The word "brand" has a colorful origin story. It comes from an ancient Norse word that has to do with burning... which makes sense, because we all know that Vikings liked to burn things. Then the word's focus changed from the act of burning to the result; for example, a "brand mark" on cattle. Then the meaning morphed into a physical mark or impression in general, burnt or not, such as a trademark on a product.
And now we have the corporate version of "brand," which according to BrandingMag.com can be defined as follows:
"A marketing practice in which a company creates a name, symbol or design that is easily identifiable as belonging to the company... Branding is important because not only is it what makes a memorable impression on consumers but it allows your customers and clients to know what to expect from your company."
Within that definition lies the key to understanding the value of a brand. Years ago, marketing focused on two basic factors: quality and price. Even though those are still relevant factors, nowadays there is a third, equally important consideration that companies must focus on: experience. In today’s congested business landscape, offering a product or service with competitive features isn’t enough to stand out and to most consumers competing products look almost identical. The difference lies in the experience you provide. In fact, the article in BrandingMag.com goes on to say that "branding is absolutely critical to a business because of the overall impact it makes on your company."
Valuing a Brand
"Ok," you may say, "all of that sounds pretty impressive. But is branding really worth the investment of time and resources? How much revenue will it actually generate?" Those are fair questions: as a businessperson, you want to know what effect branding could have on your company's bottom line.
Admittedly, an accurate valuation of a brand can be an elusive goal. For example Coca-Cola, one of the world's most successful and recognizable brands, has been valued at $73.1billion, $56.4 billion, and $34.2 billion, depending on the evaluating company. Why such a disparity between the lowest and highest figures?
Simply because of this fact: it is a difficult thing to objectively measure the impact the brand plays in the purchase decisions of ordinary customers. For instance, if we continue to look at Coca-Cola, we could reasonably ask: To what extent does Coca-Cola's brand name influence customers to buy Coke ahead of Pepsi, or a generic soft drink brand? Or, instead of the brand name, to what extent does the availability of Coke products lead to purchases? What about prices; how heavily do they factor into the decision?
Because of questions like these, some may wonder: "If there's such difficulty in accurately valuing a brand, does that mean that branding should be considered a less important aspect of marketing strategy?"
Actually, nothing could be further from the truth! For instance, many B2C organizations have implemented loyalty programs as one aspect of their branding initiatives. A study from Experian conducted a few years ago found that "75% [of] US companies with loyalty programs generate a return on investment." Expressed in sales, the average lifetime value of a customer in a loyalty program came out to $1,803.
Furthermore, consistent presentation of a brand has been found to increase revenue by 23%. Obviously, clear and effective branding should be an important consideration in a company's business strategy. Every business action and decision that you make is a reflection of your brand. How have other businesses successfully accomplished this?
Examples of Successful Branding
There are many examples of successful branding that we could delve into, but perhaps just a few will suffice:
- Tesla: When someone mentions a Toyota Prius, or some other electric vehicle, odds are that your first thought is not: "That is such a sexy car; I wish I could drive one of those all day long!" However, when Tesla first decided to enter the electric car sector, its marketers decided to steer the focus away from economic considerations, and focus heavily on the luxury that the brand offered. Targeting the more affluent segment of the consumer base led to a very strong performance for the California-based company.
- Zappos: Online retailers can make shopping a very difficult experience, especially if there is an issue with your purchase. The e-commerce site, Zappos, focuses their brand on providing the best customer experience. Their company culture reflects their passion for customer service and people recognize the brand for their willingness to please their consumers. Zappos’ free shipping, no-questions-asked return policy, and the trust they have in their consumers is the reason the company has maintained such a high level of repeat buyers.
- Progressive: Whenever your hear Flo’s name you automatically draw up images of Progressive Insurance. The company brought their brand to life by creating a funny and memorable character that reflects who they are as a business. Flo connects consumers to their brand on a more personal level and encourages Progressive to remain top of mind.
- Lyft: Uber pioneered the "freelance ride-hailing service," and had strong domination over the market for several years. Then Lyft came along as a strong challenger. Whereas Uber's brand message tended to focus on exclusivity and luxury, Lyft took the opposite tack. Lyft decorated their cars with pink, fuzzy mustaches, and encouraged customers to chat with their drivers as they sat up front. Because of their strategy of differentiation, Lyft has continued to enjoy impressive year over year revenue growth.
This last example also illustrates the importance of being adaptable in your branding strategy. Uber has been slammed again and again for the corporate, "uncaring" impression it's left on many of its customers. Due to such negative press, Uber has recently "re-branded" once again, and is slowly working to regain any lost ground with the consumer base.
Leveraging Your Brand
All of the above just goes to show: your brand is the most valuable asset you own. A unique and visible brand helps you stand out from the competition and remain top of mind. There really is no substitute that can offer the same benefits.
Maybe as you read over this information, you thought of some ways your company could enhance its image, connect with customers, and leverage its brand to grab a bigger share of the market. You have all these ideas, but how will you actually grow your brand? TwinEngine is here to help. We have designed a new eBook series called GROW2019 to help make 2019 the year to grow your brand and grow your business. We want you to become more of who your brand already is and inspire you to become the success you were destined to be. A "brand" has come a long way since the days of plundering Vikings, and we want to help your brand go even further.