The ROI of Branding

While the concept of branding has drastically evolved overtime, many people still define branding by its aesthetics component: visual identity.

What this definition fails to tell is that branding, as a concept, is more complex and it’s defined by more than looks. Branding is an ever evolving process of thinking, developing, and overseeing everything tangible and intangible that a brand ultimately becomes in its consumers and employees’ minds. But why is branding so important and what do you get from investing in it?

Branding is imperative to a business because of the overall impact it has on a company. It influences how people perceive a brand, it can drive new business, and it increases brand value.

Influencing people’s minds

Reputation builds overtime with the perception of trust. The more your brand is trusted, the stronger its reputation is. Branding studies and develops the right way to earn and maintain that trust. Through a solid brand strategy, a company can position itself in the market with a positive, attainable and realistic brand promise that will build trust in people’s minds. This is highly significant for a business when consumers are going from intent to action in the buying process.

A strongly branded company not only attracts loyal consumers, but also employees who will stand behind the brand. Employees are the first direct advocates of a brand, so working for a brand that is reputable and highly regarded will help them have good association with the brand and bolster that perception down the line to the clients and partners.

Branding generates new customers

Just as the lack of branding can hurt your business and drive customers away, a good branding will have no trouble helping a business to obtain referrals. A robust branding more often than not means the consumer’s impression of the brand is a positive one and they are likely to do business with this brand because of the awareness and assumed dependability of using a name they can trust. Once a brand has been well-established, word of mouth will be the company’s best and most effective advertising technique. By creating and managing a good perception of your brand, you will guarantee potential customers will come to you with an already positive association in their mind, which in return will help you influence the buying process and obtain more businesses over competitors.

Branding increases business value

When you invest in branding and work on the branding process, the result ultimately will be, well, a strong brand. This will increase your business value by awareness, recognition and trust. All these components create traction and give your business an edge in the market. Why? Branding allows you to influence your business’ perception and in turn, upkeep a reputation.

A brand that has been developed and sustained through a solid brand strategy will become an asset in itself and hold monetary value in your company. Take Amazon for example, according to Statista, “In 2020, Amazon’s global brand value stood at 415.9 billion U.S. dollars. A healthy user experience, supported by customer service, and communication might be the possible reason why Amazon is a part of the top five companies worldwide, ranked according to their brand value.” Read that again, 415.9 billion U.S. dollars. That’s Amazon’s brand value, which is different from how much profit they generate as a company. So awareness, recognition and trust pay off, don’t you think?

At the end of the day, branding is no subject for a day. Businesses must consider the importance of branding to generate more revenue and most importantly, have a say of the type of business they want to be perceived as in their consumers and employees’ minds. Branding is a perpetual process, an ever-evolving subject that encompasses multiple areas of expertise. From business management and psychology to marketing and advertising to name a few. These are not interchangeable subjects, so the more you understand how branding works for you and your business, the easier it will be to leverage each area to make your branding stronger and build a brand you can be proud of.