In a world full of instant news and constant interactions, branding is more important now than ever before. Next to ensuring your bottom line is secure, public image is arguably next in line. Without a reputable brand, people are less likely to purchase from you or use your services. For example, look at what happens when Chipotle has food contamination issues. Their stock price plummeted, and individuals looked elsewhere for their burrito needs.
Here are a few ways branding links to the financial health of your company.
Setting Expectations
First, you must set your audiences expectations of your product or service. As the phrase goes, over deliver and under promise, that way the audience is content at the very least. A proper way to set expectations is through an advertisement campaign.
Yes, advertisements will cost an organization money, but the goal is to have a positive ROI. For example, if you run a Facebook ad, you’ll want to average more than the CPK or Cost Per Click. In order to achieve this, you’ll need decent conversion.
If you continue with a reputable campaign, it not only builds your brand but builds a customer base, meaning more constant revenue.
Customer Retention
Next, branding of an organization will bring increased client retention if done correctly. Look at all the subscription boxes for example. They provide their customers with enough value to earn their trust and repeat business. Although one could argue people are less likely to unsubscribe once started but that’s for another discussion.
Put simply, if a brand is reputable and well know, they can spend less marketing dollars because word of mouth and organic reach will increase. However, if done incorrectly you could run into the issue of people leaving.
Brand Equity
Lastly, the simple fact of brand equity. While brand equity is a bit more complicated to quantify, you can find ways to build in the equity into financial models. This largely comes into play if a business is looking to sell. For example, if Coca-Cola decided to sell, they would have a large case for brand equity, as their brand is known globally with a simple glance.
Understanding a business or your businesses brand is important for financial success. As marketers put it, people do not buy your product, they buy your brand. From large companies such as Nike and Adidas, this is completely true. Without a solid branding template, a business is subject to unnecessary difficulties that can ultimately lead to the doors closing.
