The average business owner has a to-do list as long as their arm. They want to market their products, boost their PR, manage their team, and generally ensure that they're making profit. This means that all too often, branding gets shoved to the bottom of the list — because, hey, it's not that important, right?
Except it is. And not only is it important for identity and recognisability, but getting it right can result in a healthy return on investment. That's right — ROI — most business owners' favourite three letters. Want to know how? Read on…
Good branding = positive ROI
Typically, it can be seen as difficult to measure the financial impact that investment in your brand has. It might not be something that can be plotted neatly on a graph — but there are countless examples of businesses investing in their brand and reaping the rewards. Take Coca-Cola, for example. Heard of them?
The worth of the Coca-Cola company is believed to be about 50% in assets — which includes plants, stocks, cash, IP, and investments — and 50% in the brand itself. It's tempting to suggest that a mega brand has the luxury to be able to commit that much money to its branding, but it's an approach they've taken since their origins. In 1889, Coca-Cola spent around $11,000 ($300,000 today) just on marketing and by 1910, the advertising budget had grown to $1 million.
The results speak for themselves, and Coca-Cola continue to invest in their branding and advertising to the tune of half a billion dollars today, always showing an unwavering commitment to their values of happiness, togetherness, and nostalgia. You only need to be in a bar and hear the immortal words "Is Pepsi alright?" to know that the brand has near-monopolised the market — but how about an example from a less famous name?
The Design Business Association runs a yearly competition called the Design Effectiveness Awards. Prizes are dished out on the basis that brands "have the measured proof that design made a clear and significant contribution to the results achieved by the work." — showing that branding decisions can be measured against performance.
The 2023 Gold winner was whiskey maker Gordon & MacPhail, who reported a 25% increase in sales following a redesign of its bottles, labels, and packaging — as well as a strategy rethink when it came to product ranges. Gordon & MacPhail's case prices "have increased by 109% on average", with revenue "increasing 71% from selling 18% less whisky". As the famous quote goes: numbers don't lie.
Come all ye faithful
But good branding is not just about marketing stats. There's a softer side to ROI which can't necessarily be measured. Your brand is like a garden that needs to be frequently tended to — by constantly and diligently working on your brand, you build faith among your loyal customer base, and recognisability for those who are not yet converted.
Trust and security — the sense of 'knowing what you're going to get' that can only be built when a brand is consistent with its output — are strong emotions for humans. Think of the way fans are blindly faithful to their sports teams. You may turn up week after week to watch the same drab performance, with the same disheartening result, and you keep going back no matter what because you feel the brand (yes, modern sports teams are brands, too) speaks to you on some level.
This works because the majority of fans are hooked from an early age. Their team feeds their desire for fun, community, and escapism, building a bulletproof attachment that is impenetrable in spite of the fact that a more 'successful' option may be available.
This analogy works for customers at the early stage of their buying journey. They become aware of your brand because something about it resonates with them — whether that be the values, tone of voice, or the way it communicates its offering. They may not be ready to actually buy anything at that stage, but your brand has already made a connection. Consistently staying true to your identity and principles means that your brand continues to resonate with potential customers, until the 'potential' develops into an actual sale.
Providing the quality of the product/service is up-to-scratch, the customer now has a positive association with your brand. But the work isn't finished there. Repeat business is achieved through brands constantly engaging with customers, showing they share values and desires, and keeping themselves top of mind when so many other brands are jostling for attention.
Studies show that customers are 46% more likely to buy from brands they trust — and even pay more in some cases. The more faith and recognisability you build, the more likely customers will be to part with their hard-earned cash.
The halo effect
Taking care of your branding doesn't just impact your customers — it's also important for both your employees and potential investors.
Having a well-rounded brand, with clear values and a strong identity, helps to ensure that the ones responsible for maintaining it — e.g. your marketeers, sales teams, PR department — become your brand ambassadors. It creates a sense of belonging; a feeling that you're all working towards a common goal. This has an effect on motivation and performance as it increases the likelihood of your employees investing in their work, producing higher quality marketing, and ultimately generating more sales.
Equally, if you're looking for outside investment, then it stands to reason that anyone wanting to take a punt will be looking to put their money into a brand that appears to be consistent in its output, engaged with its customers, and clear in its strategy.
A positive ROI is crucial for any business wanting to achieve success in a crowded market. Giving frequent and thoughtful attention to your brand is a sure-fire way to put your best foot forward in making that possible. In fact, good branding may well be one of the smartest investments you'll ever make.
