benefits of investing in your brand

Without always being able to get a solid and immediate ROI measurement on brand-building initiatives, many companies often relinquish the importance of investing in their brands. It’s sometimes seen merely as an expense with no true correlation to the success of the company.

However, as we’ve discussed many times over, there are four key things a strong brand can to for your bottom line:

• Maintain customer loyalty
• Increase lead conversion
• Resist commoditization
• Command premium pricing

Maintain customer loyalty – reinforces your customers’ commitment to you, reassures them of their expectations in your products and services, and prevents them from buying elsewhere simply based on price. Also, makes selling additional products and services to them much easier.

Increase lead conversion – a strong brand that is known and trusted gives people confidence in becoming customers, and alleviates the need to “prove” yourself.

Resist commoditization – because of your unique brand promise and/or “value-add” to your products and services, they are “worth more” than just face value. Decisions to buy your products or services are base on more than just price.

Command premium pricing – people know “you get what you pay for” with strong brands. In other words, if customers trust your brand they will spend more for your products and services.

Pat LaPointe reiterates, defines and breaks down these four points further in a recent article entitled “Ten Specific Ways Brand Investments Pay Back”.

One of the most frequent questions I get about measuring marketing is: “How do we measure the impact of our investments in brand development on the bottom line?”

If you’re really looking for an answer, here goes. There are ten basic ways a stronger brand creates financial value:

1. It can attract more customers, either directly or through stronger word of mouth (WOM).
2. It can encourage customers to spend more with you, making them more receptive to other solutions you can offer, or just more likely to give you the first shot at meeting their needs.
3. It can influence the mix of products/services customers buy from you, since buyers normally hold strong brands in some degree of esteem, and respect the “advice” of the brand.
4. It can reduce customers’ price sensitivity, allowing you to earn more margin from every dollar they spend with you.
5. It can help you keep customers active longer, or at the very least, act as a “safety net” to give you time or opportunity to fix problems that arise along the way.
6. It can help you accelerate the customer’s buying process, reducing the probability that something happens to close the wallet before the spending happens.
7. It can help you attract and retain better talent at lower recruiting and retention costs, since people want to be associated with attractive brands.
8. It can reduce operating expenses by influencing supplier concessions from companies who want to be associated with top-tier brand partners.
9. It can attract more/better channel partners.
10. And if that’s not enough for your CFO, tell him or her how stronger brands can actually help lower your organization’s cost-of-capital borrowing costs, due to the lower risks of lending to a company with strong brands (all other things being equal). It’s not unlike how studies have consistently shown that taller people make more money than equally qualified people of average or lower height.

Most of the time, the business case for branding investments can be made in some combination of these ten elements. Of course, you’ll need some data (or at least some well-structured assumptions) to make the case credibly. But it can be done with even just a little data.

You’ll also need some idea of just when you expect to see these effects begin to occur, and what the early indicators of progress might be (e.g. shift in perceptions, website engagement, etc.). Setting up your marketing metrics to monitor these milestones becomes more crucial to the cause as your timeframe for payback gets longer.

Spending is still tough these days, but investing in yourself, your products and your services can mean the difference between bickering over price and getting a ROI back tenfold.

Brand initiatives can take many forms – strategy and messaging, visual communication, social networking, etc. – or a combination of any or all. Contact us today to help assess your brand’s strengths and weaknesses to develop a strategy that will make the most of a worthy investment.

Visit Acceler8 Creative’s website.

Phone 847-909-4569

Email Acceler8 Creative.

Advertisement