What does brand strategy mean to you?
Do you use your strong brand to retain your current customers? Orrr… Do you use it to attract and acquire new ones?
Airbnb is an really interesting case study for a brand done right. Here’s why brand strategy isn’t just about acquiring new customers like many think it is.
Customer acquisition vs. customer retention: Which one is better?
There's always an ongoing debate in the marketing world about whether it's better to focus on acquiring new customers or doubling down on retaining the ones we already have.
Well, the truth is, it’s far cheaper and easier to retain your customers than find new ones. That’s a proven fact.
Your most valuable customers are the ones who keep coming back. But if you can strike the right balance between acquisition and retention, you’ll grow like crazy. Hockey stick-kind of growth! 📈
This brings me to Airbnb who’s made some interesting strategic decisions, resulting in their most profitable quarter ever in Q4 2022.
How Airbnb had their most profitable quarter yet
Airbnb's Q4 2022 earnings were impressive, to say the least.
But what caught my attention was how they managed to earn so much.
They cut performance marketing (acquisition) and focused more on brand building and PR work (retention).
What does this mean? A strong brand plays a pivotal role in …
- attracting hungry customers and
- keeping existing ones loyal to your business.
How to spot a strong brand
Let’s break it down:
- Initiates conversation — A strong brand makes you think why that business exists, what purpose it serves in the market, etc. In Airbnb's case, it's all about creating a sense of belonging for travelers and providing unique accommodation experiences. Everyone has an opinion about Airbnb. That’s right: Their brand starts a conversation.
- Differentiates you in a crowded market — Let's face it, the accommodation market is pretty saturated. A strong brand like Airbnb’s helps you stand out from the competition and be memorable to potential customers. Airbnb isn’t just for travelers, no. Airbnb is for the ones who want a comfortable, local, authentic experience.
- Creates a memorable customer experience — A strong brand goes beyond your logo and tagline. It’s the entire customer journey, every touchpoint leaving a lasting impression on your customers. Naturally because it plays in the travel space, Airbnb does this flawlessly – usually.
- Encourages word-of-mouth and organic growth — When you have a strong brand, people are more likely to talk about it and recommend it to their friends and family. Organic growth is more emotionally powerful than traditional customer acquisition practices like paid advertising.
5 things to steal from Airbnb’s winning brand strategy
One of the reasons why Airbnb's brand has been so successful is because it focuses on both sides of their marketplace model – hosts ****and ****customers.
They’ve invested so many resources into understanding their needs, preferences and expectations – making sure they don’t play favorites between the two.
This ain’t just "fluff marketing." It's an integral part of Airbnb's business strategy.
But what can you learn from them?
- Invest in both acquisition & retention — Allocate resources to both brand awareness and customer acquisition. While a strong brand can help with organic growth, paid advertising can give you a much-needed boost in visibility. Both can help!
- Find the right balance — The optimal mix of brand awareness and customer acquisition will vary depending on your business strategy, product or service, customer persona, industry, economic timing, and so many other factors. Experiment with a whole lot of strategies and keep a close eye on your metrics to figure out what works best.
- Prioritize customer experience — Always prioritize a memorable customer experience, which then translates to a memorable brand. A great experience can turn first-time customers into loyal ones and keep existing customers coming back for more.
- Stay agile & adaptable — Market conditions change super quickly, so stay on your toes and adapt as needed. Airbnb's shift from performance marketing to brand building is the prime example of adaptability.
- Keep your brand relevant — What’s your brand's positioning in the market? Make sure it resonates (and continues to do so) with your audience. Listen to customer feedback and make changes to your product and experience if necessary.
Even though Airbnb was already synonymous with travel booking when they made this strategic shift, they doubled down on their brand and had a historic quarter. See what happens?!
Airbnb: Prime example of finding the right balance between customer acquisition and retention.
I might be biased but I believe so strongly in the power of a strong brand.