improving our performance within the constraints of the job it’s being hired to do and our core value proposition?
- If we have multiple products does our brand architecture make sense? Is there a risk of brand stretch?
While this might appear to be solely a question of branding or marketing – essentially, where do you land on the Brand Architecture Matrix – it is actually a profound question that relates to how a company defines itself and evolves its identity.
“We crave a sense of connection, and seek it in all our interactions, even with companies and brands”
As I mentioned earlier, at Intercom we strive to “make internet business personal,” and this concept is a terrific example of why all business needs to consider the person, even as they operate on a global scale. That’s because we crave a sense of connection, and seek it in all our interactions, even with companies and brands.
So think about the people you like the most, from loved ones you respect to public figures you admire. Think about what values they embody, what actions they take, what behaviors they exhibit. Chances are, those three characteristics will be entirely consistent with one another, and therefore the people will earn your trust and respect.
If you manage to achieve that same sort of alignment in your company, you too will earn the trust and respect of people, and foster not just business relationships but a level of genuine human connection.
This is an extremely broad topic and so would love to continue the conversation with you on it. You can get me on twitter @shanemurfy.