A Beginner’s Guide to Branding
Contributed by Adé Akins
Being someone with a First Class Marketing degree and several years in the marketing world, it’s easy to forget that not everyone knows why branding is important. In fact, not everyone even knows what a brand is! In this post, I will address both of these points and hopefully up-skill you with some simple-to-follow adzvice that changes how you perceive branding and the role it plays in your business.
What is a brand?
Simply put, a brand is a name, design, symbol or other distinguishable characteristics that set a business or other entity apart from rivals. I like to look at brands as unique signatures that represent a business’ identity. It serves as a visual representation of what it is you do and what you’re all about.
Now, if you only take one thing from this post, it may just be this next point. A logo is not your business. I repeat for those in the virtual back, a logo is NOT your business. Rather, a logo makes up an important part of your brand and is a visual cue for your brand.
Why is branding so important?
I could ramble on for ages but in the interest of time, I’ll stick to just three reasons.
Valuable brands increase the value of your business
A strong brand can help build a strong business and this strength creates real value. The monetary value of a brand (brand value), is an asset that can be found next to other financial assets on a balance sheet. There’s a reason why so many high-profile corporate takeovers have such large price tags involved.
The best brands have an edge over rivals in the same space because they are often seen as more trusted, higher quality and therefore less risky than lesser known brands. This helps brands achieve a bigger or more valuable slice of the pie than others which results in higher revenue.
Ability to charge a premium
The brand value and competitive advantage mentioned above translate nicely into an ability to charge consumers more when compared to a similar or even functionally superior product. Higher prices = higher margins = more money!
Understanding brand equity to gauge the strength of your brand
The perception customers and potential customers have of your brand can literally make or break you. With that being said, it probably makes sense to explain what brand equity is huh?
The strength of a brand derived from its linked assets and liabilities when compared to a competitor/generic equivalent is referred to as brand equity. It’s driven directly from customer perception and can be positive or indeed negative.
I’ll use the example of the same brand, Primark in this case, to show how it can have positive and negative equity, depending on the business scenario.
If you wanted to buy a cheap item of clothing you only intend on wearing once, Primark’s positive brand equity would attract shoppers who could have gone to a competitor or lesser-known equivalent.
On the other hand, if you were looking to buy a baby seat for your newborn, Primark’s negative brand equity as far as cheaply made products would probably put a number of shoppers off.
Components of brand equity
There are several factors that feed into brand equity that brand and business owners need to consider on an ongoing basis. As I did previously, I’ll limit this to three fundamental components: experience, reputation and associations.
The experience customers have when dealing directly or indirectly with your brand lasts much longer than the product or service itself. People will forget what you did but they’ll never forget how you made them feel. By creating a fantastic experience at each customer touchpoint you will safeguard your brand. Even when there’s a perceived service failure, brands can save and even improve equity with how they respond.
Word of mouth travels fast and we’re increasingly dependent on reviews from independent websites, blogs and of course our friends before choosing to consume products and services from a business. To create and keep positive brand equity, it’s important to maintain a good reputation.
What do customers think of when they think of your brand? What feelings do they begin to feel when they see your logo? The associations that come along with your brand have a direct impact on customer perception of the brand.
For instance, if your brand is meant to be a luxury brand, the places it is sold, consumed or experienced needs to live up to that. You wouldn’t expect Gucci to be in Matalan would you? Or a better question, what would you begin to think of the Gucci brand if you saw it in Matalan?
Understanding that branding is an integral part of your business and not an afterthought is necessary for any successful business. There’s no point having an amazing business model if your branding is shoddy and customers have a dreadful perception of your brand. Of course, a strong brand alone cannot save a terrible business model.
I will break down how businesses can establish, maintain and grow great brands in future posts. Be sure to subscribe and follow adzvice across our socials to stay up to date.
P.S. In my spare time, I consult entrepreneurs and small business owners on all things to do with branding. If you’d like a consultation, use the contact page and we can discuss a service that meets your needs.