The Importance of Branding

Importance of Branding

Branding is “the act of giving a company a particular design or symbol in order to advertise its products and services.” At least that’s the definition in the  Cambridge Dictionary. In a not-so-distant past, this was an accurate description of branding – at least that’s what the majority agreed upon at the time. Branding was (and still is) misunderstood by being cut down to its aesthetic component: visual identity. For many, branding is still about the visual (name, logo, design, packaging, etc.). Furthermore, many marketers still follow the old-school version of branding even though the concept and understanding of marketing have evolved a lot over the years. Branding is of the utmost importance because not only is it what makes an indelible impression, but it also provides customers with an idea of what to expect from your company.

Branding separates your brand from the rest of the crowd and makes it painfully clear that you’re the superior choice. Your brand defines who you are as a business, and how you wish for the public to perceive you. There are numerous avenues through which you can develop your brand. A few of which include advertising, customer service, social responsibility, reputation, and visuals. These elements and others work together to form one unique and attention-grabbing profile.

What is Branding?

Importance of Branding Word Art

If it were easy to define the concept of branding, there wouldn’t be so much debate and dissonance surrounding the practice. For the most part, a strong understanding of branding requires a firm grasp of business, marketing, and the basics of human relations. Branding is a seemingly endless concept that a correct definition that covers everything it stands for would fail to bring any real clarity to the subject. However, for the sake of decreasing the spread of obsolete, inaccurate, and incomplete information about branding, here is my definition: branding is the ongoing practice of identifying, developing, and managing the elements and actions that shape how stakeholders perceive the brand.

If you compare my definition to the official Cambridge definition, it is quite clear that the latter offers more high-level information, which gives a false sense of understanding to the reader. This is likely one of the reasons why many think that the Cambridge definition is correct and choose it as the core of their knowledge base on the subject. In reality, basing your understanding of branding on a high-level definition that reduces it to one element (visual identity) makes every other concept fall short when you try to connect the dots.

My definition of branding, even if it seems more ambiguous than the other, gives more sense to the concept when you dive deeper into its meaning. Here is a rough breakdown of why.

Perpetual Process

Importance of Branding Process

Branding is a perpetual process because it never stops. People, markets, and businesses constantly change and the brand must evolve in order to keep up.

Identify, Create, and Manage

There is a defined process for branding. You must first identify what you want to be to your stakeholders. Next, you need to develop a brand strategy to position yourself accordingly. Lastly, it is vital that you constantly manage everything that alters your positioning.

Assets and Actions

You must translate your position into assets (visual identity, content, products, ads, etc.) and actions (e.g. services, customer support, human relations, experiences) that extend into your stakeholders’ minds.

Perception of a Brand

This is more commonly known as reputation. This is the connection that individuals (customers or not) have in their minds regarding your brand. This perception is the product of the branding process (or lack thereof).

Stakeholders

Importance of Branding Shareholders

Your clients are not the only ones that build a perception of your brand. Stakeholders include possible clients, existing customers, employees, shareholders, and business partners. Each one develops their own perception and engages with the brand accordingly.

The Importance of Branding

Branding is nothing less than critical to a business due to the overall impact it makes. Branding can change how people perceive your organization. It can also create new business and increase the perceived value of your product or service. However, it can also have the opposite effect if not executed correctly.

Your reputation builds whether you do something about it or not. The resulting product can be either a good or bad reputation. Understanding and applying your brand only means that you take control and try to influence your reputation. This is why it is wise to consider branding from the very start of your business.

Contrary to what many believe, branding is not a pricey marketing tactic that only big companies use. Branding actually has a lot to do with common sense. Your market and the degree to which you want to engage with it heavily influence your branding efforts. Branding involves a mix of different competencies and activities. This is why branding can differ vastly from case to case. Knowledgeable consultants and flawless execution will put a dent in your budget, but this is one expense that is worth every penny. Furthermore, branding an international, multi-product business is far more challenging and resource-heavy than branding a local mom-and-pop shop. Remember, there is no one-size-fits-all method to branding.

Branding Increases the Value of Your Business

Importance of Branding Business Value

Branding is important when trying to fill your pipeline and generate future business. A developed brand can improve a business’s value by providing the business with more leverage in the industry. This makes it a more appealing investment opportunity due to its established foothold in the marketplace.

The result of the branding process is the brand, which combines the company’s reputation and the associated value. A strong reputation means a strong brand, which translates into value. The value can mean influence, price premium, or mindshare. The brand is an asset that also holds momentary value and must have a place of its own on the balance sheet since it increases the overall worth of the company. While this is a controversial topic and a challenging task, assigning financial weight to a brand is as important as branding itself. This process is called brand valuation.

Branding Generates New Customers

A developed brand will have little difficulty generating referral business. Strong branding typically means there is a positive perception of the company among consumers. This, in turn, means that customers are likely to do business with you because of familiarity and assumed dependability of using a name they trust. Once a brand is well-established, word of mouth will become the company’s best and most powerful advertising method.

Similar to the reputation of a person, the reputation of a brand precedes it. Once a perception of the brand has been established, a wild chain of propagation ignites. Word of mouth will pass the perception on and further reinforce (or tarnish) the reputation of the brand. If it is a positive reputation, prospective customers may come into contact with the brand, having a pre-existing positive association in their minds. This makes them more likely to purchase from this brand instead of the competition.

Branding Improves Employee Pride and Satisfaction

Importance Branding Employee Satisfaction

When an individual works for a well-branded company and truly stands behind the brand, they will be more satisfied with their job and have a higher degree of pride in what they do. Working for a brand that is respected and held in high regard publically makes working for the company more enjoyable and fulfilling.

As we’ve already mentioned, the stakeholders are not just clients, but also employees. We must be aware that human interaction is the soul of commerce. It is also critical that we realize that employees are the first line of communication for any brand. Think of employees as brand ambassadors. Employees who have a positive association with the brand will convey that perception to the world. This can also translate into stronger leadership, more involvement, and better products.

Branding Creates Trust within the Marketplace

A brand’s reputation ultimately amounts to the amount of trust that clients can have in it. The more you trust a brand, the better your perception of it, the stronger its reputation and, the brand itself.

Branding seeks the right way to earn and maintain a level of trust between the firm and the stakeholders. This is accomplished by forming a feasible and reasonable promise. This promise needs to position the brand in a way within the market and then deliver on said promise. In short, if the promise is delivered, trust builds in the minds of the stakeholders. In saturated markets, trust is essential because it can be the difference between intent and action.

Branding in Practice

The topic of branding is not a brief discussion. Branding is a constantly evolving subject and spans multiple areas of expertise: business management, marketing, advertising, design, psychology, and others. Branding also has multiple layers. Each layer has its own meaning and structure. It is not the same as marketing, but there is a lot of common ground between the two. This is why we cannot acknowledge or deny that branding and marketing are subordinate to each other in some way. They are interdependent and their primary goals are to serve the business.

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