Lumo Lab brand insights

Tech Sector Branding

Driving Revenue Growth and Customer Retention

In the highly competitive tech industry, strategic branding is a crucial factor in driving revenue growth and customer retention.

A well-executed rebrand can be a vital inflection point for innovative tech startups seeking accelerated growth. However, there are common industry pitfalls to be aware of when developing a brand that resonates with key audiences, including customers, talent, investors, and directors.

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The Importance of Emotional Connection.

According to a study by The University of Sydney Business School and Hotwire Australia, tech brands often fall into the trap of prioritizing product benefits over emotional and human connections with buyers.

The B2B Elements of Value Pyramid, as discussed in the Harvard Business Review, suggests that while functional elements are important, subjective considerations, such as reducing anxiety and fostering strong cultural alignment, play a significant role in purchasing decisions.


HBR suggests that while buyers and sellers in B2B companies still spend most of their energy on Functional Elements (Level 2) - elements in Level 3 that focus on the 'Ease of doing business' is where subjective elements begin to step in as strong motivators that can be identified and prioritised through brand messaging to shift buyer behaviour.

"Subjective considerations such as whether a product can reduce anxiety play a large role in purchases."

Pitfalls to Avoid

Sticking to Conventions. Brands risk being bound by sector and industry conventions, which can hinder problem-solving and market visibility.

Additionally, leaning towards the loudest voices in the team can create a groupthink mentality, stifling the identification of the most effective solutions.

Blending In. The tech industry provides a clear example of the challenges associated with brand homogenization. In the early 2000s, many tech companies gravitated towards the color blue in their branding, associating it with trustworthiness, reliability, and technology.

While these are positive associations, the widespread adoption of blue has made it difficult for brands to stand out and convey innovation, leadership, and differentiation.

"The widespread adoption of blue has made it difficult for brands to stand out and convey innovation, leadership, and differentiation."

This approach favors established giants, making it even more challenging for smaller or new tech companies to differentiate themselves.

The Impact on Consumer Recall and Recognition

Blending in with industry trends can have a detrimental effect on consumer recall and recognition. When consumers see a blue logo in the tech space, their minds might not immediately link the logo to a specific company, especially if the logo's design lacks distinct differentiation.

This lack of distinctiveness can lead to reduced brand recall, making marketing efforts less effective and potentially slowing customer acquisition and growth.

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ABOVE . To connect with a sense of leadership and innovation, Micromine established it's own distinct branding system, that separates it from other competitors.

Drew Usher, the lead researcher and Brand Strategy Director at Hotwire Australia

“Our study found that tech scaleups focus on traditional and rational ways to communicate their brand. The risk is that it is holding them back from reaching their full potential.
“Branding is a powerful yet undervalued tool by most tech scaleups, which prioritise product over brand. Striking a balance between function and emotion in brand communications is a huge opportunity.
"If a scaleup were to change certain levers within its brand toolkit, it could see a 20 percent increase in interest from people.”

The Importance of Distinctive Visual Branding

Beyond Tech: The Automotive Sector

A recent study by Edelman found that 81% of consumers need to trust a brand before making a purchase. Visual branding is a powerful tool for building trust and creating a distinctive identity that sets your company apart from competitors. Take the automotive industry, for example. For years, car manufacturers have played it safe with limited color options, resulting in a sea of black, white, silver, and gray vehicles on the road. While this conservative approach might find broad appeal, it also makes brands and models less distinguishable from one another.

However, brands that have dared to offer unique colors or distinctive design features often enjoy a passionate niche market. Tesla, for instance, disrupted the auto industry not only with its technology but also with its minimalist branding and unique design aesthetics that stand apart from traditional automotive brands.

By understanding their customers and demonstrating authority through intentional branding, Tesla has cultivated a loyal following and driven impressive conversion rates.

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Four key takeaways:

Emotional connection with buyers is often overlooked in tech branding strategies.
Brand homogenization risk increases with sector conventions, like the widespread use of blue.
Generate warm leads, and cut down cold leads that hurt your bottom line on excess qualifying time.
Build your brand prestige, by effectively leverage your strategy, while remaining brand-cohesive.
Distinctiveness in branding enhances consumer recall and recognition, vital for market differentiation.
Balancing function and emotion in brand communications can significantly boost consumer interest.

The Role of Design Language in Customer Engagement

how distinctive brands can influence buyets

A well-crafted design language can significantly impact customer engagement and conversion rates. According to a study by the Interactive Advertising Bureau (IAB), 67% of consumers say that the quality of a product image is "very important" in selecting and purchasing a product online. This highlights the need for a cohesive and compelling visual narrative throughout the buyer journey.

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Tech companies must prioritize savvy and strategic branding to build a strong presence in the marketplace and engage effectively with key audiences.

Some companies now use a range of colors and textures in their sub-brand marketing to classify product categories and create a more nuanced expression. By allowing the broader branding system to embrace a wider color palette, these brands can establish more unique positioning and better connect with their target audience.

Leveraging Visual Branding to Influence Conversion Outcomes

To leverage visual branding effectively and drive conversion outcomes, Marketing Managers and Directors should consider the following strategies:

  • Conduct thorough market research to understand your target audience's preferences and expectations regarding visual branding and design language.
  • Develop a distinctive visual identity that sets your brand apart from competitors and resonates with your target audience.
  • Ensure consistency across all touchpoints, from your website and social media profiles to product packaging and advertising materials.
  • Use high-quality visuals, such as images and videos, to showcase your products or services and create an emotional connection with potential customers.
  • Continuously test and optimize your visual branding and design language to improve engagement and conversion rates.
  • Conclusion

    By avoiding common industry pitfalls, such as sticking to conventions and blending in with competitors, tech brands can create a distinct identity that fosters emotional connections with buyers and drives revenue growth and customer retention.

    Branding decisions should be supported by data and aim to differentiate the company from industry giants, ultimately leading to increased brand recall and recognition.

    Some companies, now use a range of colors and textures in their sub-brand marketing to clarify and separated our their offering for greater clarity.

    In such cases, the original colors of a master brand may shift to purely monochromatic symbols.

    This allows the broader branding system to stretch and widen color concepts for more nuanced expression and unique positioning.

    From this perspective brands can better understand and more deeply consider how their offering connects with users.

    Our workbook below, provides brands a easy step by step process to build out your brand messaging with depth.

    By connecting with higher level needs in Bain & Co's Elements of Value, Hyundai and Kia are forging a new realm of visual literacy in automotive design, by giving human connection a higher focus. Korean auto brands are shifting very intentionally into this territory to align with the increasing Visual Literacy of global consumers as well as the East Asian consumer which considers vehicles as status symbols.

    Four key takeaways:

    Identifying your tribe aligns with values and vision, guiding like stars.
    Focus on what customers can achieve with your product, suggests Jason Fried.
    Generate warm leads, and cut down cold leads that hurt your bottom line on excess qualifying time.
    Build your brand prestige, by effectively leverage your strategy, while remaining brand-cohesive.
    Scott Beckman says customers buy emotions, not features or benefits.
    Bain's Elements of Value enhance offerings, meeting a spectrum of desires.

    Brand comms

    Brochures

    websites

    campaigns

    product imagery

    expo Signage

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    The Dream Destination.

    Now that you have clearer idea of the values you're addressing its time to consider. What secondary flow-on benefits will they experience?

    What positive emotions are a response to the flow on benefits?

    As we address the aspirations and the emotional payoffs for our customers, we are able create a bond that people will rave about.

    People are motivated to avoid emotional pain.

    By identifying the emotionally-driven reasons people choose your product or service allows you to develop language that speak right into their 'wants'.

    Where do you win?

    Consider, what are the areas where you aspire to deliver unmatched outcomes and value to your customers?

    What comes next?

    Part 3 - Defining your brand statements.


    Lumo Lab's Brand Strategy Workbook is here.

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