7 Reasons Why Branding Is Critical When It Comes To Marketing
What Is Branding?
Admittedly “Branding” is a relatively vague marketing and business concept.
The definition can also vary from person to person.
While there is a lot of technical-sounding jargon to describe branding, here it is in a nutshell:
‘Branding is a marketing effort to attach a single (or several) messages to a product or service’.
Still confused?
Ok, let’s break it down.
Before we can truly understand what branding is, we’ll first need to discuss the concept behind brands and products.
What is a ‘Brand’
First, it’s important to understand a brand is not always tied to a manufactured product (and/or service).
A commodity or resource can be packaged up to become a branded product.
For example, let’s look at a simple egg.
We can all make a sunny side up egg at home, right?
But, once that same egg is sold in a restaurant, it becomes a product and there is a certain message attached to it.
Now take that same egg and serve it from 3 different restaurants.
How can these restaurants get you to choose their egg, over the competition?
This is where creating a brand comes in.
According to the American Marketing Association, a brand is any symbol, design, term, concept, and name, among other features, that identifies a product or service different from those sold by others.
Simply put, a brand is the unique distinction of a product/service, a company, or a specific activity of a company that differentiates itself from its competitors.
McDonald’s yellow arches is part of their branding. The Big Mac is also an aspect of their brand—as opposed to Whooper burger.
The brand doesn’t always have to be physical.
An abstract tagline like Apple’s “Think Different”, is a brand.
Therefore, a brand is about creating a unique message so people can quickly identify it and associate it with a specific product, service, or company.
So, let’s go back to Branding.
After we’ve properly understood the idea of a brand, we can now understand branding as any effort to endow a product, service, or company with a BRAND.
It’s important to understand that branding is not solely about creating a brand, but will also include a strategy to build awareness (brand awareness) and to improve people’s perception about the brand.
For example, we can design a logo (let’s say, McDonald’s Big M). However, we can’t say it’s a branding attempt until we’ve introduced the logo to our audience and built awareness of the logo.
Why Branding Is Important In Marketing?
Now that we’ve properly understood the philosophy of branding, we can discuss why you need branding as your core marketing activity.
Branding is especially important because it can change how people perceive your company, product, and/or service, which can translate to more conversions and ultimately, more revenue.
Here are 7 critical reasons why branding is important in marketing:
1. Branding Clearly Communicates Your Value
It’s important to understand that people don’t really buy your product or service.
Rather, they purchase the benefit they get from the product.
So, communicating these benefits—or values— is a very important aspect in business promotions
We do this by communicating our products’ unique value proposition (UVP) through branding.
For example, (going back to our previous point) when 10 restaurants are selling a sunny side up egg, the restaurant that can successfully communicate the uniqueness of their egg will get the advantage.
It doesn’t have to be the most delicious, but if they can clearly articulate its benefits in a unique way than the competition, they will win.
Probably the most powerful example of using branding to communicate UVP is Apple’s iPhone.
Apple consistently and successfully communicates the uniqueness of the iPhone from Steve Jobs’ keynote back in 2007 to the recent “Why There’s Nothing Quite Like iPhone” campaign.
2. Branding Generates Long-Term Value
You can encourage people to purchase any product or service with an interesting enough offer.
For instance, if you sell a product that is 50% cheaper than its competitors in a limited-time offer, you’ll get a lot of buyers.
However, can you get a repeat purchase once the discount is no longer there? Most probably not.
Acquiring new customers might bring (illusional) growth, but it’s customer retention that’s going to bring you profit.
Studies have suggested that increasing customer retention (and brand loyalty) by just 5% can increase profitability by 95%,
Proper implementation of branding is one of, if not THE most effective way in building brand loyalty, which in turn will maximize customer retention.
A huge aspect of branding is maximizing customer experience and retention, not fancy logos and taglines.
3. Branding Improves Trust and Credibility
Trust is a crucial element in business success.
A study conducted by the Boston Consulting Group in 2013 discovered that customers identified authenticity as one of the top qualities that would attract them to a brand.
In this day and age, information about your brand, true or false, is available to everyone online.
A negative review on social media or other platforms can significantly hurt your brands’ reputation, even if it’s coming from a fake account.
People only purchase things from brands they can trust.
Managing a brands reputation will help build that trust and authenticity.
4. Branding Is The Foundation For All Other Marketing Efforts
Branding is, on one hand, a component of the whole marketing strategy, but on the other hand, an important foundation for other marketing activities.
No amount of marketing can help a product or service when the brand perception is severely negative. On the other hand, when the brand perception is positive with brand loyalty in excellent shape, just a little amount of marketing investments can significantly boost revenue.
This is especially true in advertising efforts. Proper branding can significantly enhance an advertising campaign’s performance with added recognition. Let’s think about this for a moment: we are more likely to get attracted by advertisements from famous brands.
Consistent branding activities will help your marketing performances in the long run.
5. Branding Emotionally Connects With Your Audience
Branding enabled companies to create an emotional connection with their audience, creating a distinction between this company and its competitors. This emotional connection is what creates brand loyalty over time.
Each of us might have our own favorite team in sports, favorite celebrities, or favorite musicians? Why are we loyal to them? Most likely it’s because of an experience in the past, or consistent experiences over time that causes emotional connection.
Again, Apple might be a perfect example here. Apple, over the years, has consistently pushed emotional branding as its core strategy. Apple recognizes that most of us want to be a part of something bigger than us and successfully capitalize on this fact. Apple customers are very loyal to the brand because they felt that they have an emotional connection with Apple and its core values.
6. Improves Your Team’s Pride, Morale, and Satisfaction
Above, we have discussed the critical benefits of branding concerning our customers. However, branding also has an important benefit in creating a reputable, well-respected workplace people want to work in.
Branding brings pride for your employees and team, so you can maintain the team’s morale that will increase their productivity and impact. When they are satisfied with your brand performance, it will indirectly create a happier work environment. This will also give you an easier time to attract better talents.
Strong branding simply will bring in a strong team(s).
On the other hand, in this age of transparency, your branding is only as strong as your company culture. In recent years, we’ve seen major companies got boycotted by their customers because of internal scandals, and we’ve also seen how companies can get significant boosts in sales because of their company culture.
7. Branding Creates Customer Advocacy
The ultimate goal of any marketing strategy is to convert (loyal) customers into advocates,
A brand advocate is—in a nutshell—, a customer who actively, and without any direct compensation from the company, shares about the company or their product/service to people they know. It can be via word of mouth, social media, or even content (i.e., when they review your product on their YouTube channel without any endorsements from you).
Brand advocates will recommend your product and/or service to their peers and family, essentially turning into a free marketing campaign for your brand.
Remember that nowadays, social proofs are an important factor in driving purchase decisions, and these advocates can be your major source of positive reviews, positive mentions on social media, and important sources of referrals.
Consistent, effective branding is very important as a long-term, sustainable source of brand advocates. Only when a customer has developed an emotional connection and has become a loyalist, can they turn into active advocates.
Conclusion
Branding today is arguably more challenging with all the saturation and transparency of the digital marketing age. However, it also means branding is even more important than ever.
Proper implementation of branding will ensure a good foundation for all the other marketing tactics, confirms your credibility as a brand and helps in maintaining your team’s morale and satisfaction. Arguably, branding is the most important aspect of your marketing strategy.