It goes without saying that establishing and maintaining a preference for your brand is key to your long-term success. But just how important is the power of your brand?
According to a study by the Marketing Accountability Standards Board (MASB), a company’s brand contributes on average 19.5% to its value, and in many cases well over 50%.
Let that sink in for a minute. Then consider how much you’re leaving on the table if your brand is underperforming.
The good news, on the other hand, is that if you cultivate a strong brand, it can benefit your business in several ways, including:
• Reduced price sensitivity. Said simply, consumers are willing to pay a little more for products and services from a brand they like and trust.
• Increased transaction share. As your market’s preference for your brand grows, the percentage of overall sales coming your way increases.
• Revenue growth. Not surprisingly, the combination of the two factors above can lead to a significant increase in revenue.
• Increased customer retention and lifetime value. People who prefer a particular brand tend to stay with that brand. As long as you continue to prove that your company and offerings are worthy of their loyalty, they’re likely to keep making purchases from you.
• Higher win rate. If you’re in an industry where you have to respond to RFPs and compete with other providers for business, a preference for your brand gives you an edge.
3 Symptoms of an Underperforming Brand
It can be difficult to determine if your brand is underperforming, of course. It’s a bit of a “can’t see the forest for the trees” situation. You’re too close to your brand to objectively assess it.
But if you take a step back, there are three symptoms of poor performance that you may be able to identify:
- Lack of consistency. While even a well-defined brand has to have some flexibility in how it’s expressed, if you use noticeably different language—written, spoken, or visual—randomly across different mediums, platforms, etc., you create confusion in your audience. That’s problematic, since confusion causes a lack of trust that can be very damaging. If a consumer thinks, even for a split second, “Is this the same company I saw an ad for the other day?” it can hurt your brand.
- Lack of clarity. What do you do for your customers? What benefits do your offerings provide to them? If they have to ask these questions to themselves after interacting with your brand, that’s not a good sign. Diluted messaging translates into a poor audience response and, over time, a weakening of your brand.
- Lack of purpose. Both your audience and your employees want to know that you stand for something. That might be making consumers’ lives easier/better/more fun, promoting positive social change, protecting the environment, or any number of other worthwhile objectives. And the importance to your employees of having a purpose shouldn’t be underestimated. You’ve got to be able to attract and retain the best talent available if you want to have the best brand in your market
Being Intentional About Building Your Brand
Some companies like to believe that letting their brand develop “organically” is the best approach. That may be the easiest approach, but it certainly isn’t the most effective.
Plus, while they’re simply letting their brand “evolve,” competitors that are being intentional and methodical about building their brands are continually gaining market share. Then, when boosting a lackluster “organic” brand becomes a code-red emergency for the company that sees itself falling behind, it may be too late to win back customers who’ve developed preferences for other providers.
Creating and maintaining a strong, high-performing brand takes time, effort, and commitment. But with the potential for a double-digit increase in company value, the payoff is well worth the investment.