The Difference Between Building A Brand And Selling A Product

This is an important distinction to understand. Most people in asset management are selling product, versus building a brand.  Our position, it is best to build brand first. Brand is what creates loyalty. It is the difference maker. If things are close, brand wins. If things get tough, the strength of your brand will keep you in the fight.

How do you tell if you are selling a product, versus building a brand? Well, if you are talking about performance, you are selling a product.

The fundamental difference between building brand and selling product, efforts related to the former are focused on creating affinity for your company, energy expended on the later are in effort to get someone to invest with you, in short, buy the product you are selling. Looking at it from another angle, building brand is all about getting someone to admire what you stand for, selling product involves a business transaction.

Why do you care if someone likes you, before they invest with you?

Pause for a moment and imagine an industry that is hugely saturated with companies of all shapes and sizes offering goods or services that are somewhat homogenous. Yes, this is perhaps difficult to conjure up. Now imagine the dilemma a “buyer” faces in her attempt to choose something to buy, when the core attributes of the product she is interested in are quite similar across competing firms. Do you think the buyer will buy something from a company she is indifferent towards, or a firm that she genuinely respects and likes? The question is obviously rhetorical… I hope. 

In a perfect world, you build rapport with a prospective customer long before that customer is in market for the product you are selling. Talk to them about things you value, how you feel about something, or what is important to you, before you start talking about what you are selling – build brand. In doing so, they will come to respect you. Better yet, if they do become a customer, they will be loyal to you. And as you can see this has nothing to do with performance, volatility, or gains on a disposition.  All that stuff is about the product you sell and not your brand.

I will say this because I feel I have to. Yes, you can build brand around your performance. Although, before doing so, best ask yourself two critical questions. The first, can I guarantee my performance? The second, is it smart to build brand around a promise I don’t know I can keep? I will let you wrestle with how you want to answer those two questions. To me, it is somewhat obvious.