“A brand is no longer what we tell consumers it is. It is what consumers tell each other it is”
Scott Cook, Intuit co – founder and director at eBay and Procter and Gamble, understands what it takes to build a brand. Cook and his partner faced a lot to fill the gap between launching their first financial software and making it a worldwide brand. What really helped their product gain traction was word of mouth. Both Cook and his partner got housewives from Junior League to use the software to reconcile their bills. They called this as usability testing. That’s how they improved the product and turned it into a powerhouse brand.
What makes superstar brands like these gain traction? What makes customers trust these brands, buy from them repeatedly and eventually turn into raving fans?
It’s branding that makes the difference! Let’s understand how branding seeps into the real world.
Die hard Apple fans like us stand in long queues to grab Apple products at their launch. Our life seems impossible without Google search engine and mail. We are way too emotional about the French Press served at Starbucks. What things are at work when it comes to these big league brands?
Is it just the flashy logos, elevated marketing function and big budget advertising campaigns that makes people stay loyal to them? Certainly not! Infact, if you see Apple, Google, Intuit and all the big brands, it’s the value they create that earns them this fan following.
And if you’re thinking brand building is only a thing for these international giants, you’re getting it all wrong.
You too as a small business want your customers to come back to you. You need to get into the minds of your target audience and earn their trust and loyalty. And for that to happen, you need to create that stellar brand experience each time they come in touch with it. But it’s no easy thing to achieve this in today’s inbound age.
This is because it’s utterly different the way customers interact with brands today. This again is set to evolve in the course of time. The billboard ads, flashy magazine ads, direct mailers etc sure got you a lot of business in the past . But you never knew exactly who is coming from where? Or what exactly got them to you?
This is where digital world comes as a blessing. It gives you the power to track customer activity and behavior. You know the touch points of your customers’ journey and how they engage at various stages of this customer journey. This gives you insights on
- how to re-target these visitors,
- generate content that converts,
- tweak marketing campaigns and
- make changes to sales funnel stages to reach your target audience.
In addition to this, your customers are bombarded with burst of information each day. Therefore, it’s challenging to gain customer loyalty for your brand amidst this noise.
So before we get down to understanding why branding is important for your business , let’s first understand what all things make a brand.
What Is Branding?
Branding is all the things you do that adds to what your customers think and feel about your company. It’s everything from your first encounter with the customer, brand voice, communication, value proposition to sales, onboarding and retention. The meaning of branding is widely misunderstood. People, including few marketers, usually define branding as a company’s logo, name, overall design, look and feel, trademark etc. But it is just not about the external look and feel of the company’s offerings. It’s a whole lot more.
Author and brand expert Denise Lee Yohn defines branding the right way in her book ‘What Great Brands Do’. She says:
“ a brand is a bundle of values and attributes that define the value you deliver to people through the entire customer experience. In addition , it’s the unique way of doing business that forms the basis of your company’s relationships with all of its stakeholders. Your brand is what your company does and how you do it. Your brand is not what you say you are—it’s what you do.”
Brand building is nowhere limited to marketing and advertising. Infact, brand influence is an outcome of how you use your brand to grow your business. Marketers usually invest huge sums of money to fire up brand communication efforts as a part of brand building initiative. With increasing social platforms and marketing initiatives, this seems obvious and indispensable. But, the scale of your ad spend doesn’t really guarantee a great brand. What really works is using your brand as a strategic tool to drive business growth.
Now that you know what branding is all about, let’s understand how it can help your business.
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Why is Branding Important for Your Small Business?
Branding is the backbone of your business growth. If you still do not have brand building strategies at place, you’re already losing your share to competitors. So before getting into the ways in which branding can boost your business growth, here are some numbers that point out why branding is inevitable.
- B2B companies with brands that are perceived as strong have higher EBIT margins than others
- 77% of B2B marketers say that branding is critical for growth
- On an average 5 – 7 brand impressions are necessary before someone will remember your brand
- 89% of business readers say that a brand from where a piece of content comes is important. Also, 85% of marketers say that the primary reason for producing content is to build the brand and positive perceptions of the company.
So, here are the ways in which branding can help you drive business growth.
1. Increased Customer Loyalty
Great branding gets your customers back to you for repeat purchases and adds to the lifetime value (LTV) of every customer . Not only that, it turns them into your brand’s raving fans.The experience they have, right from awareness to value creation, helps them place that trust and develop strong affinity towards your brand. 43% of customers are spending more money at brands they are loyal to.
Take for example Apple. Big time fans of Apple products are more popularly called iSheeps or Apple Sheeps. They are blamed for buying anything and everything that Apple rolls out, out of ‘blind loyalty’. Well, you don’t need to break your heads much to understand what magic is at work to have such a fan following. Apple’s technical innovation, product design, creative advertisements, leadership, everything comes together to make it one of the most valuable brands worldwide.
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2. Strong Brand Equity
Great brands have stronger brand equity. Brand equity is your brand’s value which is determined by the feelings and perceptions of customers about your brand. These are, further, an outcome of customer encounters with your brand and their expectations from it. This additional value is the differentiation that you are able to create in comparison to your competitors.
Just imagine your life without Google for a second. No Google means no Google mail, search engine, YouTube, online advertising etc. That seems unthinkable, right? Google’s offerings seep into our lives in a way that life seems impossible without them. What helps Google build that brand equity? It’s the outcome of the value it creates for infinite people through it’s innovation. And the customer satisfaction that it strives for.
Consistently presenting your brand leads to an average revenue increase of 23%. Biggest companies of the world invest in branding to build brands that endure. Outstanding branding initiatives help them to be consistently present and build a brand personality that stands out. And when it comes to brand personality, it’s not just the color, typography and the other aesthetics. It’s also the way your brand acts and communicates with its customers. Customers start recognizing brands that deliver brand messages consistently and repeatedly over time.
You walk into a Starbucks outlet near your place and the one a few miles down the street. Right from coffee to the vibe it gives off, you get the same experience in each outlet. Starbucks is known for its brand consistency. The classic Siren logo on your coffee mug, though has been revamped over the years, she’s there since 1971. Not only that, the uncluttered, minimalist design is common across everything from its store design, advertisement, digital content, to the merchandise. Yes, it’s about the coffee. But it’s more than that – a place between work and home.
4. Enhanced Credibility
Superstar brands have a thing in common – they have the trust of their customers. That’s the real magic of great branding. You will have your loyal fans coming back to you for repeat purchases. This is simply because your customers understand that they’ll get the value they are looking for from you over competitors. They know that your brand will live up to the promise it makes to them and fulfill the expectations they have out of you. Not once, but each time they make a purchase from you.
The luxury watchmaker Rolex has the kind of trustworthiness not many watchmakers can replicate. It may not offer a number of watch complications. But it’s best in what it does. Rolex uses one of a kind steel, has an in- house science lab, builds hand assembled watch movements and takes almost a year to come up with a single watch. It’s known for its quality and efficiency. So its customers know that if they want a mechanical watch that is reliable, functional, good looking and luxurious, it has to be Rolex.
5. Increased Customer Recognition
Branding helps you get into your customer’s mind. Such is it’s potential that customers are able to recognize brands just by looking at the brand visuals or hearing their campaign taglines. According to a research, people see 4000 – 10,000 ad messages each day. Hence, with so much coming their way, it is difficult to emerge and grab their attention. You have to be consistent, creative and unique in the way you act and communicate with your target audience.
Much like the largest beverage company of the world – Coca Cola. With 132 years of refreshing people everywhere and 500+ brands, the red and white Coca Cola logo is recognized by 94% of the world’s population. John S Pemberton, the Atlanta based pharmacist’s curiosity led him to create the soft drink in 1886. His partner and bookkeeper, Frank Mason Robinson, suggested that the logo be written in Spencerian script. This script was used by accountants and Robinson thought this would help company stand out. Not only this, the beverage company adopted other strategies that got them the customer attention. Coca Cola kept the price unchanged for 70 years, promoted it’s unique bottles, came out with catchy jingles and slogans and creative advertising campaigns that sold happiness in a bottle.
6. Increased Bottomline
Out of many things a strong branding can do for your business, boosting its bottom line is one of them. A strong brand can fire up action at every stage of the buyer’s journey. Right from consuming content for understanding their pain points to making a purchase, your customers want to depend on great brands. Thus, branding helps you get genuine prospects, who are less price sensitive and willing to get best solutions for their problems. Even if it calls for paying extra. Not only that, it helps you retain your most valuable customers, which saves you on customer acquisition cost. If you didn’t know, it is 5 – 25 times more expensive to hire a new customer than to retain the existing one. Thus branding helps you earn greater margins, reduce marketing costs and eventually earn greater market share.
Consider McDonald’s, one of the most valuable fast food brands in the world. It’s brand value stood at 126. 04 billion US dollars in 2018 with a revenue of 22. 82 billion US dollars in 2017. The fact that it’s instantly recognizable has made the leader in the fast food industry worldwide. Ronald Mcdonald, the Golden Arches, Happy Meals, family friendly advertising campaigns – McDonald’s has been simply doing it right across the globe, which made it get such revenue numbers.
7. Helps Withstand Crisis
Powerful branding helps you enjoy emotional equity with your target audience. As a result, it becomes challenging to drag your brand through the mud in face of crisis. Well, this is not to say that strong brands do not have to make efforts to remedy the situation. But given their trust and brand’s initiatives to manage crisis, customers becoming a lot forgiving. They take it as a mistake on the part of the brand over a breach of trust.
Cadbury worm case is one such example. The debacle took a hit on brand’s sales which went down by 30%. This was against a 15% hike which company experienced during festive season. But Cadbury managed the crisis notably and won the customer confidence back. It invested Rs. 150 million in machinery to revamp its packaging. The new packaging costed 10% – 15% extra to the company. But it did not pass that price to its customers. Also, it roped in a celebrity like Amitabh Bachchan who not only personified Cadbury brand values but connected well with its Indian audience.
8. Allows For Shared Values
Cult brands are champions of value based marketing. They are valuable not because they sell a product or a service. But because they sell a lifestyle. In fact, 64% consumers say that shared values is the primary reason they have a relationship with a brand. Customers are much informed today and associate with brands taking into consideration values they stand for.
Take the global athletic footwear brand Nike for instance. Nike is known for its innovative technologies. Now, these technologies are not only confined to improving the athletic performance. But also relate to developing production methods to produce sustainable products. It’s Flyknit technology , for example, reduces 60% waste on an average as against cut and sew footwear. In US, where Nike commands 62% athletic footwear market share, 87% of the millennials are willing to pay more to brands that stand for offering sustainable products.
9. Charge Premium Price
Premium branding is synonymous to quality, innovation and prestige. Given that, customers are both loyal to such brands and willing to pay a premium price. They know that they’ll get the real value in return and that is what encourages them to pay a higher price.
Consider Gillette’s Sensor Shaving System. There was a time when one of the main competitors of Gillette got the low cost razors to the market. Gillette first responded to this move by rolling out its own low cost disposable razors. But realizing that this will put them into the value – oriented category, they invested heavily in R & D. And as a result introduced Sensor Shaving System, which sold at 25% price premium over Altra, another Gillette brand.
10. Gets Top Talent On Board
There’s a lot of competition when it comes to attracting best talent on board. Amidst such a competitive climate, branding helps you attract best brains to work for you. The top talent too wants to work for brands who allow them to grow and prosper. Companies like Google, Facebook, Apple etc command such brand authority. Innovative minds want to work for them not just for perks and benefits. They understand that associating with such companies would give them the culture where they can learn and share their ideas freely.
Consider Sundar Pichai. He joined Google as a Vice President of product management. And over the years worked his way to become Google’s CEO.
To conclude, branding is important for a business as it sets a standard in the minds of the consumers with regards to the quality of the product. Moreover, it helps your business sail through crisis and earn premium pricing for your products.
To help you understand the concept of branding and its importance, here is an infographic on why is branding important for your business.