Uber Proves Growth-Hacking is Not Enough

20 Ideas in 20 days — Day 7

I was standing in line the other day, and the group in front of me was discussing Uber. Not about the current management and culture issues, but about how drivers had purposely gotten lost, over-charged by taking the long way around etc. Then someone in the group asked, “has anybody ever tried Lyft?”

This is Uber’s brand at this moment because it’s what their customers are saying. Customers don’t trust them, and the damage is real.

There’s a trend among startups to insist they don’t need old-school brand marketing. That data-driven, growth-hacking on its own is enough. I’m gonna say nope and that the Uber situation illustrates why.

Where Brand Beats Data

With data you can quantify the funnel. Who, what, when, where and how much. And because the ROI is directly traceable, CFOs readily approve the spend to improve the numbers. We spent w dollars on tactic x and increased data point y by percentage z. It makes the left brain very happy.

But guess what. Your customers are more that just data. They have hearts, they have right brains and they don’t always behave rationally. So even if you think you have all the facts, (as far as I know) you still don’t know what they’re saying to their friends and colleagues in person.

And that’s Brand. It’s whatever shorthand your customers (and non-customers) use to identify you. It’s that first association that pops into their brains. Form an image in your mind about the customer who is delighted by each product/company below.

Harley Davidson vs. Ducati

Tinder vs. Match.com

Facebook vs. Snapchat

I think you get the picture.

Three Ways Not Having a Brand Will Cost You

Slower growth. If you are the one and only solution to a problem, early-adopters and maybe even the early majority will buy your thing. But without a brand — an emotional connection that drives the change — the rest of the pack is going to continue solving the problem using whatever work-around they were using before.

Competing on Price. If you haven’t captured your customer’s hearts and absolutely delighted them — the minute a competitor comes along you’re competing on price and price alone. And heaven forbid you have a PR problem or trust issue like Uber or United. Because then, people may disregard price and go with the competition on principle.

Higher Customer Acquisition Costs (CAC). If you have brand evangelists (not people you hire, but customers) recommending your brand and singing your praises offline, it’s going to help you break through the noise. Further, with a brand, your target segments will self-identify with your product. They will come to you. If you don’t shape what customers say about you, your CAC is going to be that much higher because you’re going to spend a bunch of money trying to generate discovery and break through the noise.

Building a Brand

So how do you go about building a brand? There are zillions of books and articles on the subject. But a good place to start is by talking to your customers. Find out from them — in their words — why they choose/use your product and how it’s different — really super different — than the competition. Build a message around that. Then feel free to A/B test the heck out of it.

Bottom line. If the messaging associated with your growth hacking came from inside the company rather than the customers, it’s not a brand. And without a brand, when the competition or misstep happens (and it will happen), you’re at #delete.