Brand recognition is essential for business success in today’s crowded marketplace. Effective branding sets companies apart, builds brand loyalty, and ultimately boosts revenue. In fact, brands with high name recognition can generate up to 30% more revenue than rival companies. However, achieving impactful branding is about much more than just surface-level name recognition or aesthetics.

Truly thoughtful brand building requires a multi-layered strategy that targets emotional connections and conveys a company’s purpose. When done right, branding influences audience perceptions and feelings towards an organization. It provides companies an identity that resonates with what they stand for.

Image showing document sed in brand formulation and design to denote branding. - Organisations Use Branding
Branding is one of the most simple but essential tools for a organisation to succeed. There are a range of reasons why organisations use branding that touch a number of areas. Image Credit: Unsplash: Ux Store.

In a communication, marketing and advertising context branding can only truly be effective if the organisation understands why they are branding. To assess why a brand is vital, organizations must ensure they consider this issue from not only their perspective but that of their consumer within relevant market segments. This should act as the strategic lynchpin for all of not only marketing functions but overall organisation activity. Effective branding isn’t merely logos and slogans, it is a representation of an overall strategic identity and central to any organisational plan or planning. Without a sophisticated understanding of customer emotions and needs, branding cannot be fully effective. 

Image showing a book on the relevant subject of brand identity - Organisations Use Branding
Organisations use branding to construct a brand identity and one that possesses human-like characteristics to connect with consumers. Image Credit: Unsplash: Patrik Michalicka.

1. Unique Brand Identity 

Organisations use branding to develop a unique brand identity. This focuses on constructing a brand that possesses human characteristics. This process is known as the creation of brand personality.

A brand’s personality should reflect what an organisation wants to project to the public. It is then important for organisations to use and develop this personality in their marketing functions. By influencing what customers link to their brand, organisations can encourage and reassure consumers about purchases.  At a basic level branding creates an individual identity for a product or service which in turn allows all marketing activities to flow from it.

Image showing document sed in brand formulation and design to denote branding.
Image showing an individual explaining a matter to another to denote the concept of explanation. - Organisations Use Branding
At a basic level effective branding effectively explains what an organisation or a product/service does. Image Credit: Unsplash: NeonBrand.
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2. Explanation  

Organisations use branding to explain a product or service not just sell it. Organisations introduce products or services to the consumer via branding, this is an elemental function. However, branding can be used in more sophisticated ways.

Image showing a individual explaining a point to another to denote the concept of simplification. - Organisations Use Branding
Building on this explanation, brands simplify products/services making them a more approachable proposition. Image Credit: Unsplash: Scott Graham.

3. Simplification  

Branding acts to simplify organisations’ product/service. It can also alleviate and manage perceived risk within the purchasing process to consumers. Even basic levels of knowledge about a product or service and brand awareness fundamentally alters the relationship a consumer has with their offering. This increases the likelihood of a successful outcome in the sales process.

A image of a pile of bank notes to denote the concept of value.
Fundamental to branding is the creation of value which in turn dictates the financial viability of an organisation. Image Credit: Unsplash: Annie Spratt.

4. Value 

Branding also helps establish a perception of quality and value of a product or service in a consumer’s mind. This is pivotal to achieving a premium price point within markets. Branding when effective can harness clean, clear and familiar aesthetics and language to streamline the customer experience. This psychological reassurance increases efficiency within the sales process. This is particularly relevant to generic products/services that aren’t intrinsically different from competitors. Moreover, relevant and effective branding that engages customers, evoking useful emotions can be harnessed to increase sales. This is central to higher-priced, lower-frequency purchases.

Image of two lanes of a running track to denote competition.
Consumers have many choices, effective branding engages consumers and helps them stand out from competitors. Image Credit: Unsplash: Tim Gouw.

5. Competition 

Establishing a strong brand can help block competitors from entering the market. Such brands can enjoy such success that their names become used interchangeably with the product they sell in the popular discourse. A key example of this power is Google 

Image showing a range of Apple products to denote concept of diversification.
The creation of a strong brand allows organisations to expand their product/service offerings more successfully than unknown entrant into a range of markets. Image Credit: Unsplash: Elnaz Asadi.

6. Diversification    

The creation of strong brands can also enable an organisation to diversify and expand their product offering more successfully than an unknown entrant into a market. Fundamental to a successful brand is the management of not only the impression that customers possess about a brand but the continuing relationship which customers have with the organisation.

Image showing a content customer transaction to denote customer loyalty. - Organisations Use Branding
Strong branding allows consumers to connect with products/services and a strong brand encourages sustained loyalty. Image Credit: Unsplash: Clay Banks.

7. Customer Loyalty  

By successfully managing consumer impression brands can gain trust and loyalty with customers which is valuable in any sector. This impression management that consolidates the development of brand personality can ultimately lead to sustained customer retention. 

Image of a team meeting formulating a plan to denote integrated communications.
Some form of an integrated communications strategy is at the core of any successful modern organisation. Image Credit: Unsplash: You X Ventures.

Build Brand Loyalty to Boost Sales

It’s been proven time and again that brands with strong name recognition and loyalty retain customers more effectively and generate larger transactions over time. In fact, highly recognizable brands boast a repeat purchase rate nearly 80% higher compared to generic or less distinguished competitors.

When customers perceive your brand positively and connect with what your company represents, a layer of trust and familiarity forms that makes them more likely to be repeat purchasers. Consider global footwear manufacturer Nike. Its iconic slogan “Just Do It”, emphasis on inspirational athlete stories, and focus on cutting edge product design have made it one of the most recognizable brands globally. This brand building has also allowed Nike to completely dominate market share for its industry. As an example, in 2022 Nike accounted for over 60% of all athletic footwear sales in the United States, far beyond rivals Adidas and New Balance (Source: Statista).

Now imagine the loss in revenue and customers if people did not instantly associate Nike with exceptional sports apparel and its aspirational branding disappeared. Successful branding builds immense value – allowing companies to increase transactions, command higher prices, and retain loyal customers in a competitive environment.

8. Integrated Communications Strategy 

Without a strong brand, organisations undermine the development of a successful integrated communications strategy. This in turn negatively affects the chance for organisations to reach their target market. As well as undermining the organisation’s overall strategic direction. This strategy is at the core of sustained effective communication for any organisation.

The use of branding and its power also extends to far less public-facing areas:

Branding helps organisations legally protect product/services and consequently their financial wellbeing. Image Credit: Unsplash: Mikhail Paystyuk.

9. Legality 

Legal protection and intellectual property rights can be gained for branding. This contributes to an organisation’s abilities to protect the power of their brand but to crucially protect their financial-wellbeing and/or overall market share. Branding also provides an opportunity to represent the values and corporate identity of an organisation. This is particularly relevant to ethical issues. Alongside issues concerning tariffs and international trade. A strong brand is key to navigating many issues and enjoying respect and good treatment potentially globally.

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“A recent 2023 poll of 1,000 consumers shows that when quality and price are equal, 85% will choose the brand they know and trust. (Source: Impact.com)

Companies with higher brand equity have been shown to enjoy a 20% larger market share on average compared to competitors in their industries, according to a 2022 Nielsen report (Source: NielsenIQ).

Per Forbes, the average ROI in 2023 for every $1 spent on brand building marketing is $5.78, an 8% increase from 2021 (Source: Forbes).

Research demonstrates that in 2023 employees still prioritize working for companies with positive brands and reputations. A majority (83%) of candidates say branded workplaces seem more appealing compared to peers according to a Glassdoor Economic study (Source: Glassdoor).”

FAQ:

Q: What are the key elements of a strong brand?

A: A strong brand encompasses several key elements, including a unique and memorable brand identity (logo, colors, typography), a consistent brand voice and messaging, and a clear value proposition that resonates with your target audience.

Q: How can I measure the success of my branding efforts?

A: Track key metrics like brand awareness (website traffic, social media mentions), customer loyalty (repeat purchases, positive reviews), and brand sentiment (customer feedback, online reputation). Don’t forget to consider brand-driven sales and market share as well.

Q: How long does it take to build a strong brand?

A: Building a strong brand takes time and consistent effort. While initial recognition may come quickly, true brand loyalty and differentiation evolve over time and require ongoing commitment to your brand identity and values.

Q: Can small businesses benefit from branding?

A: Absolutely! Branding is essential for businesses of all sizes. It helps you stand out in your local market, attract your ideal customers, and build trust with your community. Even a small business can have a powerful brand with dedicated effort and strategic implementation.

Q: Do I need a professional agency to develop my brand?

A: While agencies can offer valuable expertise, building a strong brand is also possible in-house. Research, planning, and a clear vision can help you develop a successful brand identity without external assistance. However, consider seeking professional help if you need specialized skills or want an accelerated brand development process.

Summary of Why Organisations Use Branding

Key Takeaways: Why Branding Matters to Organizations

After reading through the crucial benefits branding delivers for organizations seeking to connect with consumers, establish credibility, and drive revenue, a few key takeaways should stick out:

  • Effective branding sets companies apart from competitors, builds brand awareness quickly, and cements businesses as industry leaders that consumers can instantly recognize.
  • Investing in brand building leads to increased perceived value, which allows companies to command higher prices and boost profit margins over the long run.
  • Brands that resonate emotionally with consumers foster immense loyalty. This directly correlates with higher lifetime value, repeat purchases, and invaluable word-of-mouth promotion.
  • A brand consumers know and trust serves as a competitive buffer during economic downturns or disruptions to the business landscape. Customers will cut unknown brands first.
  • The goodwill and reputational benefits of thoughtful branding also aids immensely with top talent recruitment and retention.
  • Consistent, multi-channel branding creates synergies that maximize ROI across all promotional areas from advertising to tradeshow appearances.

Fundamentally, organisations need to understand the litany of reasons why they need to use branding to effectively utilise branding. Brand formulation should be informed by these nine reasons that fundamentally explain why organisations utilise the power of branding.

Learn more about digital value propositions here.

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