Your company has to become more than a set of products, services, employees, and words. A brand strategy is essential in business because the brand experience is heavily tied to company value and long term success.
From a marketing perspective, here are the 10 reasons for branding and why you need to build a brand strategy.
Importance of a Brand Strategy:
- It sets you apart from the competition
Competition is fiercer than ever thanks to globalization. Technology allows consumers to easily compare all of their options. Brands must compete with more than other businesses; they have to compete with an exponentially increasing amount of noise just to get the consumer’s attention.
- Transform your product from being a commodity into something that has a life of its own
Again, the proliferation of products and services is staggering. Many companies that were historically successful find their products have become commodities. Branding can help even a commoditized product differentiate.
- Maximize your brand’s relevance in the heart and mind of your customer
Gaining the attention of today’s consumer is no easy feat. You can’t just “buy” consumer attention anymore, you have to earn it. To earn it, your brand has to be lovable. Customers don’t fall in love with names; they fall in love with the entire brand experience.
- Build loyalty
When you create an emotional connection with consumers, they’re more likely to stick with you. Just think about how much easier it is to say ‘no’ with a quick phone call or email than it is to say no to a person face-to-face. When you create a brand, you create a humanistic connection that makes it harder to leave. It’s a lot easier (and less expensive) to keep a current customer than it is to acquire one. When branding creates an emotional connection with customers who become attached, you get more bang for your buck. All of your marketing efforts become more powerful when they are coming from a strong brand that has a foothold in the hearts and minds of consumers.
- Create trust
Why branding matters? Because people buy from companies they know, like, and trust.
- Expand market share
An example of how powerful branding can be: Learn about how a fitness brand gained international market share and grew annual sales to over $200 million thanks to a strong brand strategy.
- Provide a platform for growth through brand extensions
Brands outlive their products. If your company is only about one product, it dies when the product dies. A brand strategy allows you to have the flexibility to expand the product line. Learn how a dental implant company rebranded to increase awareness and sales.
- Command higher prices
Why do you think people are willing to pay for Grey Goose while an abundance of lower-priced options floods the market?
- Increase shareholder value
A study by Interbrand in association with JP Morgan concluded that on average, brands account for more than one-third of shareholder value. For example, the study showed that the McDonald’s brand accounts for more than 70 percent of shareholder value. (Source: BusinessWeek, Interbrand/JP Morgan)
- Generate stronger financial results
Malcolm Gladwell’s best-selling book, Blink: The Power of Thinking Without Thinking, asserts that buying decisions occur in split seconds instead of long, drawn-out processes, and are based on memories, images, and feelings. This is your brand.
Editor’s Note: This post was originally published in October 2013 and has been updated for accuracy and comprehensiveness.