By: Dr. David Bridwell, People Scientist and Jake McKenzie, Chief Executive Officer
Mature companies go through many steps as they progress from startup to maturity. Although each company is different as they grow, one underlying truth seems to remain the same—what got you here won’t get you there.
This means that the strategies and tactics that companies use in the beginning won’t continue to be the most effective strategies as companies grow from startup to maturity.
In the beginning, many companies start by focusing on a narrow market. For example, they begin by sampling their products and calling prospects. This gets them in the door in the beginning for quick sales, but these techniques won’t scale and sustain growth. That’s when mass marketing and branding play a key role.
How can you determine which phase of growth you’re in? The biggest difference between startup and mature brands is the difference in the way the brand is seen by the customer. In the startup phase the customer’s experience of the brand is more directly tied to the product itself and the product is often differentiated by fulfilling a need not met by the more established brands.
During this initial startup phase, the customer might make subconscious attempts at defining the category of the product, since we use our prior knowledge to help us process new information. If we take Red Bull as an example, when customers were first exposed to Red Bull they might have perceived it as a soda or an alternative to coffee. As the Red Bull brand grew and became more cohesive they were able to establish their brand within their own distinct category of “energy drinks”. Red Bull were able to brand themselves within a new category which provided a quick path to growth and brand maturity.
The Red Bull story tells us defining your category can be one of the early strategies for accelerating growth. Some recent companies that accelerated to a mature level of growth include TikTok and Tesla. These brands are interesting because they show how there are multiple ways to quickly reach brand maturity. TikTok grew in part by pouring at least a billion dollars into advertising while Tesla grew through PR, earned media and the personal brand of their founder Elon Musk.
Overall, it’s important for companies to recognize which phase of growth they’re in so they can adapt their marketing strategies accordingly. This is a million dollar lesson that many companies face when they discover too late that their initial marketing tactics are no longer effective. E-bay is a prime example—they continued pouring marketing dollars into branded search ads even after they’d built a strong enough brand to no longer need them.
Instead, they were able to redirect that money to more effective brand building activities, which more efficiently kept their brand top-of-mind for consumers.
To learn more about the importance of brand and customer psychology in driving marketing growth, check out our webinar How does advertising work. And give us a call at 800-624-9239 or email us at firstname.lastname@example.org to discuss how we can help your brand be top-of-mind for customers.