Debunking Brands as Moats

The idea of Brands as moats is a popular axiom

It is after all one of the five popular business moats (Think: Brand, Secret, Toll, Switching and Price) utilised by value investors and venture capitalists when evaluating a company

Theory would have it the moat is your competitive edge.

The gap between you and the competition

But it's flawed branding strategy

Think like an investor or VC and you'll be thinking you need to build a moat.

But the problem is Brands are not moats. They are bridges.

Branding is the business of designing connections with customers

Your brand is the bridge that spans the chasm between you and the customer. Between you and the prospect. Between you and the market

Ultimately branding is the bridge between you and the sale

The moat is the chasm. The great unknown in the prospect's mind. The gap between you and the sale.

Without a recognisable brand their is no connection. No way of crossing the chasm

By investing in brands we build bridges to help prospects to safely cross the chasm

Global brands like Apple build multi-lane super highways to fast track the buyers journey across the divide

Start-ups pay the ferry man (Google, TikTok or Facebook) to boat their prospects one by one across the murky waters

Alternatively they invest in 100's of rickety rope bridges (think: posts, shares, likes, comments, tweets) on social media

Either way all of these things are an investment in building bridges to make the journey across the dark waters a little easier for the customer

Branding isn't about digging moats. It isn't about making things harder. It's about making things easier.

It's about building connections… It's about reaching out to your customers… to the wider market

It's all about building bridges

It really is that simple

So have a think about that... at least until next time

BTW, the harsh truth is, the only time a business pulls up the draw bridge and widens the moat is when they have everything to lose and nothing new to offer

Originally Published Spring 2021. What are we talking about today? Follow us on Twitter
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