7.14.2021

5 Reasons Why Branding is Important for Your Business

Written by Kit Jenkin

danielle macinnes IuLgi9PWETU unsplash

When we think about the most successful businesses in the world (companies like Apple, Microsoft, Volkswagen, BP, Johnson and Johnson, Amazon, and others) we don’t just think of their products and services. Oftentimes, we subconsciously think about their brands and what they represent, without even realizing it. This is why branding is so important for your business. 

Companies all over the world spend billions of dollars every year to promote and establish their brands, with global spending on advertising expected to exceed 630 billion US dollars by 2024 [1]. Whether it’s through traditional advertising, product design, communications, or customer service, a company’s brand can enter the public consciousness in any number of ways. And once it’s established itself, it’s difficult to dislodge. 

Here, we’ll explain why branding is important to your business. 

What is a brand?

Traditionally, a company’s brand was considered to be the sum total of its marketing, advertising, and design efforts. Anything that the public could see about the company was part of its brand. 

While that’s true, it’s not the whole story. A brand is more than the ads a company puts out or the products it designs. A brand, ultimately, is the expression of the relationship between the company and the customer. Or, put another way, a company’s brand includes how they make their customers feel, a feeling created by the sum of their interactions with the company’s branding over time. 

A company’s brand, though, shouldn’t be confused with its branding. Branding includes all the things people normally associate with a brand: its advertising, design, color schemes, etc. You might want to read our resources about hotel and restaurant branding after you’ve read this blog, for a more detailed breakdown on branding.

Let’s take an example of a company with one of the best-established brands in the world: Apple. While Apple has distinct advertising, marketing campaigns, and product design, its brand is something different altogether. Apple’s brand connects with people by informing everything they do with ideas of creativity, lateral thinking, liberation, and style [2].

1. It helps inform everything you do

A company’s brand is based on the company’s values. A company’s values are a set of values that determine what the company believes in, and, therefore, what it will or will not do. These values should inform every aspect of your business. 

Once a company establishes what its values are, it can incorporate them into its brand and branding. What you end up doing, based on your values, will determine your brand. Once you know what your brand would do, you’ll be able to make business decisions much more easily. 

Determining how your brand acts in certain situations, and where they stand on certain moral issues will make communicating, and overall behavior in general, much simpler. There’s a reason why PETA doesn’t collaborate with  Louis Vuitton, or why Jaguar Land Rover doesn’t put out radio ads for discounts at their local dealerships. It wouldn’t be on-brand for those companies. When you know what your company stands for, you can save a lot of time and effort undertaking research and development, marketing campaigns, and customer service strategies that won’t work for you. 

2. It improves the relationship between company and customer

When a company has a clearly defined brand, they’re better able to attract its ideal customers [3]. When a company knows what its values are and the type of people they’re trying to reach, building good relationships with those people becomes a lot easier. 

When you have branding that speaks to a customer’s values, the customer is more likely to interact with your company at a powerful, emotional level. This will establish a deeper level of connection between the customer and your product and service. Thus, increase brand loyalty and customer retention.

3.It increases your financial value

When you look at big stock exchanges around the world, you’ll see companies valued at billions, if not trillions, of dollars. If you dig down into the numbers, you’ll notice that these company’s hard assets are actually worth a lot less than their stock valuation. 

This is partly because of the value of the company’s brand. When a company is valued, it seeks to obtain a value over and beyond that of its tangible assets. This is referred to as ‘goodwill’ and was taken to mean the value of the loyalty of the company’s customers. There is therefore a strong connection between loyalty and branding.

It also increases product value. There’s also the “brand mark-up phenomenon”. It’s been well-documented that some people are willing to pay more for products from a certain brand than an identical product from another [4]. A running shoe that has Nike’s swoosh on the side is instantly more valuable than one that doesn’t have it.

Companies that have identifiable, positive brands that inspire loyal, dedicated followings will be worth much more than their hard assets will suggest. 

4. It motivates your employees

When you have a clearly identifiable brand, you’re more likely to attract people to work for your company who share your values. Employees that share a company’s values are more likely to work harder and longer for that company than those that don’t. When your employees believe in your company’s cause, they’ll be motivated to go the extra mile to promote your brand, sometimes even when they’re not working. 

This is where it’s vital to have consistent branding at your company. As we’ve said above, branding isn’t just about the ads you put out - it’s also about how your company acts in any given situation, from customer service interactions to the products they release. By implementing a consistent branding strategy that the company delivers through its many branding channels (advertising, customer service, marketing, logos, etc), your employees are more likely to believe that your company believes what it says and become more emotionally satisfied in their role. 

By creating buy-in for your company’s mission statement and values among your employees, you’ll get them to work harder and longer for you, and maybe even become brand ambassadors for your company’s products and services. 

5. It helps retain your customers

By the time you’ve grown your company to a respectable size, and your brand has become recognizable to your customers and the wider public, your marketing practices have become much more effective for generating sales leads. Effective branding operations help you increase customer satisfaction by keeping them engaged with your brand and marketing materials. You can thus control your customer’s experience and journey with your company, keeping them happy, intrigued and engaged so that they repeatedly come back to you for their needs. 

Loyal customers can become your company’s best advocates as they share their experiences with your company and your brand with their wider social circle. This is one of the most effective ways of generating new business for your company. 92% of customers believe and value recommendations from friends far more than traditional advertising [5]. The better an experience your customer has with your brand, the more likely they are to recommend you to the people they know. This is where referral schemes can become incredibly effective: when you create a platform that makes it easy for existing customers to sign up friends while giving them incentives to do so, that’s the golden ticket to more leads and sales. 

Take advantage of customer loyalty with your own loyalty scheme, run right from your POS

One of the best outcomes of great branding is customer loyalty. You want your brand to be the go-to for everything your customers need. And once they show their loyalty, you want to make sure it’s rewarded.

When you use an Epos Now POS system, you can use apps like Loyalty and LoyaltyDog to set up customer loyalty programs for your retail or hospitality business. With these apps, you can:

  • Encourage repeat shopping through attainable, worthwhile rewards.
  • Customise the value of each point and create a loyalty scheme that fits your business model. 
  • Analyse shopper data.
  • Expand your customer base.

Contact Epos Now today to find out more about our systems.

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