What is Branding & why is it Important?
What is Branding?
As a business owner, the last thing you want to do is spend money on anything that lacks practical value.
But even though it is an intangible asset, a brand is arguably one of the most valuable assets you can develop.
It is important to understand what branding is. And to see why not branding is more expensive in the long run. Without a unique identity to give you a competitive advantage, you will end up having to sacrifice more of your profits to keep customers. Because you might have to compete purely on price, you lose more in the long run.
What is a Brand?
Your brand is what comes to mind when a customer thinks of you. It is what they say about you. Branding is the promise that you make to a customer. It is your image in the eyes of your customer. Branding is the sum total of features that distinguish you from the competition.
Others think that branding is just colors and logos and merchandise. But most Apple users can easily identify an Apple product even without seeing the logo because of certain distinct design elements.
Branding is about telling a unique story, building relationships, creating consistent marketing messages, and having visual assets that all come together to convey the values and personality of your brand.
Branding is not Posing
Branding is not about projecting a fake persona. It is quite the opposite. Honest, authentic brand personalities are far more successful on social media and elsewhere because they ring true.
But branding goes beyond those physical or superficial things and taps into people’s emotions. This is important because most purchasing decisions are rooted in our emotions.
Howard Schultz (@HowardSchultz), the former CEO of Starbucks said that authenticity is what makes a brand last. He should know.
Here are just some of the ways in which you communicate your brand message:
- How employees interact with customers
- Employee dress code
- The atmosphere in your store
- Your price
- The influencers and brand ambassadors you choose to work with
- Product design
- Your packaging
- All your products
- Your CSR activities and sponsorships
- Your advertising
- Public Relations with others
- Your distribution strategy
- Your company culture
- The Website
- Cultural & Organization values
- Your vision
- Your mission
- How you interact with your employees
You can see that the elements of branding are tangible and intangible. While your values are intangible, your logo, physical location, and website are tangibles.
You might be unsure where to start with this branding thing. Start by identifying your unique strengths and what people love most about you. List down the things that make your business stand out.
The next thing is to understand your target market.
Branding is more strategic than tactical because it yields longer term benefits.
Branding matters so much because it makes it that much easier for customers to make choices. How do you decide which bottled water, or bread, or toilet tissue to buy? It is likely that such a decision is informed by the branding of the products.
We live in a world where there is too much of everything. No matter what you are selling, customers probably already have hundreds of options at their disposal. Branding is what keeps you from being indistinguishable from everyone else on the market.
Branding is not just a marketing tool. It can equally be a tool for building the relationship that employees have with their employer.
Branding can give customers something to identify with, something to stand for. When employees feel connected to the company they work for, when they know the values that you stand for, they are more likely to feel more invested and stay loyal.
For employees who need to feel like their work means something, this is a great way to create employee satisfaction.
Employees need to feel proud of the work they do. And when they are working with a reputable brand, they feel proud of themselves and more fulfilled in their jobs.
If the branding is strongly ingrained in the company culture, they also develop a sense of belonging that makes them more likely to stay with the company long term and feel invested in the future of your brand.
It comes out in the way that employees treat customers.
When employees are highly engaged, they treat customers in a way that reflects your company values. And customers notice!
Curatti reports that for 73% of consumers, the quality of their customer experience determines whether they love a brand or not.
Branding helps Small and Big Companies
One of the biggest myths about branding out there is that it is only for large companies with huge marketing budgets. Nothing could be further from the truth.
Everyone including solopreneurs, small business owners, and even individuals stand to benefit from implementing a sound branding strategy.
Even non-profits need to be deliberate about their branding. Black Lives Matters’ raised fist is an easily recognizable symbol to many people worldwide.
Branding Helps you Zero in on your Target Market
While some products seem to be ubiquitous – like Coca Cola, whose logo 94% of people in the world can recognize – there is no product that is really for everyone. Branding helps you to focus on the people who most want and need what you are selling.
You spend more resources reaching out to prospects who are actually interested and who are more likely to resonate with your marketing messages.
When your marketing messages are clearer and more targeted, your efforts become more efficient and you achieve higher leads as well as sales.
With a clear brand message, you differentiate yourself from other products within your niche and this makes it easier for customers to choose you.
You become an authority within your specific niche and prospects view you as more credible as well as trustworthy.
Branding Nurtures Customer Loyalty
Brand loyalty is what essentially keeps customers making purchase after purchase after purchase.
The truth is that people are more likely to stick with what they know and trust than to risk spending money on something they are not sure of. This is why loyalty is so valuable.
Your target market feels more connected to you and they are more likely to remain loyal. And you want more of those repeat customers because they become your greatest and most effective advocates.
Brand loyalty does not grow overnight. It comes from branding your business consistently.
Imagine you are booking a hotel room. When you are faced with a choice between a hotel you are already familiar with from (positive) past experiences and other hotels that you are not familiar with, you will probably go with what you know.
According to statistics from Invest, a healthy 59% prefer buying new products from brands they already know and trust. This means that gaining the trust of your customers is a more than worthwhile endeavor.
This does not just help you to sell your existing products; it also makes it easier to introduce new products into the market because you already have a pool of consumers who are ready to try it.
Loyal customers don’t just buy from you. They also get other people to buy from you. Invest reports that 38% of mothers will buy something because other women have ‘liked’ it on Facebook.
Branding makes for Easier Sales
If you have ever been a front line sales person, you already know this from experience: It is so much easier to sell a brand that is already well defined and positioned because people already know what you are selling.
Good brands have built their brand narrative into their value propositions. Sales personnel find that a well-positioned brand is simply superior to an unknown brand. This applies even if the product is better.
It is an easier sell because they don’t have to work as hard to engage with prospects. Visual elements like color make your product easily recognizable. For example, Forbes reports that using color correctly can boost brand recognition by a massive 80%.
When you have a consistent brand identity across all platforms, your revenue can go up by as much as 23%, according to Forbes.
Branding helps you Demand Better Prices
Customers can willingly pay more than $100 for a simple white T-shirt – if it comes with an Armani tag. This is the power of branding. Customers can pay twice the price for a laptop that has pretty much the same functions as a cheaper option. People are willing to pay more for a cup of coffee because of where it is served.
There is value in positioning yourself as a leader in your niche through branding. This is why branding has real material value, even though many elements of it are intangible. It differentiates you from the competition and allows you to command better prices.
According to Statista, 63% of people are particularly interested in the brand of smartphone they buy. This means that certain brands can command higher prices. The same applies to tech gear and clothing.
Branding Builds Equity Value
The value that your brand adds to your company is called brand equity. Brand equity determines whether your business will be a success long term.
A good brand doesn’t just command higher product prices. It also boosts share holder confidence, which in turn makes for more stable share prices.
Strong brands perform well and give their founders higher share values should they choose to exit the market. Branding is like renovating a home; it boosts its overall value.
We have focused on making a business case for branding, but it is important not to see it as a quick fix. Branding is a slow process. Customers start to remember a brand after 5-7 impressions, according to Pam Moore @PamMktgNut.
Companies that invest in branding want to be leaders in the market place. They want to understand their customers and deliver a consistent experience. The effort does not go unrewarded.
Want to build a brand for your business? contact us for free consultation.