In my last post I talked about what a brand is and the origin of branding in business. Now I’d like to address the questions often asked by clients once they understand what branding really is. “Is there an ROI? Can’t I just leave well enough alone?”
Sure you can, but there are financial benefits to branding. Three are worth discussion: differentiation from the competition, increasing value and fostering loyalty.
Differentiation from the competition
We all understand the benefit of being different enough to stand out from the crowd. If your potential customer can’t see that you are different from the other options they have available and are in some way better, then you are a commodity. Their decision to purchase you becomes totally arbitrary, and the basis of your business plan is little more than luck.
So, when it comes to differentiation, many marketers focus exclusively on their property — tangible assets and service standards — which makes sense. Is it more sophisticated? Is it cheaper? Is it historic? Is it newer? Is it chic and trendy? There are many ways in which you might characterize your property and claim uniqueness among your competitors.
However, beware of being only self-centric in this effort. If your competitive advantage is all about you, you will always be vulnerable to being leap-frogged — someone can always claim to be more sophisticated, cheaper, more historic, newer, chicer, the next trendy hot spot. Instead, consider this. Embrace a brand idea that is consumer-centric — how what you do relates to what your consumer values. Now what you’re offering is more likely to resonate and motivate them to purchase from you — not those nasty competitors. Because they’ll see that you understand them, and even though they’ll know you’re talking to many other people, it will feel like you’re talking to them and them alone.
A second reason to articulate a brand is all about money — elevating consumers’ perception of what you’re worth. Paying premium prices for anything is frequently more about one’s perception of the brand’s value than physical characteristics or levels of service. Yes, your physical tangible offerings are part of the value equation, but if the underlying essence of your brand — its reason to exist — is based on an idea that is highly valued by your customer, then what you’re offering will be highly valued as well.
Look at polo shirts. There are manufacturers galore. The price of a polo varies dramatically. If you study the quality of the fabric, the tailoring and the craftsmanship there are many products that are indistinguishable from one another. But the prices range dramatically. Today the value proposition for premium-priced products is heavily influenced by consumer’s perceptions of brands. It’s not complicated. If they love what a brand stands for, they’ll pay more.
The best way to get a loyal customer is to think about their loyalty before — not after — their first purchase. If a business transaction is based on the simple idea “I’ll give you something if you give me money,” the chances of gaining a loyal customer are dependent on the characteristics of what they receive and your delivery. But if all aspects of the transaction are built on a brand idea that is inspired by insights you have gained about the target you’re communicating with, then every step of their purchase process — awareness, interest, action, purchase, repurchase — will feel in some way connected to who they are. Their encounter with your branded product becomes highly personal and is more likely to be an experience they want to repeat again and again.
So, there isn’t one good reason why you should be attentive to branding, there are at least three.
I hope you will engage with me on this fascinating topic. Send me your questions, comments and success stories as we learn to be more brandwise together.