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Where do I focus, on brand building or customer acquisition?

Lindsay Says

If you are building a brand that is meaningful and motivating to your target customer, and if your brand proposition is differentiated and ownable, then such a question presents a false choice.

To be a healthy business, you need to do both. If your brand strategy is based on a sharp consumer insight, then everything you do to build your brand will acquire customers – and everything you do to acquire customers will build your brand.

What about the ROI?

It is true that it is much easier to measure your customer acquisition than it is to measure your brand equity. Those who avoid spending money on anything without a clear ROI often find the idea of brand building uncomfortable, because they might not know if it was money well spent until months or years later, and even then it might be hard to know for sure what drove the healthy trajectory. And clearly, one can’t focus solely on building long-term brand equity without addressing the need for growth in the near term.

Short Term, Long Term

The classic business conundrum of short versus long term is inherent in this question. I could acquire more customers today by employing a coupon or a viral social campaign, and it will help me in the short term. Or I could use that money to support a less concrete tactic to build brand awareness in the long term.

In some ways, the human condition is to manage the paradox of short versus long term. In the short term, it is more pleasurable for me to sleep in than to get up and go running before work. In the long term, I am better off if I exercise regularly. We navigate this paradox throughout countless choices we make each day.

When it comes to brand building and customer acquisition for a business, leaders tend to overemphasize the difficulty of this conundrum.

It’s not either-or; it’s both-and.

The best brand building works in concert with your customer acquisition, making both efforts more effective.

  • A customer acquisition tactic, such as a coupon, can and should promote the brand essence of an experience. While its immediate objective is to convert a potential buyer to an actual buyer, its secondary objective should be to instill the brand positioning in the buyer’s mind, driving repeat usage, loyalty, and word of mouth.
  • Similarly, a brand-building campaign whose primary objective is to spur awareness and warm feelings toward a brand should have a secondary objective of making it easy for the customer to engage with and maybe even purchase the brand.

The choice for leaders is straightforward: do both, and ensure that they complement each other.

Back to the exercise analogy: we need both sleep and exercise to be healthy. If I cut my sleep short every single morning to get up and run, I risk being sleep deprived and sluggish when I work out. But if I sleep in every day, I lose the powerful benefits of regular exercise. I need both, and when I’ve got them in balance, they support each other: when I’m well-rested I have a better workout, and when I work out I enjoy higher quality sleep.

I’d encourage leaders who believe that marketing only entails customer acquisition to think more globally and long-term about the future viability and health of their business. It’s great to get a lot of customers today, but what really counts is whether those customers are happy enough to remain customers and tell their friends about you. And I’d encourage leaders who eschew the customer acquisition mindset to remember that there won’t be a business in the years to come if the company isn’t making money now.

Successful Real-World Examples

Let’s examine a few particularly successful examples of the both-and approach to brand building and customer acquisition:

  1. Zulily
    This Zulily spot is one of three 60-second TV commercials with a nostalgic, soft camera lens showing young, colorfully-dressed children playing cheerfully. In the background we hear a slow, emotional version of “Itsy-Bitsy Spider” then a voice-over reminding us how fast they’ll grow up, foretelling driving lessons and concert tickets. It is primarily a brand-building tactic.

    But at the end of it, there is a call to action. We learn that items are70% off every day, and quantities are limited. We are enticed to visit zulily.com.

    This is a beautifully executed marriage of brand building and customer acquisition.
  2. Dropbox
    Dropbox’s viral customer acquisition marketing is legendary for its effectiveness at amassing rapid growth at almost zero marginal cost. One of the reasons for their stunning customer acquisition success is their refer-a-friend program, whereby a Dropbox customer who refers another will enable both the current customer and the friend a 500MB storage increase.

    Dropbox made it easy and rewarding to refer friends. That drove short-term growth. But Dropbox did not do this at the expense of building their brand. Their product experience was seamless, easy, elegant, and powerful at every touchpoint. Referring a friend to Dropbox not only gets you 500MB of free storage, it also makes Dropbox a more useful product to you when your friend has that storage.

    If Dropbox had, in contrast, paid you $10 for every friend that you referred (essentially a coupon), that $10 would not have had anything to do with your product experience. The refer-a-friend expanded how useful Dropbox was to each person who referred a friend, creating an upward spiral of utility. That is brand building, working in perfect concert with customer acquisition.

Guiding Principles

As you plan your marketing tactics, I encourage you to ask yourself these key questions:

  • If you are tackling a customer acquisition tactic to drive near-term growth for your business, ask yourself how you can ensure that this tactic plants the seeds for a long-term bond with the customer.
  • And if you are employing a brand-building tactic to increase awareness for your business, ask yourself how you can make it easy for non-customers to become customers right away.

A synergy occurs when you successfully meld your brand building with customer acquisition. Execute this well, and you'll enjoy a multiplying effect that makes both tactics more powerful.

We help our clients define and build brands that drive sustainable growth.

Find out more about past projects in our Case Studies.

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