Building a strong brand is important to revenues for several reasons.
First, a strong brand can differentiate a company's products or services from those of its competitors, helping it to stand out in a crowded market. This differentiation can lead to increased sales, as customers are more likely to choose a product or service that they perceive to be of higher quality, more reliable, or more trustworthy.
Second, a strong brand can increase customer loyalty and repeat business. When customers have a positive experience with a brand, they are more likely to return to that brand for future purchases. This can lead to increased revenue over time, as the lifetime value of a loyal customer is higher than that of a one-time purchaser.
Third, a strong brand can allow a company to charge premium prices for its products or services. Customers are often willing to pay more for a brand that they perceive to be of higher quality or status. This can lead to increased revenue and profit margins for the company.
Finally, a strong brand can create a positive image in the market and help to attract new customers. This can lead to increased revenue through new customer acquisition and expansion into new markets.
Overall, building a strong brand is important to revenues because it can help a company to differentiate itself, increase customer loyalty and repeat business, charge premium prices, and attract new customers.
When analyzing a company's performance or current state, I am naturally curious about the strength of their brand. I like to ask questions such as "How do customers perceive your brand?" and "What problems or advantages does your product or service offer?" One of my favorite questions is, "How would you introduce your company if meeting someone for the first time?" Of course, brand perception is not the only perspective, but understanding a company's brand health can signal potential opportunities or issues that may exist.
What is Brand Development?
Simply put, brand is the sum of all the characteristics that define a business, including its values, mission, products or services, reputation, and yes, its logo. Building a strong brand helps businesses stand out in a crowded market, create emotional connections with customers, build loyalty and trust, and increase the perceived value of their offerings.
A well-defined brand can also help businesses differentiate themselves from competitors, communicate their unique selling proposition, and establish a consistent image and messaging across all marketing channels. Additionally, a strong brand can attract top talent, create a sense of purpose and identity among employees, and foster a culture of innovation and excellence.
To summarize, a strong brand perception...
- Should resonate with employees, existing/prospective customers, influencers and investors;
- Can engage and retain customers, create credibility and drive revenue;
- Leverages current areas of strength to create a space that your company can own; and
- Provides the opportunity to raise marketplace expectations that something different can be experienced with your company.
Essentially, a strong brand perception is one of a company’s most valuable assets since a brand is one of the few sustainable, non-replicable forms of competitive advantage. As stated previously, a strong brand becomes more valuable when repeated across multiple customer touchpoints as part of an integrated or omnichannel marketing strategy. And finally, the strongest brands link the external brand to internal brand behaviors.
Conversely, if a strong brand perception is missing, customers and employees will form perceptions about your company or product or service whether you want them to or not. As such, a company should be intentional about building the perception that have the greatest benefit for the customer and your business.
As such, a strong brand supported by a consistent experience helps differentiate from the competition and build a foundation for growth. A brand can be strengthened by exposure and experience.
And don’t get me started as to how necessary it is to be intentional as to your brand perception in the world of social media where a company can receive either positive and negative reaction to a company’s brand every single day of the week!
When to Rebrand
So, say your company brand is strong based on direct feedback from customers and influencers. And yet, a company might consider updating its branding following some specific instances:
- Rebranding: If a company is going through a major restructuring or changing its focus, it may need to rebrand to reflect its new direction. Example, Dunkin’ Donuts changed its brand to Dunkin’ to modernize the brand but also to reflect an expanded product line that includes more than just donuts. This transition was made easier due to the tagline that was used ‘America Runs on Dunkin’” so customers were familiar with the naming.
- Mergers and Acquisitions: When two companies merge or one acquires another, they may need to update their branding to reflect the new entity. Example, when United and Continental Airlines merged, the company name was retained as United Airlines with the use of Continental’s logo and colors.
- Outdated branding: If a company's branding is outdated, it may need to update it to remain relevant to its target audience. Example, Tupperware is best known for its durable household products (which were originally sold through house parties in the 1970s) modernized its brand positioning with updated imagery and the tagline ‘Confidence Becomes You.’
- Negative image: If a company has a negative image due to a scandal or other issues, rebranding can help them rebuild their reputation. Example, Burberry who is now considered a luxury brand but at one time in its history, the company lowered its prices to appeal to a wider audience. Unfortunately, the iconic tartan color scheme became associated with gang wear in London.
- International expansion: If a company is expanding to new international markets, it may need to update its branding to reflect cultural differences and/or to signal an expansion. Example, Airbnb was originally launched as a service to help travelers with tight budgets to find cheaper lodging. As the Airbnb company expanded to be a global hospitality provider with more expensive, luxury homes available, the brand was less positioned for its booking technology and more positioned for the places that an Airbnb customer might visit.
Ultimately, updating a company's branding should be done strategically and purposefully to ensure it remains relevant and resonates with its target audience. And to state the obvious, a company should update its branding when it no longer reflects its values, mission, and vision or when it no longer resonates with its target audience.
Why Brand Is Important
Overall, a strong brand is essential for businesses to establish a lasting presence in their industry, build a loyal customer base, and achieve long-term success. And if you continue to be skeptical, a recent study from the Corporate Executive Board (CEB) shows that customers with a strong emotional connection to a B2B brand are 13x more likely to purchase from that provider and 30x more likely to pay a premium. Dare I say that the emotional connection to B2C brands may be considered more dramatic.
The ongoing intentional work that is necessary to define, create and maintain a compelling brand narrative that unifies the organization, resonates with customers and the market, and helps to differentiate the company internally and externally across all touchpoints is essential. Overall, a strong brand is essential for businesses to establish a lasting presence in their industry, build a loyal customer base, and achieve long-term success.