BRAND Strategy

What is a brand and why invest in Branding?

A brand is the way a company, organization, or individual is perceived by those who experience it. More than simply a name, term, design, or symbol, a brand is the recognizable feeling a product or business evokes. Brands, then, live in the mind. They live in the minds of everyone who experiences them: employees, investors, the media, and, perhaps most importantly, customers. Simply put, brands are perceptions.

What is Branding?

Branding is the act of shaping how a company, organization, or individual is perceived.

Customer perceptions themselves don’t go out and buy iPhones. But they are critically important for one reason: perceptions dictate behavior. Even perceptions that we’re unaware of have the ability to profoundly affect how we act. Research in experimental social psychology has shown that while we might think we’re in total control of our actions, our behavior is often influenced by stimuli we’re completely unaware of.

In sum, how an individual perceives a brand (consciously or unconsciously) wholly determines how he or she will engage with that brand. The power of branding hinges a very important truth about perceptions:

Perceptions are malleable.

Branding has the power to shape our perceptions because those perceptions are susceptible to being shaped. They practically cry out for it. Whether we know it or not, we are constantly searching for meaning and order in the world around us. Without it, we’re lost. We want our realities to make sense.

As far as our brains are concerned, there’s no practical difference between perception and reality. What we perceive is what is real to us. This is where the real power of branding lies. If branding can shape our perceptions, and our perceptions are our reality, it follows that:

Branding has the power to shape reality.

It might sound like hyperbole, but in a very real sense, it’s true. The power of branding to architect consumer reality is why companies like Apple spend millions of dollars on it every year. When you effectively leverage the ability to architect reality, you’re able to sway consumers’ purchasing behavior in immeasurably valuable ways.

Why invest in Branding?

The hesitancy of some companies to invest in branding boils down to a matter of perception as well. It isn’t easy to draw direct correlations between successful branding and quantifiable returns. But the simple fact is you can’t put a price on the value of developing a truly authentic brand.

So, why invest in branding? The operative word here is “investment.” Too many companies see branding as just another expense counted against their marketing budget. But when you understand how integral branding is to influencing consumer behavior, you see that it’s more than just a tactic. It is a long-term strategy that can yield measurable returns throughout the life of your company. Take a look at just five of the top returns you’ll get from your branding investment:

Attract Ideal Customers

Central to any branding initiative is customer research. In-depth interviews, focus groups, and online surveys enable you to precisely identify which customer types align with your company’s purpose and values. With this information, you can create clearly defined audience personas and craft marketing messaging that’s specifically targeted at your ideal customers. Ideal customers aren’t just more likely to buy what you’re selling; they’re also significantly more loyal in their relationship with your brand. And few things are more valuable than brand loyalty.

Increase Marketing Effectiveness

The easiest way to make your marketing efforts more effective is to invest in the brand they stem from. When your brand is cohesive and well-articulated, your marketing initiatives will be too. Branding encompasses the essential “first steps” that define your core messaging, brand personality, and tenable marketplace position. As we just mentioned, the customer research involved in branding allows you to develop targeted marketing campaigns that are highly relevant to your most valuable customer segments. A bold new identity makes every marketing touchpoint more engaging, while the guidelines and templates that come out of branding will save you time and money on the content of all your future initiatives.

Close Deals More Easily

Ask any salesperson on the frontlines of commission warfare and they’ll tell you: Well-defined, strategically positioned brands are just easier to sell. That’s because their value propositions are built into their brand narrative. The argument for the distinct superiority of a well-positioned brand has already been clearly articulated. This takes a huge weight off of the shoulders of its sales team because a good portion of their work has already been done well before they engage with potential customers. Branding gives your sales force a unique advantage, better enabling them to close deals quickly and confidently.

Command Higher Prices

It’s true what they say: customers don’t buy products, they buy brands. And customers are willing to pay premium prices for brands they perceive as superior. A white t-shirt from Hanes will cost you about $5. A white t-shirt with an Armani tag will run you north of $150. Effective branding enables you to position your company as an industry leader with value propositions that none of your competitors can offer. This type of meaningful differentiation has tangible value built into it. It solidifies your worth and allows you to command higher prices for your goods or services.

Boost Business Value

Never underestimate the power of brand equity. In addition to justifying increased price points on your offerings, it can also have a positive effect on your share price. Stronger brands realize stronger financial performance. The long-term result of branding is that your company itself is worth more when you’re ready to exit. Not unlike the cost of home renovation, an investment in branding delivers valuable returns when the time comes to negotiate a selling price.

Branding pays dividends over the life of a company, enabling to attract better customers with lower marketing costs, all while commanding higher prices for your offerings. Smoother sales, increased customer loyalty, the multifaceted benefits of brand equity—the list of benefits goes on. At the end of the day, though, your brand is the way the world perceives your company. What could be a smarter investment than shaping that perception?