Although the term “branding” sounds fancy, its origins go back to the distant past. In 2700 BC, the ancient Egyptians began branding cattle with a hot iron so that herds of different owners would not get mixed up.
The idea of branding has drastically changed from ancient times, but the concept of recognizability and differentiation has remained the same.
When we think about today’s world titans, such as Nike, Coca Cola or Apple, it is apparent they realize the importance of branding. The first thing that comes to mind is their recognizable logos and color schemes.
However, whether you aim for global branding or have lower expectations, you must remember that branding is more than just visual appearance. It’s the entire brand's personality and identity.
This article explains the importance of branding and all the benefits it provides. Let’s start with the basics.
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What Is Branding?
Cambridge Dictionary defines branding as “the act of making a product, organization, person or place easy to recognize as different from others by connecting it with a particular name, design, symbol, set of qualities, etc.”
This definition suggests branding implies only visual elements: a mark or logo, color palette, typography, imagery and graphics, forgetting its abstract aspect.
But we have one more definition that recognizes the branding concept goes behind visuals. Kotler and Keller, international marketing professors, define branding as “endowing products and services with the power of a brand.”
Branding is about developing companies' personality; it shapes customers' perception of a brand, distinguishes it from the competition and creates the entire customer experience (CX).
Under the concept of branding, we can distinguish many different types:
- Corporate branding is the process of building a recognizable image and reputation for the entire corporation.
- Personal branding focuses on the individual, whether an influencer, politician or other.
- Product branding is the kind of branding that persuades buyers to select one product over another based solely on the brand. A specific product becomes a synonym for the entire group.
- Service branding refers to the value your service provides to the customers.
- Ingredient branding highlights one specific ingredient that becomes a synonym for the entire product.
- Geographical branding emphasizes the distinctiveness of a particular region as the advertising point and the reason you should go there.
- Online branding improves your company's positioning on the web.
- Offline branding relates to a company's offline positioning.
Now, let’s see what is the importance of branding in business.
The Importance of Branding in Business
Social media and the internet generally have changed how businesses function; today, customers have more options than ever. A significant number of new brands that appear daily is excellent for customers, but it makes a real struggle for businesses that need to stand out from the growing competition.
That is where branding comes into the scene.
Here are some interesting statistics that prove the importance of branding:
- 81% of consumers say they need to develop a sense of trust toward the brand before making their first purchase.
- 77% of customers prefer to purchase from brands they follow on social media.
- 65% claim that a company's CEO impacts their purchase decisions.
Branding increases a brand’s exposure and recognizability, attracts new customers who prioritize your brand over your competitors, boosts credibility, motivates your employees and enhances their work satisfaction.
These are the eight most prominent reasons for the significance of business branding:
1. Raises Your Company’s Value
The result of the branding process is creating a strong, recognizable brand with a good reputation that increases your company's value and makes it influential in your industry. Due to your established position in the market, branding motivates buyers to spend money on your product, as well as investors to fund your future projects.
2. Increases Brand Recognizability
One of the main reasons for branding is increasing brand recognizability since people tend to notice and purchase more well-known brands. Let’s take, for example, Apple, whose iPhone has almost 50% of the US smartphone owners.
To achieve recognizability, branding must be consistent. A company will be considerably more memorable if its visual components, like logo and colors, are appealing and distinctive.
Even if a consumer only briefly notices the brand and isn't ready to make a purchase, they will memorize it if it creates a positive first impression. Next time, when they’re prepared to make a move, they’ll remember your brand.
3. Attracts New Customers
Solid branding goes a long way and attracts many interested parties, evoking the assumption of reliability and credibility. New consumers will approach a brand with a positive reputation with minimum suspicion and try your products and services.
Once the brand is well-established and known, customer satisfaction will be your best recommendation. Positive impressions will, through word-of-mouth marketing, attract new customers, who will, driven by positive associations, choose your brand over competitors.
4. Builds a Relationship of Trust
One of the most valuable assets a company can have is its target audience's trust. However, gaining trust is a long-lasting process that professional branding can facilitate.
Trust is the foundation of CX and brands that earn customers' trust generate more recommendations, new leads and revenue. 7 out of 10 customers will spend more money purchasing from brands they trust and stop buying from those they don't.
A company that lacks essential branding components will find it more challenging to win over customers. On the other hand, solid and professionally-looking branding will demonstrate established, credible business customers can rely on.
Credibility boosts loyalty — your customers will return to your brand.
5. Facilitates the Launch of New Products
Launching a new brand on the market is challenging, but once the customers are familiar with it, it will be much simpler to introduce new products.
You’ve already gained your targeted audience's trust and they know they can rely on your product because your brand is a synonym for quality. Ensure new products you’re launching are equally or more qualified than the existing ones so your reputation stays intact.
6. Levels Up Your Advertising Efforts
Branding and advertising are closely related — advertising increases brand recognition, awareness and public reputation, while branding facilitates advertising, determines its form and style and makes your advertisements more efficient.
Advertisement attracts new customers, promotes your brand and boosts your business growth. Working on your business’s branding can help advertising reach its full potential because it will fully represent your brand’s personality and values.
7. Provides a Competitive Advantage
Regardless of your business's niche, you want to avoid getting swept up in a competition where everyone looks the same and does the same thing.
In order to be noticed, your business should stand out and be unique. An appropriate branding strategy can single out your business, making it distinct and captivating.
If you want to establish a powerful brand that distinguishes from the competition, consult the best branding firms that will research your market, help you design an instantly identifiable logo and choose a color scheme that differs from your rivals.
Color choice determines your brand’s recognition and impacts how consumers see it. Using a signature color scheme can boost brand identification by 80%.
8. Enhances Employee Satisfaction
Branding is just as important for your customers as it is to your employees.
Satisfied employees perform their work better and more efficiently because they will feel involved in more than just work. Working for a renowned brand, recognized and appreciated by the public, will increase employees' pride, fulfillment and satisfaction.
It is important to remember that employees are 24/7 ambassadors of your brand — if they are satisfied with the overall experience with the brand, they will transfer their satisfaction to the customers and vice versa.
How To Successfully Conduct Business Branding
Knowing the importance of branding, you might wonder how to implement it. Since there are numerous varieties of branding types, there is no one-size-fits-all technique. However, the following steps are generally accepted:
Define the Target Audience
Before starting the branding process, you need to identify your brand's target audience — the ideal consumers according to whom you will tailor your branding strategy.
Your ideal customers can be budget or luxury shoppers if you work on the B2C model, small businesses or large enterprises (B2B) or you can differentiate them according to demographics (age, gender, education, geolocation, etc.).
Define the Ideal Brand Perception
Once you define your target audience, consider the best way to present your brand.
For example, if your target audience is luxury shoppers, your branding should be perceived as exclusive, expensive, lush or “just for the chosen ones.”
Start Building Brand Image
With all the necessary information about the target audience and how you want them to perceive your brand, you can organize the working process around the desired brand's identity. Your branding should faithfully reflect your business and its promises.
The Importance of Branding: Final Thoughts
On average, consumers create an opinion about your business in roughly 50 milliseconds and your brand's personality makes the most out of the first impression. Considering that 46% of customers would spend more money on brands they trust, you can conclude how vital branding is for business success.
Make a wise choice regarding your company's branding; base it on a viable concept that you can commit to over the long term and continuously deliver to your customers.
