Why Do Companies Value Brands?
In the last in the series ‘a good brand is good for business’ I’m going to look at 5 reasons why companies value brands so highly.
1. External benefits
Customers can recognise the products a brand represents and are often willing to pay more for them. The brand provides a means of expressing what makes it relevant to customers and different from the competition. It’s also the conduit for engaging its customers through media – whether that’s a post on Instagram, an ad on TV, or promotion on the pack, all will use the messaging, colours, logo, and imagery that communicate the brand. The brand ensures all this different activity is consistently presented which means that the investment made in sales and marketing materials is used as efficiently as possible.
2. Internal direction
A strong brand provides a focus for the team, it represents a distillation of its features and benefits into a clear hierarchy, it will ensure that messaging to customers can be easily and quickly developed based on those features and benefits, it ensures that every part of the organization knows the direction it is headed. This means, for example, that new products will enhance and extend the brand, the organisation’s culture will reflect the brand values, and that the sales team will have the resources needed to hit their targets. All this reduces the chance of costly mistakes and ensures that an organisation’s resources are used as effectively as possible
3. Cost savings
All of these benefits also have the potential to deliver cost savings. For example, if the organization has to devote management time to develop key messaging when it develops a new campaign this will take up valuable resource and may well deliver an inconsistent campaign. However, if through the brand strategy process that key messaging is already established, the management knows the campaign will be in line with the organisation's direction, and it will be able to be created quickly and will be consistent with previous work.
4. The monetary value of a brand
So why doesn’t everybody have a brand? Well, all brands are not equal and the best of those take time and resources to build. For example, Apple’s investment in advertising in 2015 (the last year it revealed its figures) was $1.8bn(1) which seems like a lot, until you look at the value the brand represents to the company - according to Forbes, in 2018, the Apple brand was valued at $182.8bn. That’s around 20 percent of the total net worth of the whole company!
5. Brand strategy delivers accountability
We do need to recognise that a strong brand does deliver benefits to its owners, and a brand comes from a brand strategy. Yes, in some cases that strategy may have initially been intuitive and informal, in other cases it would have been the result of an intentional process, but either way, to get the most value from your brand there needs to be a structure in place to ensure the brand is authentic (the roots and expression of those roots are true) and is being used correctly (how the brand is presented and used).
So, 5 reasons why it’s worth taking the time to make sure your brand is working as hard as it can for your business. This concludes this 3 part series - if you missed one, or want to read my other blog series please click here.
Bruce M McKinnon is a brand strategist and the author of the award-winning book ‘What’s Your Point?’. The book explores how brand strategy can fuel business growth, referencing some of the world’s most successful brands as well as sharing case studies from his own global consulting practice. The book can be purchased from Amazon, or to get free content and a chance to win a year’s supply of Source Climate Change coffee, sign up to my network here.