From B2B SaaS startups, to consumer technology companies, to direct-to-consumer brands, this is one of the most common questions our clients ask us. Unlike traditional product features, branding is much less straightforward—it’s hard to measure the ROI on (re)branding, and, as a result, it’s hard to understand if/when it’s a sound business investment.
While there are multiple angles to approach this question from, we’ve found one of the most useful frameworks is to ask yourself: where are you in your company’s lifecycle?
Pre-launch is one of the most common times to invest in branding.
Logistically, this makes tons of sense. Pre-launch branding helps you establish the fundamentals behind your brand identity—logo, color palette, typography, visual systems, etc. You need these things in place to actually launch, design a website, etc.
Additionally, as mentioned in our previous branding article, brand strategy takes you beyond the visuals; it helps you think through the actual positioning of your company. Clarity on positioning will be a critical component of your brand’s success.
In terms of how much to invest in branding, we generally help our clients think through a few things:
Is your industry crowded?
If so, a great brand is absolutely critical—it helps you stand out and prevents you from getting lost in a sea of other products and solutions. E-commerce, for example, is a relatively saturated industry where consumers are constantly targeted by advertising about different products. That makes the bar for branding extremely high; a well-constructed brand system will be critical for engaging your end consumers and driving purchases.
Similarly, as the bar for starting SaaS businesses continues to lower, the number of software companies increases. This means that SaaS is also becoming increasingly crowded, which makes branding a crucial tool to help your business stand out. Put another way, building great software alone no longer guarantees you a billion-dollar company.
One example of this is Notion and how they took on the productivity space. With existing players like Google Docs, Microsoft Word, JIRA, Evernote, etc., Notion was entering an incredibly crowded market. Strategically, they opted for branding that highlighted the simplicity and ease of their product to ensure that they stood out in the sea of competitors.
Additionally, customers need to know not just what your software does, but why they should care about it—why they should choose you. Accurately conveying the value behind your business is critical in the early stages of a business - it allows you to accelerate learnings about your company, test hypotheses, etc. Said another way, lacking brand strategy or visuals is a silent killer. If customers don’t understand why they should care about your product, it’s much more difficult to succeed no matter how good your product is in the backend.
Another common point where it makes sense to invest in branding is in preparation of scale. Let’s say you’ve found product-market fit, and are ready to ramp up customer acquisition.
Though somewhat of an oversimplification, we can think of branding as a flat percentage lift on your conversion rate. We know that better branding must help our conversion increase by some percentage, even if we don’t know exactly by how much.
What makes the question of whether to invest in branding tricky is that when you’re not operating at a larger scale, the math can flip depending on what exactly that percentage is. If you only have a small number of customers, whether branding provides a 10% vs. 15% lift (both very reasonable assumptions) to your conversion rate may be the breaking point in terms of whether investing the fixed cost to create a robust brand identity is an ROI-positive decision (though as mentioned in the above section, there are other reasons to care about branding early-stage beyond just monetary calculations).
However, as you begin to scale, the uncertainty between 10% to 15% lift starts to matter much less. As you spend larger amounts of time and energy to scale customer acquisition, it becomes increasingly likely that investing in branding is ROI-positive, since even if we are very conservative with our assumptions about the amount of lift brand provides, the fact that our potential customer base is much larger means that it’s likely the math still works out.
This is a purely ROI-driven way of evaluating branding, but it’s worth noting that at scale there are also operational reasons to care more about brand.
For example, on Day 1 of your business, maybe you’re okay to get by without as robust of a brand system. You only have 5 customers, and you know them all personally. Even though your brand might not accurately reflect the excitement behind the solution you’ve built, that’s okay—your customers understand your business and value props because you’ve gotten on the phone with all of them and personally explained it.
But at a certain point this is no longer sustainable.
As you scale, the amount of control you have over the touch-points your business has with customers also decreases. Your sales team starts taking calls and not you, what used to be personal referrals now becomes cold website visitors, the number of channels through which people find out about your business also scales horizontally. Long story short, not having a robust brand strategy and identity is no longer sustainable.
Companies might also invest in branding/rebranding at a less-defined point in time in order to test certain hypotheses.
For instance, you might believe it’s necessary to expand your core product to a new group of customers; maybe you started your business targeting an older demographic, but you now believe that your product actually caters to a younger audience as well. Investing in rebranding is a legitimate way to test this hypothesis and reorient your brand identity (visuals, copy, messaging, etc.) towards this new target market.
Another example: maybe you believe in your product, but you’ve come to realize that brand identity is your “silent killer.” You’ve realized that your website, social media presence, online channels—all your digital touch-points—don’t talk about your brand the right way. Your messaging seems off; your visuals seems clunky; maybe your copy feels cliché, and your customers just don’t get it.
So you rebrand, in an effort to imbue some vitality and direction into your brand identity, to craft a narrative around your product, and to help your audience really understand the value of your product.
Deciding when and how to invest in branding takes some thought.
At Slope, we’re intentional about helping our clients think strategically about branding, and about creating a brand strategy that effectively conveys their product/solution to their target audience.
If you’re interested in chatting about a potential brand or design project, send us an email to email@example.com.