Our thinking Quick reads Let the brand wars begin…
Fundraising, investor relations and marketing
May 2019
2 min read

Let the brand wars begin…

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Becoming a brand is not an easy thing to achieve. It is not tied to a declaration, moment of time, or quantifiable accomplishment.

The bestowment of the title “brand” is gradual in nature, driven by the level in which your message resonates with a given audience. This is what drives loyalty, which is the true measure of the strength of a brand.

In the old days loyalty was utilitarian. “I buy these pants because they don’t tear after long periods of use…” (Levi’s)

Things change, however, when competition shows up. At some point, to keep a loyal customer base, buying Levi’s had to be about something more than just the fact that they didn’t “wear” quickly. If not, what would stop the person from buying another equally good pair of pants? Offering a slightly different perspective, should Levi’s not try to influence this decision?

Competition forced Levi’s messaging to evolve. The company had to provide a reason for people to buy their pants that extended beyond the pure utilitarian attributes of their product – although the quality of the product was obviously still important.

Hedge funds and private equity funds were first “bought” for utilitarian reasons. People wanted less risk and higher returns. The capital markets rewarded these first “funds” handsomely. If you achieved the returns the money kept coming. More and more asset managers popped up, however, the inflow of capital kept pace.

But at some point, the number of new funds (competition) started to outpace the available capital. More and more funds started to fail.

Today, hedge funds and private equity funds are facing the exact same challenges that Levi Strauss faced many decades ago. The utilitarian attributes of their product alone are no longer able to attract a sustainable customer base. Like Levi’s, hedge funds and private equity funds have to find ways to inspire interest that extends beyond investment performance – the utilitarian attribute of the “product” they sell.

Let the “Brand” wars begin…

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