by Mirela Hincu (Angelescu), Managing Partner Heraldist
There’s a brutal truth we face every day as human beings and as professionals: The best is not always the most successful, but what people perceive as best is.
In the startup world, this translates to The best product is not always the most successful product. The product that is perceived to be the best is the most successful.
This makes us complement the efforts we put into building our product with efforts to create a valuable perception around it. Or, as we put it at Heraldist, complement Product Engineering with Perception Engineering. Or build a brand, not only a product.
How? Build a good product, then give people reasons to connect with it beyond the product features. If they relate only to the product features or price, these will be their only judgment criteria when a slightly better or slightly cheaper product comes along. A product is fragile in front of comparable products. A brand is not. Good products need to develop into brands in order to thrive.
Why? Because we are emotional beings. 95% of our decisions are emotional; reasoning jumps in after that split second when we make the decision to ensure we’re not completely off track. Usually, we’re post-rationalising emotional decisions, and we call them rational. We need to connect to that emotional brain and give people reasons to like us and remember us.
When people remember us, our brand will be on their mental list. A staggering 80% of B2B customers start their search in a category already having a short list of vendors in mind. Our of them, 90% end up buying from a vendor on that initial list. The brand that is remembered is the brand that gets bought.
Also, research shows that people are more likely to choose a product they have little information on from a brand that they’re familiar with than a product they have a lot of information on from a company that they have never heard of. Emotional connection will always beat product information.
But one could always argue: Startups come up with an innovative solution to a group of people's problems. Those people are easily converted into customers from the very beginning. They have been waiting for this solution we’re offering for a long time!
This is definitely true. Except, in order to grow beyond that fabulous start, the solution needs to be sold to new audiences, people who are not aware of what they are missing. We cannot enter their lives and present a bunch of product features; it will never matter. But we can enter their lives presenting a product that answers a human need, telling a human story, provoking an emotion. This is brand building, putting our product on our customers' mental list so it’s there when they consider our category.
Brand building and managing the perception our potential customers have about our company is equally important in B2C and B2B companies alike. Sales Force, AirBnB and Coca-Cola follow the same principles to build their multi-billion dollar brands that double (or more) the value of their companies. These are just some of the notorious examples that exemplify what research shows us: the market value of well-run companies that build good products and complement them with strong brands is double than the market value of well-run companies that build good products but never invested in their brand.
The why behind doubling the value is simple to explain. Brands mean emotional connection, being on the mental list of future buyers. Future buyers mean future incomes. And future incomes, we all know, are central to valuations.