Key Takeaways from "The Brand Gap" by Marty Neumeier
The following insights were the highlights of the book "The Brand Gap" by Marty Neumeier to me. I think many of the book's lessons also apply to startups and companies that struggle to build a successful product. Especially the pieces about how to innovate and differentiate are essential for product success. The part about how to validate ideas fast and test your hypotheses reflects how young startups should approach ideation. The methodology of concept testing and the principle of quick and dirty experimenting resonates with me a lot. While I learned to appreciate conclusive and statically sound experiments from research, I also reckon that, especially in the beginning, you need only to test concepts as fast as possible.
- A brand is not about what a company says about itself but rather what people say about it. A brand is not a logo or a particular color but rather the immaterial gut feeling people get about the company when they recognize it.
- Brand management is the management of how to differentiate from your competition. It's important to be clear about what makes you unique in the market. A brand is like a platonic ideal – you have a perfect schema where every message or product from your company resembles this schema in some deviation.
- The brand is important for evaluating the market cap of a company but not for everyday business decisions. Brand value never appears on the balance sheet of a company. That illustrates the gap in understanding how valuable a successful brand is.
- The brand gap is defined as the gap between a company's business strategy and creativity.
- A brand is based on the question of why the company's products matter. In an information-rich but time-poor society, people want to make their decisions based on gut feeling.
- The five disciplines of branding are to differentiate, to collaborate, to innovate, to validate, and to cultivate.
- The need for differentiation is that humans perceive differences as beautiful and like to think in dichotomies. Therefore, a strong brand can differentiate from other brands very distinctively. Moreover, competition enforces specialization, where it is better to be the champion in a small category than to be number three in a large one. When you are number one in a category, you get 1) higher margins and 2) lower risk of commoditization.
- The evolution of marketing has led from a marketing focused on features, to a marketing focused on benefits, to a marketing focused on experience, and finally to a marketing focused on identification (i.e., trying to make marketing more personal).
- You can destroy a brand by basically diluting your differentiator. When a brand starts to offer products in a new category, it is harvesting its brand through line extension while losing its differentiator. For example, when Volvo introduced faster cars, they diluted their brand built around the promise to deliver safe cars. Even more extreme, when Porsche started to offer laptops. These line extensions confuse the customers as the brand stops to resemble a unique characteristic or product.
- Principle for innovation: Innovation is defined as doing something that scares everyone. You should try to be a daring brand that is trying to push the limits. You need to overcome the fear of looking stupid (e.g., Volkswagen beetle").
- Criteria for a good name: Distinctiveness, brevity, appropriateness, easy spelling and pronunciation, likability, extendibility, protectability.
- Focus groups and quantified experiments are support methods. They can help you confirm or falsify hypotheses, but you should never look for inspiration or innovation in quantified experiments.
- Don't start to milk your experiments for insights when the sample size gets big. It is almost as if you want to increase the value you draw from an experiment not based on the facts but instead on the money you spent, virtually like a sunk cost fallacy.
- Hawthorne effect: Subjects behave differently when they know they are part of an experiment. To overcome this effect, you should observe subjects in the field.
- The best studies are quick and dirty. Do not fall victim to analysis paralysis. Try to concept tests, where you create up to 7 prototypes and investigate how people react to it. These experiments cost little and yield insights. They are not meant to be conclusive or statistically significant but rather to yield learnings and insights fast.
- Don't worry, be crappy. Consistency is not the most crucial factor for a brand. A brand is like a person and to err is human. Hence, it would help if you did not worry about your consistency.
Ultimately, I think the book has a lot of valuable insights. Though, based on my interpretation, the biggest challenge of brand management, as described in this book, is to stay innovative with a growing organization. On the one hand, you need to standardize the communication and set reasonable expectations that resonate with a lot of stakeholders. While on the other hand, you want to be successful by really differentiating from your competitors. The dilemma of weak brands is that they are not daring enough and do not try to stick out but rather operate with what is familiar. The same dilemma holds true for digital product management. Where product managers have to find the most lucrative customer problems and try to focus on what really matters to the customer, it becomes a challenge to not try to just copy your competitors or just try to launch as many features as possible. I think that there is a lot of overlap with the management of a strong brand and the management of a great digital product. If the product manager is able to really isolate the problem, you are able to find innovative solutions because you do not need to look for what the competition is doing anymore. Moreover, if you launch too many features, then you dilute the value of your product by line extension. You need to focus on one issue and make sure that your product is solving this issue with the most effective features.