Branding 101: Understanding the Basics of Branding – Part 2

Branding. Brand identity. Brand equity. These terms get thrown around a lot in today’s marketing sphere, but what do they really mean? What really is a brand? And why should your business care about branding? If you run a business that depends on loyal, repeat customers, this article will give you a clear understanding of the basics of branding and how it is an integral part of having a successful organization.

What is a Brand?

Your brand is the voice, image, and personality of your organization. It’s the first impression you give and it’s the reason consumers choose your business over your competitor’s. Everything you present, including your messaging, your mission statement, your marketing materials, your packaging, and your website, should reveal the unique story behind your business, and the deep, authentic essence of who your organization is and what it is about. A brand isn’t just the name of your business, or your logo, or even your product or service offering. Great brands are a living, breathing force that has been created, nurtured, and developed into an entity that has influence over shoppers. Strong brands are powerful.

The art of branding is the endeavor of communicating the very kernel that is the core of your company in a way that generates distinct emotions of trust, excitement, or satisfaction, depending on what aligns with your company’s goals. And, it’s the soul of your marketing strategy. It’s what sets you apart from your competition in the marketplace, what adds meaty value to your product or service offering, and ultimately, what connects you with your customers.

The different types of branding

There are two different kinds of branding approaches: Factual (e.g. the product comes in a yellow box) and Emotional (e.g. the product makes me happy).

Factual branding predominantly uses facts to feature the product or service. Emotional branding focuses on emotions to generate a connection to a product or service.

You might think that consumers would most likely favor a brand when they understand objective information about it, such as product quality or price. But evidence from psychology suggests that feelings may have a greater impact on which brands are chosen.

Successful brands recognize the importance of associating their branding with emotions. Delivering a touching moment or poignant framework in marketing campaigns makes advertisements more engaging, and more influential. Therefore, brands should strive to capture stories that reflect the feelings you want to emit from consumers to produce strong brand-customer relationships. If your brand wants to compete for emotional engagement, you need to tap into shoppers’ need for love, power, security, or self-worth. Solely indicating the facts, statistics, or features of your product or service usually isn’t enough to convince consumers to buy.

Your brand is a strategic and financial asset

How much is your brand worth? Brand equity and brand value are both significant terms you should understand. While brand equity denotes the prominence of your brand within your customer’s mind, brand value is the financial weight your brand holds.

Determining your brand’s value is rather straightforward, however, the process for measuring brand equity is not quite as easy. To calculate brand value, you forecast future earnings resulting from the brand and compute the current net value. 

Evaluating your brand’s equity cannot just be done by calculating numbers. You must analyze the reputation of your business, its customer loyalty, and the overall brand strength as well. This will ensure that your brand is an entity that you can sell, even if you no longer have any product or services left to purchase, because the inherent equity is in its name. If your brand is something people believe in, buy into, and see value in, it will increase the equity in your business, thereby increasing your value.

In general, a brand is something you can sell, even if you no longer have any product or service to sell.

Your brand reflects the promises your business makes

Your brand promise expresses a concept that defines your entire organization and touches every aspect of your company. It’s not a slogan or tagline. A brand promise is a natural extension of what your business is all about—it’s purpose. And what you promise should be evident in your entire business strategy: it’s in your mission, your vision, and your values. Not only will consumers be emotionally charged by your brand promise, but your employees should embrace it as well, while feeling like they are a part of something that has meaning.

This is how customers get to know the real core of your business, and it’s how they’ll learn whether they can truly trust your company. When your company sticks to its promises, loyal and contented customers and employees will follow, ready to support and promote your company. If you break your promise, you will destroy the trust you’ve created with consumers. This can cause negative reviews, your business’ reputation to decline, and a loss in profits.

Ideally, you want to create a brand that people hold in high regard, they feel good about, and they want to associate themselves with.

Why Create a Brand?

There are two main reasons why you should build your company’s brand: To form memorable and long-lasting relationships with your customers, and to construct your business offerings in order to occupy a distinctive place in the mind of your target audience.

Let’s break it down. Firstly, people are more inclined to purchase from companies they are familiar with. If your branding is coherent, consistent, and recognizable, you will help consumers feel more comfortable when they are buying your products or services.

Secondly, with all the noise in today’s marketplace, it is crucial that your company stands out from the hordes. Not only are there multiple platforms occupied, but your organization must now compete in the global arena. How do you get noticed among all the masses of comparable businesses around the world?

When you do these two things well, you will be a successful brand.

The Benefits of Branding

There are a multitude of benefits of creating a strong brand. Primarily, powerful brands generate customer loyalty. Consumers are drawn to brands that they feel a connection with. When you develop a robust brand, these emotional relationships often last a lifetime. This makes it easier and less costly to introduce and market new products because your loyal customers will be interested in them right away, and even anticipate them being launched.

Branding also enhances your credibility in the marketplace as a whole. People associate higher quality to branded products, and they’re even willing to pay more for a brand they know, and trust compared to an identical generic product. Remember, great brands make and keep their promises, and this results in a competitive edge, higher market share, and lower cost of sales.

As you build your credibility, you also build recognition, loyalty, and competitiveness. Everything goes hand-in-hand, and you’ll find that your credibility has a direct connection to customers ease of purchase. We want to buy from companies we like, know, and trust. If your brand is credible, you’re far more likely to get the sale.

There are further hidden benefits to branding that don’t have anything to do with marketing on the surface. Studies show that companies with great brands have lower employee turnover, and they recruit the most talented and passionate employees. Branding sways your employees’ motivation to refer your business offerings and it also affects their feelings of pride in your organization. Great brands also produce a sense of status and esteem in the minds of industry leaders, community leaders, the media, and financial markets like Wall Street.

When Is Branding Not Beneficial?

Although it is rare, there are a few instances when it is not beneficial to focus on branding. If your business is launching products or services in a completely new market where there are only a few customers, or a market segment that needs to develop from scratch, the competition may be very low.

In this case, it might be better to invest in growing consumer awareness and interest in the category, instead of pouring a lot of time and effort into branding your business.

Another occurrence may be when you are competing in a highly fragmented industry with hundreds or even thousands of small companies similar to yours. Your branding may not even be seen enough to be able to reach enough customers. Your efforts should be in investing in marketing strategy in this situation.

And what if you only have a handful of customers, or even just a big one, like the government? Your best option is to cater to them as much as possible since they are your bread and butter. This means a clear emphasis on customer service to keep them happy and loyalty programs that reward your patrons for staying with you.

The Bottom Line

In conclusion, following these actions and constructing your brand takes clear thought and devoted attention. But the outcomes are spectacular. When branding is done right, it will allow you to be proud to share and market your business, which communicates confidence and trust with your customers. You will have a brand with grit and texture, a brand that earns mindshare, and a brand that matters.

Read the next post to learn the five steps to developing a robust brand.

Business Consulting Services: If you’re a small business owner looking to start or improve an online business then let me show you how to benefit from my experience. I have helped several online resellers grow their businesses by developing an online strategy to sell on Amazon, eBay or any other marketplace. Call me at 310-574-2541 or email me at Pez@Pezlogic.com for a complimentary business review.