Thoughts from Brian "Waka" Wakabayashi, Managing Director of CōLab

May 17, 2023

“We’ll work on the brand later” and other lies

A conversation about the evolving role of a brand from startup to global behemoth with Brian "Waka" Wakabayashi, Managing Director of CōLab and Matt Herrmann, former Global Head of Brand Strategy at Amazon and current founder of a startup marketing consultancy, JAM Branding.

Brand marketing from seed stage to global domination

We get it. A banking crisis. Crypto winter. A looming recession (probably). Not to mention inflation, ChatGPT 4, quiet quitting, and a million other things conspiring to kill your industry or company. It’s enough to make even the most inspired marketers curl up in a ball and hide. In a time of great uncertainty, most will flee to safety and marketers are no exception. The only problem is that playing it ‘safe’ in marketing is usually the riskiest thing you can do. 

In this moment when many marketers are cutting brand investment and retreating into more attributable tactics like performance marketing, we wanted to revisit the fundamental marketing principles that govern consumer behavior and business growth. CōLab’s Managing Director, Brian “Waka” Wakabayashi called his friend and mentor, Matt Herrmann, former Global Head of Brand Strategy at Amazon and current founder of a startup marketing consultancy, JAM Branding, for a discussion about the role of brand in the marketing mix and how it can evolve from startup to scale-up to market leader and global behemoth.

Waka

Matt Herrmann

Let’s start with the most fundamental question: what is a brand and why should anyone care?

Waka: While I spent most of my career working with larger brands, over the past two years at CōLab, I’ve mainly focused on startups and scale-ups so this question comes up a lot. The answer we’ve landed on is that a brand is the story people remember about you. The sum total of all memories, from real experiences to advertising impressions to the amorphous vibe that you get from a logo, this all gets rolled up in our brains as a tidy little story that defines you against everyone and everything else in your category. 

Matt: I’ve had many different answers to this question over a long career being asked to define it, but I think maybe one of the best answers actually comes from Jeff Bezos (and I’m no longer contractually obligated to quote Jeff B) - he said that “A brand is what people say about you when you’re not in the room.” I like the subtle paranoia in the definition, but also that it neatly sums up the rational and emotional residue that persists in a customers’ mind when you’re not actively communicating or interacting with them. Also, the implication is that it’s rather taxing and costly to constantly be in the room (i.e., with a paid presence), so you’d better leave a lasting impression when you are there.

Waka: I love that! I think both of our answers come from the same place: a brand is not the logo or ads or product, it’s the memory those things impart on your audience.

How does brand relate to performance and growth hacking? Are these ideas at odds with each other?

Matt: I think one of the best things about “performance marketing” is, ironically, how well branded the phase is. It implies that anything else is “non-performance” marketing by default, which can put brand marketing in a defensive position. The reality is that, of course, they should complement each other. Exclusively investing in performance marketing and MQL leads to short term gain that can rapidly drop off once you’re “not in the room,” paying for every sale. Brand marketing is harder to measure, but brand investments that are thoughtfully focused on the right inputs can lead to longer term equity, making performance marketing more effective in the long run.

Waka: 100% agree. Talking with Diane Chour and Maria Hwang our Growth and Performance leads at CōLab, one thing we all agree on is that both brand and performance tactics drive growth, but the biggest difference is our ability to attribute sales or conversion activity directly. While performance investments can be directly traced to specific sales outcomes, brand investments can usually only be measured by softer metrics like awareness. This leads to the mistaken idea that only performance tactics drive sales while brand does not. But zooming out, we know that’s patently false. Studies have proven that investing in building a strong brand leads to long term growth in sales, protects price premium, and even supports the stock price. Just because one is easier to measure doesn’t mean it’s less important to the health of the business.

How should a startup with very limited resources approach investing in their brand? 

Waka: Most of the startups we work with start with a foundational focus on performance. They’ll begin with the largest scale channels like search and paid social and build a process to optimize the investment against customer acquisition cost. Brand investment shouldn’t replace that approach; it should be added on when the marketing budget reaches a scale where you can begin to make consistent, planned investments in building the brand. Once you carve out the funds, you can set brand-specific goals for those brand activities like awareness or preference that sit alongside the performance goals in your overall marketing strategy. Even with a smaller budget, making consistent investments in the brand marketing will yield results over time because brand measures are cumulative. While performance marketing results will disappear as soon as you shut the tactics off, brand marketing impacts can last years or even decades in the memories of your customers. 

Matt: A startup should be clear about their brand’s purpose, vision and mission. The next phase involves a close understanding of their customers’ perception, the competitive landscape, and what the brand’s differentiated position should be relative to other offerings. I would argue that not having any perspective on your customers is basically malpractice; customer understanding can come in varying levels of fidelity, commensurate with resources and investment.

What’s the biggest difference between how the world’s biggest advertiser would approach brand marketing vs. a startup?

Matt: The biggest difference that I encountered was moving from a world where we mostly focused on the highest value customers to a world (at Amazon) where the customer is essentially everyone. People like Byron Sharp would probably argue that all brands should focus on mental availability with every customer, but I’m still a believer that it’s easier to get someone’s attention when they’re at least in the market for your brand, if not a repeat customer. Guiding brand at Amazon was more like gardening an entire ecosystem of brands, understanding the links between brands at different levels of altitude and specialization, trying to objectively measure which way the water flowed, and navigating internal biases (some data based, some not) to provide a clear view on a very dynamic brand architecture. I don’t think there’s any other company whose brand architecture is as complex as that.

Waka: Fascinating. I’ve worked with some very big budgets before, but I can’t imagine targeting everyone. Operating with startups that aspire to the scale of Amazon someday, I’ve found that many have too tight of a focus on buyers who are in-market now without broadening the target to future and potential buyers. As a general rule of thumb, I buy into the How Brands Grow philosophy of targeting all category shoppers, so considering balancing the focus on likely purchasers as well as less likely purchasers is something we preach. 

What’s the best way you’ve seen to get organizational buy-in for brand investment when the company has largely focused on performance? 

Matt: Generally, the best cases I've seen start with developing data-based frameworks that link brand perception to business outcomes. The gold standard here is the Structural Equation Model (SEM), which is essentially a perceptual segmentation that clusters brand perception questions from customer surveys, connects them to data warehouses, and then shows how perceptions path from consideration to brand advocacy and love. Of course, SEMs are very resource intensive, but again, the idea can be executed at good/better/best levels of fidelity. Find out which are the most valuable brand perceptions in your category and connect your brand with them. 

Waka: This is really the holy grail of marketing. The ability to connect brand measures to sales impact is definitely something that we don’t often get to even attempt to do with scrappier start up budgets. Media mix modeling and similar tools can be cost prohibitive for smaller brands, but they can deploy measurement tools like brand tracking and invest to grow brand measures like awareness alongside CAC measures to ensure that they are optimizing for both short and long term growth and profitability. That way, they’re avoiding the pitfall of favoring tactics that are more easily attributable to sales, which can lead to missing big opportunities which are harder to quantify. In that way, I liken investing in brand to saving for retirement. Sometimes you’ll see instant results in a bull market; other times, not so much. But consistent, disciplined investment is the most effective way to build value. 

Meet the contributors

Brian "Waka" Wakabayashi is the Managing Director of CōLab, a creative studio helping world-class founders and management teams design better brands, build better products, tell better stories, and make better decisions. We were founded in partnership with WestCap, an operating equity firm that invests in growth stage technology companies, to help portfolio companies and start ups scale to the next level through our key practice areas of brand, design, growth, product, and PR. 

Matt Herrmann is the Chief Strategy Officer and Co-Founder of JAM Brand Studio, a consultancy that provides brand strategy, expression and integration services to scale-up businesses looking to combine business objectives, customer insights, and market opportunities into measurably effective brands humans love.