Brand awareness and brand recognition are business-critical when developing your online service. Because it allows enterprises to build trust in the overall business operation, not only trust in a single service or product. This approach should be adopted by both startups in their early stages of development and online services that already count paid subscribers.

A service provider that enjoys high level of customer trust and brand recognition is able to enhance its products on the go while relying on a loyal customer base. Moreover, brand awareness allows any technology company to release short-term product versions betting on future service tweaks or major updates that will improve the product at a later stage.

How global brands use brand awareness

Companies like Apple, Nokia, and Microsoft managed to build brand recognition that goes far beyond a single product or a product line. They all created global loyal customer base through cleverly communicating their brand and corporate vision, thus becoming recognized at a global scale and being trusted by their customers even when they have no new product or service to offer.

Issues with antennas of certain iPhone models did not ruin Apple’s reputation as a leading smartphone manufacturer, for example.

Nokia relied on their Symbian OS to manufacture smartphones before Microsoft acquired their phone making business. Despite Symbian not being as popular as Android or iOS, the average loyal Nokia user did not complain much about the functionality and the overall ability of the Nokia phones. After being in stealth mode for five years, Nokia suddenly announced plans to restart their phone making business, relying mainly on brand awareness that was not harmed during the years when they were not market players in a very competitive market.

Microsoft, for their part, have released a few versions of their flagship Windows operating system that are largely considered unsuccessful. Windows OS versions like Vista and Windows 8 never gained traction; nonetheless Microsoft did not lose market share due to an OS version that is not adopted by users. Actually, Microsoft managed to struck deals with all major PC vendors worldwide, which sell their PCs with pre-installed Windows operating system. This boosted further Microsoft’s brand recognition and bought them time to work on viable products that replaced these unsuccessful versions – Windows 7 and Windows 10, respectively.

The importance of strategic message and vision

A global market for products, and especially online services, requires more than straightforward customer engagement and will increasingly rely on strategic vision. This strategic vision should incorporate a core message that appeals to the customers and creates brand awareness that goes beyond the specific service or product.

Modern online customers tend to select a service or product because of the brand story behind the service, not only because of its usability or advantages, especially when a global marketplace offers quite similar service offering in literary any market niche.

Take for example the booming market for messaging apps where behemoths like Skype and Facebook Messenger make any effort to dominate the global market. Despite their efforts, a good number of independent messaging apps and communication services see their market share grow despite lacking certain functionality provided by the large multinationals. Customers lack confidence in the established brands to protect their privacy and security and increasing number of app makers take advantage of this lack of trust.

A growing number of startups in this niche build brand awareness based on the obvious need for encrypted communications, developing brand recognition around features like encryption, peer-to-peer, and increased privacy. Most of them bet on popular slogans for increased digital safety, which serves them well in a market where the big market players cannot establish their online services as a trusted solution in terms of privacy and security. Thus, those who bet on safety and privacy in the messaging niche provide a strategic message that is well accepted among a growing global customer base.

The other side of the coin

The aforementioned tech startups really need to develop recognition for their brand to be competitive. However, established brands need to sustain brand awareness too.

Have you ever wondered why the mergers and acquisitions market in the field of online services and digital products is so active? New online services and products emerge every day. Some of them are good and some are of average quality. Briefly speaking, most of the established with more than five years on the market tend to be good but not disruptive. Thus, established market players need to retain their brands by acquiring innovative startups that could disrupt the status quo.

If you keep a good eye on the M&A market in the tech industry, you can easily spot a trend. This industry trend shows that most acquisitions in the field of online services end up with closure of the acquired service without being incorporated within the product offering of the buyer. The closure often occurs within months after the acquisition. Thus, the large market players are able to acquire tech know-how and in the same time save on service and product development by simply shutting down the newly emerged competitive service.

This also allows large companies to avoid investing in extensive product development and keep their brand as a leading service on the market without providing disruptive technologies. In some cases the acquired brand could add customers due to its respective good brand awareness. This is an approach based on financial figures, embedding the new technology into our service will cost $xxxxx, while acquiring the emerging competitor and thus retaining our leadership as a brand will cost $xxx. Simple, right?

This is how the market works quite often, and this is the reason we witness many popular brands that provide in fact average service while investing heavily in marketing to build brand awareness.

Strategic implications of brand awareness

You must invest significant time and effort if you want to build recognizable brand and you plan to implement an exit strategy at a later stage. Or maybe you want to grow as an independent company that will place an IPO later on. Well, such being the case you have to invest even more time and effort to build brand awareness.

To put it simply, you definitely need an above-the-average online service or product to get foot on the market and survive in today’s competitive global marketplace. Nonetheless, if you fail to develop a noticeable brand you will probably fail.

The hard part is to find the right balance between building brand awareness and developing your service.

Some managers invest too heavily in marketing and brand building, eating the resources required to sustain a competitive service. Others invest in product research and development without realizing the power of brand recognition, which may lead to situations where viable services disappear because customers do not recognize them as reliable brands.

Whatever your business objective is, stack the odds in your favor, by finding the right balance for your online service and making any effort to develop a useful and competitive product while building a recognizable brand.