Your Brand Needs a Moat –?Here's Why

Far too often, marketing leaders find themselves stressing out about the next discount they’re going to run on social media or how to tie an email promotion into “National Dog Day.”

Many spend more time than they would like monitoring competitors’ campaigns and running SWOT analyses that produce insight ranging from lackluster to downright disappointing.

Part of the reason for this is a failure to focus on building strategic moats around their businesses.

Economic Moats

The term “economic moat,” coined by Warren Buffett, refers to competitive advantages that are difficult for competitors to duplicate, thus creating a “moat” between a brand and its competition.

Examples of moats include Walmart’s and Costco’s prices, Amazon’s logistics management and loyal Prime members, and Disney’s intellectual property (try replicating the genius of cultural icons like Darth Vader, Mickey Mouse, and Iron Man).

A business’s moat typically falls into one of four categories: Network Effect, Cost, Cultural, or Resource.

The Role of Marketers

Founders and CEOs are primarily responsible for building these moats, but marketing leaders have a significant role to play in developing them, too.

Beyond the obvious brand moat development (Chipotle, Coca-Cola, Nike), marketing leaders can provide input on pricing moats, such as a loss-leader that generates a sunk-cost moat around subscriptions and replenishment orders (think Gillette’s $10 razor and $22 blade refills), as well as network effect moats like Uber and Lyft’s control of supply and demand with surge pricing and driver incentives.

How to Grow in 2025

In 2025, brand leadership and marketing teams should focus on leveraging their brands’ moats in their marketing campaigns.

For example, if there is unmatched emphasis on customer service, campaigns should highlight that superior level of service across all channels.

But what if customers don’t care about the perceived moat? Then there’s no real moat, and it’s time to go back to the drawing board.

CEOs, founders, and marketing leaders alike need to engage in intentional conversations with their teams about moat-building strategies. Often, potential moats are hard to identify or strategize internally, emphasizing the importance of seeking external guidance from Strategic Partners like Fidelitas.

Actions to Take

If the concept of a moat doesn’t come to mind immediately, this is the perfect time to reflect on what sets a business apart and explore opportunities to strengthen its competitive edge.

For businesses that already have a moat, the focus should be on ensuring it is effectively leveraged to resonate with customers and outperform the competition.