Applying Quiet Compounding to Brand Building
An article by Krishna Iyer
10th October 2024, Mumbai: In the realm of finance, as eloquently explained by Morgan Housel in his article “Quiet Compounding,” the most impressive results often come from the quiet, patient accumulation of wealth over long periods. This principle of steady, unseen growth can be seamlessly applied to long-term brand building in marketing, where the most enduring and impactful brands are those that evolve and grow subtly but persistently.
“Nature is not in a hurry, yet everything is accomplished,” said Chinese philosopher Lao Tzu. This idea encapsulates the essence of quiet compounding, whether in nature, finance, or brand building. Let’s explore how this principle applies to brands globally and in India, using various examples to illustrate its effectiveness.
Internal Benchmarks Over External Validation
Much like the financial wisdom of focusing on internal satisfaction rather than external comparison, successful brand building requires an emphasis on internal goals and values. Global brands like Apple and Nike have continuously repositioned and rejuvenated themselves based on their core values and customer feedback rather than solely reacting to competitors. Apple’s shift from being a computer manufacturer to a lifestyle brand, and Nike’s emphasis on innovation and inclusivity, show how brands can quietly evolve to meet their long-term vision.
Tata Tea’s “Jaago Re” campaign connected the brand with audiences by addressing social issues, reinforcing its focus on societal impact. The brand’s “Many India’s” hyperlocal strategy customizes products and marketing to suit regional preferences. In the south, Tata Tea offers stronger blends, while in the northeast, lighter options are available, catering to local tastes. By incorporating regional languages, traditions, and festivals in its marketing, Tata Tea strengthens its connection with local consumers and competes effectively with regional brands, fostering loyalty across India’s diverse markets.
Acceptance of Unique Paths
Housel’s insight into the uniqueness of individual financial paths applies to branding as well. Each brand’s audience is different, and what works for one may not work for another. Starbucks, for instance, has mastered the art of audience calibration. By understanding the specific needs and preferences of its diverse customer base, it has successfully customized its offerings and experiences across global markets, ensuring relevance and loyalty without copying competitors.
Unilever has similarly mastered the art of audience calibration in the diverse Indian market. Its brands, such as Dove and Surf Excel, have tailored their messages and products to meet the unique needs of Indian consumers. Dove’s “Real Beauty” campaign focused on Indian women and their perceptions of beauty, while Surf Excel’s “Daag Acche Hain” campaign highlighted cultural values and familial bonds, resonating deeply with Indian audiences without mimicking competitor strategies. In an era when up-starts brag about a unicorn/decacorn status, a brick-and-mortar brand like Surf stands tall as the first Indian home and personal care brand to cross $1 billion in annual sales.
Independence Over Social Dunking
Independence in brand strategy, similar to financial independence, can lead to authentic and lasting brand identities. Consider how companies like Google have approached logo design upgrades. Google’s logo evolution has been subtle yet significant, focusing on enhancing user experience and digital clarity rather than making drastic changes for the sake of visibility. This approach maintains brand recognition while allowing for modernity and innovation.
Asian Paints, a leader in the Indian paint industry, has maintained its independent approach to branding and marketing. Over the years, Asian Paints has transformed its image from a traditional paint company to a provider of complete home solutions, including décor and design. Its branding strategies have evolved subtly, focusing on customer experience and technological advancements, ensuring the brand remains relevant and recognizable.
Long-Term Endurance Over Short-Term Gains
Just as long-term investors prioritize endurance over short-term performance, brands that maintain consistent messaging over time build stronger connections with their audience. Coca-Cola is a prime example of this. Its messaging around happiness and togetherness has remained consistent for decades, allowing it to weather market changes and trends. This steady approach fosters deep emotional bonds with consumers, creating brand loyalty that outlasts fleeting trends.
Amazon’s rise from an online bookstore to a global e-commerce and technology giant is another example. Its growth strategy has been characterized by patient, continuous expansion into new markets and product categories. By focusing on long-term goals rather than immediate profits, Amazon has compounded its brand value quietly but significantly over time.
Closer to home, Marico, known for brands like Parachute and Saffola, has transformed from a traditional commodity player to a consumer goods powerhouse. This transformation was driven by a focus on health and wellness, aligning with changing consumer preferences. Marico’s quiet but consistent efforts in brand building, product innovation, and market expansion have compounded its growth over the years.
The principles of quiet compounding—focusing on internal benchmarks, accepting unique paths, valuing independence, and prioritizing long-term endurance—offer profound insights for long-term brand building. Brands that adopt these principles can grow quietly yet powerfully, creating lasting value and deep connections with their audiences. Just as nature’s quiet, persistent efforts lead to awe-inspiring results, so too can brands achieve staggering success by compounding their efforts over the long haul.
As the old marketing adage goes, “Rome wasn’t built in a day, but they were laying bricks every hour.” So keep laying those bricks, one quiet, consistent effort at a time. And remember, in the world of brand building, sometimes the best strategy is to simply sip your tea (preferably Tata Tea) and keep going.
The author is Director – Marketing, MullenLowe Lintas Group India
(The article was first published on ET Brand Equity)