Building a Brand by Growing Smaller

Fewer Customers, Fewer Problems

Building a Brand by Growing Smaller

Building a Brand by Growing Smaller

1024 574 Michael Kraabel

Throughout my career in advertising, I always thought my agency needed to pitch and win every client we could. When I went out on my own to start a new company, my instincts were to grow as big and fast as possible. In both cases, I was wrong. If someone had told me to stay small and grow slowly, I would have ignored them. I now realize that growing smaller is likely the right approach 99% of the time.

Today’s marketing landscape is saturated with messages screaming for attention and immediate transactions or sales, making it increasingly difficult for brands to stand out and maintain meaningful connections with their customers. Most brands focus on casting the widest net possible while appearing authentic. The underlying strategy is to grow at all costs, which seems to be the case in virtually all markets and industries, both B2B and B2C.

Customer Familiarity vs. Customer Intimacy

Data is cheap and readily available these days. What you do with your access to that data is often the more challenging task. Within minutes, anyone can easily set up a targeting media campaign hyperfocused on a select group of people who share not only demographic features but also psychographic and psychological characteristics, such as values, desires, goals, interests, and lifestyle choices.

Given my recent entrepreneurial adventures, I’ve started embracing a more nuanced marketing strategy. One that emphasizes the value of staying small while concentrating on a core group of loyal customers and exercising patience in growth initiatives. This new strategy focuses on leveraging the strength of more intimate marketing relationships and the benefits of narrowly focused branding efforts to forge stronger, more personal connections with consumers.

One of the biggest lessons I learned from being in the service business (either in the agency world or a company with customers who require a lot of support) is that “not every potential customer is a right fit for a business” (Godin, 2009). It almost seems counterintuitive to advocate for strategic diminution in scale and selective consumer targeting, a concept best represented by the phrase “growing smaller and selling less.” This approach goes against traditional growth metrics, prioritizing the depth of customer engagement over breadth. Accepting this as a foundational truth, I could write a very good case study on how a company can get this wrong.

Remaining small allows brands to maintain a laser focus on their mission and core values, fostering an authentic identity that resonates deeply with a targeted audience. This approach enables businesses to adapt swiftly to market changes and customer feedback, ensuring they remain relevant and competitive. It contradicts the traditional growth trajectory of expanding customer bases and product lines in favor of deepening value and satisfaction for existing customers.

Focusing on a smaller customer base with deeper loyalty can become more profitable. Companies with deeper brand loyalties might be best served by serving their customers better. Evidence shows that a modest increase in customer retention—merely 5%—can precipitate a profit surge of at least 25%, further proving the inefficiency of broad-spectrum customer acquisition strategies (Reichheld, 1996). This insight underscores the economic rationale for a concentrated customer focus, advocating for an optimized allocation of resources toward the most lucrative segments of the consumer base.

By treating each customer individually, brands can create customized experiences that foster loyalty and advocacy. Godin advocates for the “smallest viable market” concept, emphasizing the importance of focusing on a narrow audience that shares the brand’s values. This approach ensures that growth when it happens, is sustainable and aligned with the brand’s core identity.

Economic Rationalization of Narrowed Focus

Contrary to conventional growth strategies aimed at market share expansion, the “Grow Smaller” approach champions cultivating a smaller, though profoundly loyal, customer base. Kevin Kelly (2008) highlighted this concept in his “1,000 True Fans” theory, suggesting that a compact group of dedicated customers can sustain a business. “A thousand customers is a whole lot more feasible to aim for than a million fans. Millions of paying fans is not a realistic goal to shoot for, especially when you are starting out. But a thousand fans is doable. You might even be able to remember a thousand names. If you added one new true fan per day, it’d only take a few years to gain a thousand. “(Kelly, 2008). This approach is appealing due to its potential to reduce marketing and customer acquisition expenditures while simultaneously enhancing product and service personalization, augmenting customer satisfaction and brand loyalty.

Patience in growth plans is important for brands that prioritize long-term success over immediate results. Strategic patience involves setting realistic goals, investing in quality over quantity, and building a solid foundation of loyal customers who are deeply aligned with the brand’s values and vision. Loyal customers will become the cornerstone of a sustainable business growth plan. They not only provide consistent revenue but also serve as brand ambassadors and sources of transparent feedback. Focusing on these loyal customers involves understanding their needs and preferences at a granular level, often facilitated by CRM systems that track customer interactions and purchasing patterns.

Strategic Implementation

Operationalizing this strategy necessitates a granular understanding of the target consumer demographic, achievable through data analytics encompassing customer preferences, behaviors, and feedback. Implementing Customer Relationship Management (CRM) systems is extremely important in this context, facilitating tailored marketing and product development strategies. “One to one marketing means being willing and able to change your behavior toward an individual customer based on what the customer tells you and what else you know about that customer. (Peppers & Rogers, 1997)”

Social media and community engagement initiatives have become important tools for fostering customer loyalty and advocacy, further embedding the brand within the consumer’s identity. Brian Solis, Digital Analyst and Author, states, “Social media is about sociology and psychology more than technology. It’s the CRM that the customer is in control of.” From this perspective, we focus on understanding and catering to the human element of business, recognizing that in today’s digital age, customers have more control over the relationship than ever before.

Branding and Marketing Implications

This strategic pivot towards selectivity necessitates a reevaluation of branding and marketing practices. Traditional broad-spectrum messaging gives way to nuanced, highly targeted communication strategies, enhancing brand authenticity and resonance with the target demographic. As Pulizzi (2012) contends, the efficacy of content marketing is contingent upon a focused approach, underscoring the superiority of depth over breadth in audience engagement.

This approach prioritizes customer engagement depth, advocating for a resource allocation strategy that maximizes customer lifetime value. The implications for branding and marketing are profound, necessitating a shift towards more personalized and targeted communication strategies. This approach promises enhanced economic efficiency and aligns with a sustainable and ethically responsible business ethos. As such, it presents a compelling model for future business strategies in an increasingly saturated market environment.

“Instead of wondering when your next vacation is, maybe you should set up a life you don’t need to escape from.” Although not directly about branding, this quote by Seth Godin can be interpreted in the context of branding as the importance of creating a brand so targeted and aligned with its audience that it becomes an integral part of their lifestyle, rather than just another option in a sea of choices.

Godin, S. (2009). Tribes: We Need You to Lead Us. Portfolio.
Kelly, K. (2008). “1,000 True Fans.” The Technium.
Peppers, D., & Rogers, M. (1997). Enterprise One to One: Tools for Competing in the Interactive Age. Currency Doubleday.
Pulizzi, J. (2012). Content Inc.: How Entrepreneurs Use Content to Build Massive Audiences and Create Radically Successful Businesses. McGraw-Hill Education.
Reichheld, F. (1996). “The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value.” Harvard Business School Press.



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