The 1st rule about brand is … don’t talk about brand. Your business’s most valuable asset and why you shouldn’t talk about it.
I’ve noticed that when I start talking about brand and how important it is in growing a business, most conversations move on quickly. But academic research is now overwhelmingly in support of the business benefits attached to building a strong brand and how that pays back into the bottom line at every level of the business.
A strong brand is a business’s most valuable asset
In its simplest form, it increases the likelihood of a customer choosing you over the competition, enabling you to attract more customers, more cheaply, who are happy to pay a slightly higher price, slightly more often.
At a time when business’s question the value of investing in brand in favour of short term sales activation, I have collated the evidence to support this line of thinking and here it is distilled into 12 tips on how to sell the business benefits of building a brand, without talking about brand, sliced and diced to convince the different audiences in your business.
To the CEO & CFO
1. Your business will be worth more.
Intangible assets are now responsible for up to 90% of all business value.
Of those intangible assets, the role brand plays varies depending on the sector and how the analysis is carried out, but on average, brand represents 20% of intangible asset value.
2. You can charge more.
Research shows that premium brands can command up to 13% more than their competitors in the same category and 6% more than the average. This is because your brand has created a value perception which reduces price sensitivity.
Increasing your share of voice (ad spend) can decrease people’s price sensitivity from 5% to 20% as people are willing to pay more for strong, familiar, visible brands.
3. It enables diversification into new categories.
A strong brand enables a business to bridge into a new category, allowing a new business to emerge, evolve and thrive. If the customer trusts you in one category, they will be more likely to transfer that trust and follow you into the new category. Examples includes Virgin (music => airline), Lambourghini (tractors => sports cars) Apple (circuit boards => iPhones & computers) etc.
4. Your business can attract better people, more easily.
We humans are wired to want what everyone else has. The more attractive your brand becomes, the more people want to be part of that success, which increases your potential talent pool.
5. Employees will stay for longer.
LinkedIn research highlighted that companies with a stronger employer brand have a 26% lower turnover rate.
6. Your employees will cost you less
Attracting better people means you will achieve better results, and if your employees stay longer, you get more bang for your buck.
To Sales and Operations
7. Generates upstream attractiveness.
Suppliers want to stock you, partners want to work with you, and deals become easier to generate.
8. Improves customer loyalty and repeat purchase.
Not the fuzzy badge-wearing variety of loyalty, but the simple sales impacting variety. The bigger your brand, more likely you will be bought by slightly more people, slightly more often, as customers recall you more easily.
Brand building drives stronger sales growth over a period of 6+ months than the temporary sales spikes experienced during sales activations.
9. Bigger brands have bigger market penetration and higher sales volumes.
It’s the law of double jeopardy. The bigger your brand, the higher your market penetration, the more sales you generate.
To your Marketing team
10. Generates superior effectiveness in marketing activity.
A Study of over 6000 Effie submissions analysing factors affecting campaign effectiveness showed that brand size and its market share made its subsequent advertising 18x more effective. Strong, well known brands don’t have to spend as much to be heard.
11. Sustainable differentiation.
A strong brand creates a sustainable point of difference between your business and the nearest competitor which decreases the threat that you will be overtaken by similar products arriving on the market.
12. Creates market orientation.
Slightly chicken and egg this one. Creating a strong brand requires market orientation which in turn sets you up for success as you evolve with and for the market as opposed to in your own bubble, giving you the competitive edge.