How to build a strong brand

From: alexhormozi

Building a strong brand allows businesses to demand premium prices, cultivate customer loyalty, and guarantee sales in new ventures [00:00:45]. This is what allows companies like Yeti to charge $40foracupidenticaltoa$10 competitor, Harley-Davidson to foster lifelong customers, and Apple to generate automatic purchases of new products [00:00:53].

The speaker attributes their own success—a $200millionpre-yearportfolioand$100 million net worth by age 32—to understanding and leveraging this concept [00:00:18]. They emphasize that this is not about marketing basics, logos, or feelings, but about making money and changing customer behavior [00:02:12].

What is Good Branding?

Many popular definitions of branding are vague and don’t provide actionable steps [00:03:59]. The speaker defines branding as:

“A deliberate pairing of things through an outcome” [00:05:21].

For example, Coca-Cola pairs the act of drinking its product with the outcome of “yum.” This deliberate pairing encourages consumers to reach for Coca-Cola the next time they desire that outcome [00:05:32].

Conversely, bad branding occurs when a business pairs its product with things people dislike, leading to losses [00:06:02]. The Bud Light and Dylan Mulvaney collaboration is cited as an example of good advertising (informing many about the product) but bad branding (many customers hated the pairing), leading to decreased sales [00:06:49]. Bud Light recovered by pairing its product with elements its target audience liked, such as comedian Shane Gillis and the UFC [00:07:11].

Branding always occurs, but the goal is good branding, which is a deliberate pairing of a business with positive outcomes for its ideal customers [00:10:00]. What a business pairs itself with determines who pays attention and whether they move towards or away from the business [00:10:19].

Why Branding Makes Money

The earliest forms of branding, such as searing symbols onto livestock, served to identify ownership and influence behavior [00:11:10]. A branded cow, even if the brand isn’t recognized, is treated differently from a wild cow because it signifies belonging to someone [00:12:45]. This demonstrates the power of a brand to dictate a connection and affect human behavior [00:12:55].

A strong brand provides several financial benefits:

• Premium Pricing [00:14:07]: A strong brand can transform a commoditized product (like a $5whiteT-shirt)intoapremiumproduct(a$60 Nike T-shirt) [00:14:07]. Customers pay more to associate themselves with the desired outcome the brand delivers (e.g., wanting to be a winner, so buying Nike) [00:14:20]. Warren Buffett noted that the ability to raise prices without losing customers is a sign of a very good business [00:17:39].
• Improved Advertising [00:18:10]: A branded product generates higher click-through rates and better response rates in advertising, leading to cheaper customer acquisition and higher returns [00:18:31].
• Customer Loyalty [00:18:56]: A good brand drives customer loyalty, encouraging repeat purchases (like Apple users who continue to buy Apple products) and protecting the business from competitors [00:19:04].

Brands outperform commodities in every industry and offer a lasting competitive advantage [00:19:39].

How to Start and Grow Your Brand

Starting a brand involves deliberately pairing your offering with what your ideal customer likes, and equally important, knowing what to avoid pairing it with [00:20:19].

Steps to Build a Brand

1. Start with a “Weak Brand”: Your brand initially means nothing; people recognize it as a brand but don’t yet associate it with specific meanings [00:15:40].
2. Pair with Desired Elements: Deliberately pair your brand with something or someone your ideal customers like (e.g., Nike with LeBron and Tiger Woods) [00:15:48].
3. Brand Gains Meaning: Your brand begins to embody the qualities customers like [00:15:53].
4. Customer Association: Customers desire to associate themselves with that positive meaning or outcome [00:15:57].
5. Purchase for Association: They purchase a tangible representation of that association (e.g., a shirt with your logo), transferring money to your business [00:16:06]. This explains why customers will pay more for a branded product over a generic one [00:16:53].

Managing Brand Identity

• Curating a Brand: Think of it like curating a garden; you add good elements and remove undesirable ones [00:23:09].
• Consistency: Distant or random pairings hurt a brand because they make it difficult for customers to form clear associations [00:23:38]. Most brands develop by accident; good branding happens on purpose [00:22:49].
• Handling Mistakes: A single bad pairing can harm a brand (like a rotten flower in a bouquet) [00:23:53]. To recover, overwhelm customers with positive pairings until the negative one shrinks into irrelevance [00:24:31].
• Product Quality: While external pairings are crucial before purchase, the product experience itself heavily influences long-term branding and audience engagement [00:25:41]. A premium brand must deliver something special to retain customers [00:27:17].

Measuring Brand Strength

Brand strength can be measured by three main metrics:

1. Influence: How likely the brand is to change someone’s behavior. A strong influence means people react when they see the brand [00:27:49].
2. Direction: Whether the behavior change is towards or away from the brand. Good branding leads to behavior generally moving towards the brand [00:28:03].
3. Reach: How many people the brand changes behavior for (i.e., how many recognize it and react) [00:28:09].

Not all strong brands are polarizing (having strong positive and strong negative reactions) [00:28:52]. While some, like Donald Trump, have a strong, polarizing brand [00:29:15], others, like Taylor Swift or Mother Teresa, maintain a large, strong, and overwhelmingly positive brand [00:30:00]. Seeking controversy can increase recognition, but it’s possible to build a strong positive brand without it [00:30:17].

Applying to Any Audience Size

The principles of branding apply regardless of audience size [00:31:05]. Even with a small audience, like parents with their children, high influence can exist [00:31:10]. To measure brand growth, observe if more people are discovering the brand, if more people are changing their behavior, and if that change is in the desired direction (e.g., clicking, downloading, buying) [00:31:47].

When growing a brand, every new pairing carries risk, as some audience members might have a negative experience [00:32:21]. The key is to make bets that more people in your ideal audience will like the new pairing than dislike it, resulting in a net increase in reach, influence, and positive direction [00:32:45]. Don’t let a few negative comments prevent you from gaining hundreds of new, positive followers [00:33:43].

Practical Application

The speaker illustrates their own branding strategy:

1. Desired Association: Associate themselves with business value, making people money, and growing businesses [00:33:52].
2. Method of Pairing: Create content (videos, books, podcasts) specifically for small business owners [00:34:05].
3. Outcome: When business owners consume this content and profit, they associate that growth with the speaker [00:34:11].
4. Desired Behavior: This leads to increased consumption of the speaker’s content and positive word-of-mouth referrals, further growing the brand within the ideal audience [00:34:23]. People who don’t like business content will naturally avoid it, which is acceptable [00:34:38].

This demonstrates how understanding brand and product development for business success allows for a strategic approach to building a valuable business by creating a deliberate cycle of positive association and desired customer behavior.