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Branding, Entrepreneurship, Strategy

October 6, 2018

The Importance of Branding

I’ve previously talked about what to include in a brand and how to make your brand strong. (If you haven’t read it yet it’s over on The Rising Tide Blog – you can check it out here). This week we will be discussing why branding is important and what its implications are for your business.

With any business, customers need a reason to buy. This reason is typically in the form of one, all, or a mix of three types of benefits: functional, symbolic and experiential.

Functional Benefits

Functional benefits refer to the practical benefits that are received. What does the business do? What problem does it solve? For example, a gym provides a place to work out and reach your health and fitness goals.

Symbolic Benefits

Symbolic benefits refer to the benefits that are received through use of or association with the product or service. Let’s use the gym as an example again. Many enjoy being the type of people who go to the gym. That’s not to say they aren’t getting the functional benefits of the gym as well. Many just enjoy being associated with a fitness lifestyle that the gym provides.

Experiential Benefits

Lastly, experiential benefits refer to the experience of using a product or service. Although this is similar to symbolic benefits they differ in one particular way. Experiential benefits are about the actual experience and not just the perception of the benefit. Let’s return to the gym example. Another subset of people just enjoys working out. They aren’t necessarily doing it for the health benefits or to be associated with a lifestyle. They just enjoy the experience or running, lifting weights or other activity. The benefit provided is the enjoyment of the actual experience.

Spheres of Influence

Businesses will focus on these benefits at varying levels depending on their branding decisions. The way a business chooses to highlight these benefits will vary depending on the sphere of influence they are dealing with. Your business has three main spheres of influence; The internal sphere or the culture you’ve created with you and your team. The external sphere which includes your clients and customers. And the relational sphere or how your business interacts with your customers/clients and vice versa.

Your branding can be applied to and is important to each of these spheres. And although the three types of benefits can be applied to any of the spheres I am going to pair each one with a specific sphere to explain how it applies and what it can mean for your business in terms of branding.

Internal Sphere and Functional Benefits

Having a strong brand is important in the internal sphere because it provides three main functional benefits for your business. It guides business decision making, builds financial value and positively affects employee morale and productivity.

Guides Decision Making

When making decisions about new products or services, advertising, collaborations and other business decisions having a strong brand will take a lot of the guesswork out of the equation. Unless you are going through a rebrand (a topic for another day) your brand will lead you to the right choice for your business. For example, if your brand values community and collaboration your decisions should give you opportunities to honor those values in a sustainable and profitable way. If you are a 1-on-1 business you might explore opportunities that allow you to collaborate with other professionals or allow you to build a sense of community among your audience.

Motivates Employees

As a teenager, there were two coveted jobs that everyone at my school wanted: barista at Starbucks and associate at In-N-Out. Being a barista at Starbucks meant you were mature and worldly. You could handle yourself around business people and college students. It made you feel important and respected. You were fueling the action-takers of the world. Without you normally productive people wouldn’t produce. On the opposite end of the spectrum was In-N-Out that was fun and lively. When you worked there you were fun and warm. You were giving happiness to families and friends. Without you, people would have one less chance to experience the joy of eating quality food with quality people.

These are just two examples of how branding can impact the morale and productivity of your employees. When people identify with the values of your business (which are articulated in your branding) they are more likely to feel pride in your business and their job. Your brand becomes something they can rally around and fully support.

Builds Financial Value

The financial value of your business is based on more than just the actual value of your physical assets. Much of the value is tied to how the business is perceived – your brand. A strong brand signals that your business has a future and makes it that much easier to get investments, loans or other benefits given to stable businesses (i.e. partnerships, endorsements, etc.) The investment in developing your brand will certainly have a return on investment that is well worth the effort.

External Sphere and Symbolic Benefits

Symbolic benefits are the perceived advantages people gain because of proximity to a brand. In business, a fundamental principle of marketing is getting people to know, like and trust you. The external sphere houses the “know” aspect of this principle. Within this sphere having a strong brand is important because it provides plenty of opportunities for people to know you. It supports your advertising, improves recognition and introduces you to new audiences.

Supports Advertising

The way you advertise, to who, how, where, why, when, is all rooted in your target audience and by extension your brand. Having a strong brand makes advertising to that demographic easier. It makes you stand out. There are a lot of businesses that do what you do but your brand separates you from them and shows how and why you’re different. Even if you change your product or service the values articulated through your branding in your advertisement still shine through making your business a symbol of those values.

Improves Recognition

Through marketing, your brand becomes recognizable or memorable. The way recognition differs from advertising is that the latter is you telling the external sphere who you are through your branding while the former is the external sphere noticing who you are through your branding. The more people hear you telling them who you are, the more they will begin to recognize it for themselves. This is where the real magic happens. If you are supporting your brand with quality work the recognition of your brand will lead to growth and the next symbolic benefit – new audiences.

Introduces New Audience

People share what resonates with them. They share it in particular with those who they feel it will resonate with too. Not only has your strong brand made your business memorable, it has made your business share-worthy! This has a concentrated effect on reaching your target audience. Your business is not only being shared, it’s being shared with people who are the most likely to be the most engaged and convert to clients or customers.

Relational Sphere and Experiential Benefits

The experiential benefits in the relational sphere house the “like” and “trust” aspects of the marketing principle referenced earlier. It creates opportunities for relationships through meaningful connection with your tribe, building trust with them and ultimately encouraging their loyalty to your brand.

Connects You With Your Tribe

When your brand resonates with people they become your biggest supporters. Resonance is defined as “the quality in a sound of being deep, full, and reverberating”. Your brand, my friend, is that sound. People see the fullness of who they are and who they want to be in your brand. Your brand keeps calling out to them long after they have left its presence. They like your brand; They want to be a part of what you are building; They want to be in your tribe.

Builds Trust

The connection you have with your tribe is meaningful. But just because they like and want to be around you doesn’t mean that they trust you yet. This is the relational sphere after all. It’s about relationships; it’s about how they experience your brand. You’ve told them what you are about, they’ve recognized who you are and now it’s time for you to prove it. People, especially in this day and age, are wary about what they invest in. Even if they like what you are saying your branding shows them in part that you are qualified to do what you said. People are more likely to invest their money in products and services that appear well-executed and authentic. Emotional reactions are a biological part of who we are and those reactions have a great influence on purchasing behavior.

Encourages Loyalty

Lastly, and arguably most importantly, strong branding encourages brand loyalty. By having a strong brand you inspire your clients to stick with you. Many people have the tendency to continue buying from a particular brand because they know, like and trust them to do what they say they are going to do.

Last Words on The Importance of Branding

Harvard Business School did a study on communication and found that you only have seven seconds to make a first impression. SEVEN! This is the underlying reason why branding is so important. In our overstimulated society, it’s near impossible to grab the attention of the public for long. To really make a lasting impression in the seven seconds you get, make intentional decisions about your business and brand. By focusing on the things that most appeal to your target audience, your chances of getting them to spend beyond the seven seconds with your business greatly increases!