While having coffee with a friend last week, we got to talking about why brands are important. And more significantly, when are they not important? Many marketers assume that brands are always important.
I disagree.
Brands are most important when search costs are high. Search costs are high when it is hard to find objective and/or third-party evaluations about how good a product is. This is most true in the awareness and consideration phases of the marketing funnel.
Here’s an analogy. Imagine each consumer is sailing a ship on the ocean. Every ship wants to get back to land. When search costs are low (e.g., Consumer Reports, Yelp, or Rotten Tomatoes are easily available and relatively reliable), that means the sky is blue, the sea is calm, and there is a clear view of the shore. When search costs are high, that means the ship is surrounded by dense fog, the seas are choppy, and it’s not clear which direction land is at all. That is the realm that higher education and luxury brands play in.
In that environment, a powerful brand acts like a lighthouse. A brilliant beacon that can guide our lost sailor safely to harbor.
The difficulty is that nowadays, so many brands are competing through so many avenues of advertising and communication. That means our poor sailor has to hunt through a forest of lighthouses searching in vain for the specific lighthouse that signals the perfect harbor for their particular ship. When there’s all this visual chaos, it’s hard to know which lighthouse to aim for even on a clear day.
In the older era where there were too few lighthouses, you could get away with simply having a brand. Now, consumers needs to simultaneously combat the fog of too little information and the cacophany of too much information coming from a forest of lighthouses.