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The Big Difference Between Building a Brand vs Building a Business [Long-Term vs Short-Term Thinking]

The Big Difference Between Building a Brand vs Building a Business [Long-Term vs Short-Term Thinking]
The Big Difference Between Building a Brand vs Building a Business

Imagine you've just clicked on an eCommerce guide to building an online dropshipping business.

The first thing you're told to do is find your products, then your supplier, and finally, start selling your products through paid advertising.

99% of business 'gurus' teach this style of business - this is exactly how business works.

Building a business is not a difficult process at all - you figure out what you're offering, you figure out how you'll supply it to your audience, then you go out and find those who want it.

However, a brand is something different, it's another organism in and of itself.

It's the difference between Coca-Cola and the unbranded fizzy drink in your local supermarket.

Where a business goes out to find new customers, a brand focuses on the people it already has in its circle to create value.

A brand focuses on maintaining contact with those that it touches.

Up until the 3rd step - finding your customers, this is where brands and businesses diverge completely.

While a business focuses on making sales by finding prospects, a brand focuses on building a community around its products or services - an engaged community that leads to sales, referrals, and business growth.

I'll admit - building a brand is much more difficult than running a few ads to make sales on your new eCommerce store.

So why waste your time building a brand? 

Here's the big difference between building a brand and building a business.

More than just a product

The Big Difference Between Building a Brand vs Building a Business [Long-Term vs Short-Term Thinking]

We all know businesses as an organization that offers products and services that solve a problem for a specific group of people.

For example, I built Hawk Prospecting to solve a big problem most agency owners face - finding and reaching qualified prospects who need their services.

However, something like Lusha, at the point they're currently at, is more focused on turning their business into a brand.

Whenever you focus on building a brand, you're accepting the fact that you're no longer just a product or service, but you're now a singular community.

Let's look at another example, one that more people might be aware of.

One person that I'm almost jealous of (in a good way) is Russell Brunson, the founder of Clickfunnels.

Russell Brunson, along with his co-founder, built a funnel-building software called Clickfunnels.

There are dozens of them on the market, however, Clickfunnels is the most successful.


The answer is simple - Russell Brunson built a massively engaged community around his business.

See, a brand is a lot more valuable than a business, especially in the long run.

This is because attention is the most valuable thing in today's world, and communities are where attention lies.

It's much easier to sell your products to a community rather than having to go and advertise all over different platforms for attention.

A brand educates its community, spreads valuable content that helps the community, and allows them to grow together.

In today's day and age, people have a ton of choices - there are not as many monopolies or market leaders as there were a decade ago or so.

With this increased competition, consumers are after more than just a product or service - they're after the experience.

Building a community gives your audience a chance to experience something they can't find elsewhere - and that's very important.

Brand loyalty, not business loyalty

The Big Difference Between Building a Brand vs Building a Business [Long-Term vs Short-Term Thinking]

Have you ever heard of the term, business loyalty?

Most likely not, because it does not exist.

On the other hand, though, brand loyalty does exist and as the name suggests, it's only possible with brands.

Why do you decide to buy Weetabix over other cereals in the supermarket?

Weetabix is quite a lot more expensive, and in fact, it's not much different from all the other brands.

The reason is because of brand loyalty.

You've been buying from Weetabix for a long time, and you've grown to trust the brand and its products.

Therefore, you're not going to switch to another product that's almost the same due to small changes in price or other reasons.

Imagine you're an Amazon seller who primarily gets their traffic and sales through PPC ads - you're at a big disadvantage against brands that have their own community on social media and a website.

This is because a lot of people might go on Amazon and search for a specific brand, rather than a broad product type since they're already familiar with them.

Amazon's customers all belong to Amazon - although they may buy your products, they're finding you on Amazon and so they're not your customers.

However, if your customers are coming from your social media or from your website to Amazon, then you can classify them as 'your customers,' since you already have contact outside of the platform.

When you focus your time and energy on building a brand, you're also building brand loyalty along with it.

You'll start to build a community of people who truly like your products and will always buy from you no matter what.

For example, I'm a massive Samsung fan. Although I like iPhones, I believe that Samsung makes far more superior products, and it's something I don't think I'll change anytime soon.

Increased perceived value

The Big Difference Between Building a Brand vs Building a Business [Long-Term vs Short-Term Thinking]

Apple is one of the biggest companies in the world, purely because of the community it's built around its products.

A few decades ago, Apple almost went bankrupt until Steve Jobs decided to step back up into the CEO position and revive the company.

Along with his return, he introduced new devices that revolutionized their category - the iPhone, iPad, etc.

Today, Apple launches new phones at premium price points and has 1000s of people queueing up on release date to purchase their phones.

I personally believe that buying a phone once a year is over the top and unnecessary, however, hundreds of thousands, even millions of people disagree with me on that.

They believe that owning the latest Apple product is not about the phone itself, but the perceived value or status they get when they buy the new iPhone.

Owning an iPhone, iPad, or even a Macbook instantly gives you a status no other person has unless they also own that device.

Their insane prices are justified because the community and hype around Apple products are massive. Apple customers have all agreed on this consensus and so Apple will always release new products at premium price points that everyone immediately starts buying.

More recently, there's been a trend towards NFTs and digital assets, in general.

Every day,  dozens, maybe even 100s, of new NFT projects are launched. Out of those, less than 10% succeed.

The reason being is that there is simply no demand for your products that drives the value of your project up.

NFT projects are often made in limited quantities. The prices fluctuate depending on how much demand there is for a given NFT.

When there's a lot of demand, prices are high, however, when there's no or low demand, prices are low.

A lot of NFT projects drop with minting prices exceeding 0.1 ETH (around $400), but fail to realise the importance of the community aspect.

The only way to justify high prices is if there is demand for your products or services at that price point.

Apple's customers are more than happy paying 1000s of dollars for their products - it's the same with NFTs.

Holders of the Bored ape Yacht club NFTs are happy paying 100s of thousands because they understand the perceived value behind owning one of these NFTs.

When you build a brand, you're not only throwing a label on your products or services, you're also increasing the overall value that you bring to the table.

Easier (and cheaper) to grow

The Big Difference Between Building a Brand vs Building a Business [Long-Term vs Short-Term Thinking]

The final reason is also one of the most important reasons why you want to build a brand over a business.

Like we've established already, attention is the most valuable commodity of our day and age.

Wherever attention goes, money flows.

Brands last, while businesses don't.

Whenever there's a massive change in the market, those that survive are those who had a brand.

Normal, every day, businesses find it extremely hard to stand the test of time - it's a leading reason why many entrepreneurs fail to break through the 5-year statistic.

When you're dealing with a brand, you have a community of people ready to support you.

You have the ability to raise the price of your products and services without hurting the demand for them.

Think of a business that solely competes on price - these are things like supermarkets.

A few weeks ago, I was talking to my friends and mentioned how supermarkets have profit margins around 5% - they immediately retaliated telling me, "They wouldn't be in business then."

After doing a quick Google search, I found that I was indeed wrong - profit margins are 1-3%.

See, supermarkets find it very difficult to build brands - they're not the sort of business that can become a brand.

Therefore, as soon as a supermarket decides to increase its prices, customers have a wide range of choices to switch to, and they will.

This is a bucket you don't want to fall into - with a brand, you have the freedom to raise prices, and see an increase in revenue.

All these factors combined make it much easier to scale your business over time.

The increased revenue gives you the freedom to hire new people who might be crucial to your business' growth.

You're able to introduce new products, spend more on marketing, and increase your profit margins too.

The community is also a marketing strategy in and of itself. Community members spread the word about your business, which is the most effective form of marketing.

No Facebook ad will ever beat word-of-mouth marketing.

This, once again, saves you much more capital which can be reinvested into growing the business.

After all, it's much cheaper to sell to customers you already have than cold audiences!

Those were the big differences between building a brand and building a business.

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