“Branding is fluff to me,” a potential client said to me in his first phone call. As a branding expert, I’m completely accustomed to hearing and countering this rhetoric, but the irony of the situation was how this particular conversation continued. In the same breath he said, “but my competitor is able to sell at a 15% premium over our brand because clients perceive his name to be stronger.”
So tell me exactly how branding is just “fluff”?
A brand is what separates a product or service from its generic commodity counterparts. The best definition I have ever come across is: “a brand is a concept surrounding your product or service that evokes certain emotions, associations, and expectations.” Those emotions, associations, and expectations are built over time through every touchpoint your customer interacts with. If done well and consistently, brand building is what allows you to justify the value of your offering and its price without needing to devolve into a price war with your competitors.
It’s becoming more and more apparent that branding is not simply a luxury but a necessity in building a strong business. However, for the naysayers that may remain, let’s look at a few statistics.
- Growing love & respect for your brand can grow purchase intent by up to 7x. [QiQ International + Saatchi & Saatchi]
Creating a brand that means something to people brings your offering to the forefront of their “consideration set”, which is the collection of brands they would be happy to choose for a specific category. The more you earn a customer’s love and respect through solid brand building, the more likely she is to purchase from your brand when the need arises. 7x more likely to be exact.
- 82% of investors believe that brand strength and name recognition are becoming more important in guiding them in their investment decisions. [Pitchbook + Reuters]
A client once told me that since he was in a B2B business, he never focused on developing brand equity or recognition, but instead focused on having a stellar product, an excellent sales team, and competitive prices. When it came time to sell the business, the company had to be valued by external valuators who told my client that had the company’s brand held more value, he would have been able to command a higher price during the sale. Brand recognition directly translates into dollars.
- Strong brands yield double returns over the S&P average. [BrandFinance]
In a 2015 study conducted over nine years, BrandFinance – a valuation and strategy agency – clearly showed that companies for which brand value makes up a high proportion of overall enterprise value consistently perform almost twice as well as the S&P 500 average. Strong brands deliver stronger shareholder returns.
It’s clear that branding can no longer be ignored when it comes to the topic of creating solid business value. Instead of leaving it as an afterthought, bring branding to the center of your operation to ensure that every employee understands how he or she contributes to improving brand perception and increasing brand value.
Maya Itani is an award-winning marketing consultant specialized in brand development and strategy. With an extensive background in multinational brand management and entrepreneurship, she capitalizes on her experience working with both large brands and SMEs to help companies of all sizes detangle the complex world of branding and marketing through her firm Itani & Company Marketing Consultants.