Why Branding Matters

1. Memorability

A brand serves as a convenient container for a reputation and goodwill. It's hard for customers to go back to “that whatsitsname store” or to refer business to “the plumber from the Yellow Pages.”

In addition to an effective company name, it helps when people have material reminders reinforcing the identity of companies they will want to do repeat business with: refrigerator magnets, tote bags, datebooks, coasters, key rings, first aid kits, etc.

Memorability can come from using and sticking with an unusual color combination (FedEx's purple and orange), distinctive behavior, or even a recognizable personal style. Develop your own identifiers and connect them strongly with your company name in the minds of your audience.

2. Loyalty

When people have a positive experience with a memorable brand, they are more likely to buy that product or service again than competing brands.

People who strongly bond with a brand identity are not only more likely to repurchase, but also to buy related products of the same brand, recommend the brand to others and resist competitors’ price cuts.

Consider the loyalty of Saturn car owners who travel long distances to attend celebrations at the company’s plant in Spring Hill, Tennessee. Or the iconic loyalty surrounding the motorcycle brand Harley-Davidson.

3. Familiarity

Branding also influences non-customers. Psychologists have shown that familiarity often leads to liking.

People who may never have done business with you but have repeatedly encountered your brand identity may still recommend you to others.

Seeing your advertisements, using promotional items like pens, or reading about your business in local news can build recognition and encourage word-of-mouth recommendations.

4. Premium Image, Premium Price

Branding can elevate what you sell beyond a commodity. Instead of dealing with price shoppers, you attract buyers who are willing to pay more for your goods or services because they trust the brand.

Think of how some consumers prefer a fashionable bottled water brand rather than drinking the same water from an unbranded source.

5. Extensions

With a well-established brand, you can expand more easily into related products or services.

For example, a winery with a good reputation may successfully launch winery tours or other related offerings because customers already trust the brand.

6. Greater Company Equity

Building a strong brand increases the overall value of your company.

A famous example is Coca-Cola. A company executive once stated that even if all facilities disappeared, the brand name and formula alone could secure financial backing.

7. Lower Marketing Expenses

While branding requires investment initially, once the brand is established it reduces future marketing costs.

A well-known slogan, logo or jingle can instantly remind people of your company without needing lengthy explanations every time you advertise.

8. Less Risk for Consumers

Consumers often choose familiar brands because they feel safer making decisions with well-known companies.

As the saying goes: “You’ll never be fired for buying IBM.” By building a strong brand identity, you increase customer confidence and strengthen your business success.