At the most basic level, a brand is a promise. Over time, customers or businesses buying your product or making use of your services will build a picture of what they expect from your brand. The experience of interacting with your business will leave a lasting memory which, depending on the nature of that memory, will keep those customers coming back. Here are five of the benefits of a strong brand identity.
By far the biggest benefit of having a strong and consistent brand is the sense of loyalty it brings to customers. People are attracted to brands that they share values with, and over the long run, they form an emotional connection with the brands they interact with.
The net effect of this loyalty is that some businesses continue growing without having to do much marketing at all. In effect, the love for their brand is what propels their future sales, and this is a powerful and indeed cost-saving effect. Secondly, it ensures stables business revenues, saving your business from constant market swings and making a profitable business a more predictable scenario.
Casting a wide net
A strong brand with universal appeal can propel your business to new heights, and failure to identify this could put a cork in your growth projections. For example, your storefront brand may be appreciated by the local population but you should question whether its appeal translates beyond international waters.
A great way to approach this is to implement a digital marketing strategy to build your brand’s online presence. Of course, no-one knows your brand quite like you do, but if you are unable to commit the time nor workforce, then a good option will be to use a content marketing agency to put together a strategy that makes the most of what your brand has to offer.
Easily introduce new products
It is increasingly common for the most respected brands to flex their branding muscle and enter new markets. These markets would have some connection with the existing products or services the brand underwrites, but a very strong brand identify is a powerful tool – companies have stretched strong brands across what would seem to be almost unrelated marketplaces with great success.
If a large number of customers have a very strong sense of respect for your brand, you will be able to utilise this respect to push new products or services successfully, because the core associations your brand carries will automatically apply to your new offering – even if the customer has never experienced your version of a particular product.
Higher profit margins
Businesses that have strong brands find that their customers are willing to pay a premium in exchange for what they perceive to be reliable and consistent quality and service. If your customers have a strong positive association with your business, they will think twice before opting for a cheaper and less established product.
This sticky effect is one of the underpinnings of more profitable businesses. Because of their brand equity, these businesses can add a layer of profit to their revenue, which is simply not available to a new business, or to a business that has not taken equally good care to build a solid brand. Even if the actual product is identical to others, the trust embodied by a strong brand makes a higher price sustainable.
The powerful effect of a brand leads not only to higher profits but also to a very strong overall competitive advantage. It is much more difficult for a new company to enter into a market when there are already very strong brands in place.
Your brand will also act as a defence against many of the competitive tactics often used: a competitor with a weaker brand would have to massively undercut you in price to counter the value of your brand, which in turn means that your business would not need to lower its prices all that much to be back in competitive territory.
Branding underlines profitability
It is far cheaper to maintain the custom of an existing consumer compared to the costs of acquiring a new one, so maintaining a strong and positive brand identity is highly beneficial to the bottom line of your business. It is also very effective as a measure to ward off competitors, while leaving everyone from employees to shareholders with the sense that they are involved in a business that is widely valued.