Why High-Tech Companies Need Branding

 

The meltdown we are seeing in the technology industry reflects an overabundance of hype. Companies have suffered because they’ve confused advertising (getting attention) with branding (promise and delivery).

 

Unlike an advertisement, which is short term, a brand represents the promises you make for the long haul. Also unlike advertising, branding is a constant process, and it happens whether a company “means to” or not. Every action an organization takes contributes to its brand. It’s only a question of whether this fact is recognized and managed actively.

 

We have been working as brand consultants to tech firms for the past few years. Over time we witnessed a general industry shift toward hyping the future in order to stay competitive.

 

Companies sold themselves on what was “sure” to happen eventually, rather than what they were capable of offering at the time. If you couldn’t find the words “largest,” “most comprehensive” and “cutting-edge” everywhere — from their Web sites to their T-shirts — then you just weren’t looking in the right place.

 

So to us, the fact that these companies are in trouble is no great surprise. Your brand is your promise, and failure to deliver makes customers feel like victims.

 

It’s time to get real. Companies are learning the hard way that they need to build their brands with actions, instead of giving away T-shirts. It’s no longer enough to “leverage our partnerships” — these days, everyone and his brother has a partnership with Microsoft or Cisco. Credibility is gained over time.

 

Every action a company takes must reflect the brand promise in order for it to be believable. The promise must be reflected not only in the products and services offered, but in every organizational function, from the billing system to customer service to tech support. Their actions are part of a living story, and companies must take the time and make the effort to “own” that story. The best way to build a brand is by providing honest delivery on promises made.

 

Particularly in today’s challenging economic climate, misconceptions about branding — what it is and whether it’s really necessary — remain. These misconceptions can be extremely costly. However, if your organization focuses on “brand strategy” rather than on typical advertising and marketing initiatives, you’ll develop the optimal positioning, as well as an action plan for maintaining it.

 

In my conversations with tech industry professionals, as well as with prospective and existing clients, these mistaken beliefs tend to come up over and over again. Here are five of the most common:

 

Advertising and branding are the same thing.

 

One of my clients had grown tremendously but wasn’t making any money. Why? The firm was known as the “let’s-make-a-deal” company, the price slasher in town. What it didn’t realize was that this image had become its brand. So what it needed was total repositioning, but what it kept asking for was “better ads.” It’s far better to develop a brand strategy first, then create marketing and advertising communications that are aligned with this strategy.

 

I’ll do brand strategy when everybody else does.

 

By and large, innovation and a quality product are what count to tech people. And it’s true, without the technology your company is going nowhere fast. At the same time, it’s important to recognize that consumers are faced with myriad similar products and promises — and are looking for something more. These days, it’s the combination of functional and emotional benefits that makes your company stand out from the pack.

 

The economy is bad; I don’t have the money.

 

It’s tempting to say, “I’ve only got so many dollars, I can’t afford to take a chance on marketing now.” However, the reality is exactly the opposite: a failing business is one very clear sign of improper branding. A company that hasn’t taken the time to be strategic, that hasn’t gone through the process of thinking about what it is, what it wants to achieve and how it is communicating these messages to its market is inevitably going to face a crisis. And although it’s not ideal (or fun, honestly) to do a brand strategy when you’re in a crisis, it’s one case when you are definitely better off late than never.

 

I know who my target customer is, so we don’t need research.

 

When there are millions, even billions of dollars at stake, comprehensive market research is a comparatively small investment to make in its success. If you don’t investigate, you won’t find out. Period. No matter how good your intuition is, or how good your business has been thus far, do the market research to find out who will buy the product or service you are offering.

 

Employees are irrelevant to brand strategy.

 

Sure, you can say “it’s all about the dollar.” But the fact is, if your organization is troubled on the inside, it will affect your performance eventually. On the other hand, if your house is in order, your employees know what you stand for — and they tell other people about it. In effect, they become loyal brand messengers, the most effective kind of salesperson I can think of. Investing in your people reflects a kind of long-term thinking that spills over into the rest of your operation as well. Ultimately, Wall Street will respect you for it.