In this episode: What is a brand, really? Jon Peyton argues it’s the space your company occupies in a customer’s mind. Using Nike, Honda and Acura, Tesla and an unlikely contest between cereal and eggs and bacon, he explains how to decide how you want to be perceived. He also explains why it’s easier to position against a competitor than alongside one.
Key insights
- A brand is the space between your customer’s ears: what they believe you stand for.
- One company can serve different audiences with different brands. Honda and Acura are one example.
- Tesla started with luxury vehicles, so its later, more affordable models still felt premium.
- It’s easier to position against something than with it. If customers see you as a complement, they keep buying what they already buy.
- Know the brand space you want to own, and the “brandscape” of competitors already in your customer’s mind.
Episode timeline
- 0:00 The entrepreneur’s brand
- 0:40 What is a brand?
- 1:14 Nike and the power of association
- 2:36 Cars: luxury brands and economical brands
- 4:33 Tesla’s luxury-first strategy
- 6:27 How do you want to be perceived?
- 8:27 New entrants and the first-mover advantage
- 10:07 What’s the first brand that comes to mind?
- 11:21 Cereal versus eggs and bacon
- 12:58 Position against, not alongside
- 16:13 Brand space and the brandscape
- 18:46 Questions to define your position
- 20:12 The cost of getting it wrong
The episode in brief
A brand lives in the customer’s mind. Many companies make good sneakers, so why does Nike command more? Because of what people associate with it: quality, status, being ahead of the trend. Jordans carry the Nike name, and that association does a lot of work. A brand is whatever space your company holds in the customer’s mind.
Different audiences, different brands. Any safe car gets you from point A to point B, yet some brands sell luxury and others sell value. Honda serves buyers who want quality without extras. Acura serves buyers who want leather, built-in navigation and one all-in price. Same company, different audiences.
Tesla went luxury first. Tesla launched with premium vehicles. When the more affordable Model 3 and Model Y arrived, buyers felt they were getting access to a luxury brand at a lower price, with no need for a separate brand. As established automakers and newcomers such as Rivian enter electric vehicles, customers will compare them, and whoever wins the space in their minds wins the sales.
What comes to mind first? Name the first soda, cereal or candy you think of. That’s who holds the brand space in your mind. Your job is to understand who holds that space for your customer and how you’ll compete for it.
Position against, not alongside. It’s easier to position against something than with it. A company selling ready-made eggs and bacon to keto-minded customers can explain exactly why cereal doesn’t fit their goals. If customers see you as a complement instead, they’ll keep buying what they already buy. Positioning against the current choice, backed by your research, is how you move it out of first place.
Do it in order. Understand the market and its pain points. Build your bridge product. Then define the brand space you want to own and the “brandscape,” the competitors already in the customer’s mind. Ask: Who is my target customer? What are their pain points, and why? Why isn’t the competition solving them? How will I prove I can?
The cost of getting it wrong. Poor positioning doesn’t always mean bankruptcy. It can mean stagnation, the wrong customers, more complaints and more friction for your team.
Key action items
- Write your brand in one sentence. Describe how you want your ideal customer to think about you, and test it on a few customers.
- Name who’s first in your customer’s mind. Identify the brand your customer thinks of first in your category, and why.
- Write your “against” statement. List three specific ways your offer solves the problem better than that brand, and the evidence for each.
- Check your customer mix. If you’re attracting the wrong customers, revisit your positioning before you spend more on marketing.
Listen next: Episode 12: Entrepreneurship: The Value of Your Service or Product
This episode is educational and isn’t legal, tax or financial advice. Speak with your own attorney and advisers about your situation.