Have you ever considered why people are willing to pay so much more for a MacBook than other laptops? Why Tiffany diamonds cost thousands whereas other diamonds command a significantly smaller price tag?
The reason is branding.
A company’s brand image can have huge implications on how their products are perceived, how much they can charge for their products and services, and how open customers are to changes in price or product.
Marketers today typically refer to brand equity rather than brand image, where a positive brand equity refers to the premium that companies can charge for their products based on the shopper’s perceived value of the product.
There is a long list of benefits for building a stronger brand that provide retailers:
Better margins – Like the examples with Apple and Tiffany, retailers with positive brand equity can charge more for their products than weaker brands. For many consumers, brand names are a symbol of status or prestige, so shoppers are willing to give up more money in order to have that status symbol. But this isn’t limited to status symbols. Brands with a strong perception of quality, eco-friendliness, and so on can also command higher margins.
Less price-elastic customers – Brand equity doesn’t just impact how much people are willing to pay for products, it also influences how open they are to changes in that price.
A great example of this Coca Cola. There are a ton of substitutes for Coke out there, both soft drinks and otherwise, many of which are just a fraction of the price. But people keep buying those red and white cans. While this price elasticity does have its limit, there are probably at least a few Coca Cola enthusiasts out there that would even pay $10 per can.
Greater customer loyalty – Much of a person’s price elasticity for a certain product has to do with their loyalty to that brand. Shoppers tend to be significantly more loyal to strong brand with a lot of equity.
Not only are customers more loyal to your existing products, they are also more open to trying any new products or services. Take Apple for example. It doesn’t matter how bad the reviews for the iPhone 8 are, people will still camp outside Apple stores trying to be one of the first to have the new smartphone. That’s largely because they have such strong brand equity.
Marketing efficiency – Having a strong brand can actually help you increase marketing efficiency. That’s because you have defined style, a defined brand personality, and a defined position. Once you know all of these things, it’s a lot easier for marketers to create or reuse on-brand content, meaning there is less wasted effort.
Tips for Creating a Stronger Brand
There are many advantages to creating strong brand. But how can you actually go about making it stronger? Here are some tips.
Define your position
Nobody can be everything for everyone, so the first step to creating a really strong brand is to define your positioning in the market. What is the thing that you do better than anyone else? What does your company stand for? Answering these types of questions will help you define the brand’s position.
Tell the story
The next step is to tell consumers your story. As Simon Sinek said, “people don’t buy what you do, they buy why you do it.” So, craft a compelling story that focuses on the ‘why’, and use that throughout your brand messaging. Creating a story that is both compelling and authentic isn’t easy, but doing it well can be a powerful tool for your brand.
It’s all about the experience
As you may have gathered, brands aren’t tangible. They’re a perception. They’re a collection of thoughts and emotions surround a particular product or company. Keep that in mind when your design the customer experience. The images and words you use on the website, the in-store ambiance, the quality of your products, the demeanor of your sales reps, the quality of your customer support – all of these contribute to the perception that ultimately becomes your brand.
Think beyond the sale
Your brand doesn’t live and die with a sale. Every touchpoint, interaction, or engagement is an opportunity to build your brand.
For instance, help shoppers early on in their purchase decision by providing them with valuable information and guides. In this case you aren’t trying to sell them on anything right now, but are trying to establish a relationship and positive perceptions about your company. Indeed, this will help you win that particular customer down the road but more importantly it helps add to your brand equity.
On the flip side, make sure you’re providing outstanding customer support. Mistakes happen, but being able to find fast and effective solutions while providing friendly support means you can actually turn these mistakes into brand building opportunities.
Look at Red Bull as an example of this. They have thought way beyond the sale, finding creative (and sometimes crazy) ways to connect with niches of their audience on a more personal and emotional level through athletics, sponsorships, and advertisements. From sending Felix Baumgartner to freefall from the edge of space, to creating a new sport where athletes race down ice-covered obstacles courses on skates, Red Bull uses much more than simply a beverage to build their brand.
Go build your brand
Just having a product doesn’t mean you’re building a stronger brand. As rapper T-Pain put it, “Just because you went and got your logo printed on some t-shirts, that does NOT mean you have a clothing company. U got shirts.”
And the same is true for branding. Just because you sell something doesn’t mean you have a brand. It takes a lot of commitment and effort to create a surplus of brand equity, but the benefits are well worth it.