In today’s business landscape, where products and services are increasingly commoditized and information transparency is ubiquitous, strong brands have emerged as critical defensive “moats.”
This idea of a brand moat isn’t new. In fact, Warren Buffett has been using it for decades. In order to be successful, he says, a company must have a definite moat – a competitive advantage that allows it to maintain pricing power and better-than-average profit margins.
While technology, features, and even business models can be quickly replicated, a well-established brand creates a psychological barrier that is difficult for competitors to breach.
“Brands are moats… a strong brand is really potent stuff.” (Buffett)
How can we go about building the strongest brand moat possible?
Building an effective brand moat requires systematic focus across multiple dimensions:
- Audit Your Current Moat Strength: Assess how your brand performs on overall resonance, distinctiveness, consistency, and trust relative to competitors.
- Why these factors?
- Resonance is an evolution in the way we think about brand value. Traditional frameworks focused primarily on brand relevance – ensuring your brand was considered within a category. But brands today don’t have the luxury of stopping there. Today’s most effective brands are able to achieve resonance, not just relevance. They’re not just seen and considered but also felt. Organizations that master this are often the ones seen as “customer-obsessed.” They take this obsession and channel it into all aspects of the experience to grow revenue, profit and loyalty faster than their peers.
- Distinctiveness remains critical to breaking through in a world of noise. Distinctive brand assets create immediate recognition and mental availability. These proprietary assets – from visual identity to tone of voice – become barriers that competitors cannot legally or credibly imitate.
- Consistency is crucial for building strong associations over time. Brands that maintain consistent positioning while evolving execution create cumulative advantages that new entrants cannot quickly overcome.
- Trust is key because we buy with our feelings rather than purely rational thought, particularly in areas where risk is high and mistakes carry significant consequences.
- As you go about this audit exercise, resist the urge to downplay the competition. In fact, if you find yourself scoring higher than competitors across all metrics, call in an unbiased partner to help with objectivity. It’s the best guard against complacency.
- Shore Up the Defense: An audit well done is a great diagnostic tool, but it’s only the starting point for further work. With the audit in hand, we can build an action plan to address areas of weakness – and build on sources of strength. Depending on what the audit indicates, you may need to…
- Reassess the Fundamentals: It’s so easy to get disconnected from how customers truly think and what they value (rather than how we want them to think, and what we value). If resonance is low, it’s often a sign to go back to the fundamentals and ensure you have clarity around what you’re solving for in people’s lives. Is that understanding being pulled through across touchpoints? Expressed in a way real people want to connect with?
- Develop Proprietary Brand Assets: Identify moments that matter most in building relationships with customers and focus attention there as you create and nurture distinctive elements that customers can only associate with your brand.
- Build Trust Through Consistency: Ensure brand promises align with actual customer experiences across all touchpoints. Connecting the dots between making a promise and keeping it is critical – and hard to do.
- Measure What Matters: Create ongoing accountability by tracking brand strength through metrics that correlate with business outcomes, not just awareness or sentiment.
The true power of brand as a moat lies in its compound effect – each investment builds upon previous efforts to create a defensive position that grows stronger over time, unlike tactical advantages that can quickly erode.
With disruption the only true constant, the value of brands continually grows. In this world, the companies that deliberately build their brand moats will be the ones that continue to thrive.