Most times, brand building for entrepreneurs and founders of new startups is a difficult process. They find it that they had to reduce their charges, go the extra way to convince potential customers, and even overwork themselves at the early stage of their business.
The reason for this is not far-fetched, it is simply because the new brand does not have a solid outlook yet. In today’s world of business, popular brands or companies with notable trademarks or outlooks can indeed charge premium prices for their products and services, while less-established brands cannot.
Even in the investment, merger, and acquisition sector, founders with high brand equity can negotiate for a higher purchase price.
The Drawback of Brand Building
Even with all the benefits a business stands to gain from brand building, many business owners are thinking about reducing costs for this process or completely forget about it.
This in some cases might be a result of high time investment or huge financial costs. In a Forbes article, Chris Shipferling, Managing partner of Global Wired Advisors notes business owners put the brand building at the back burner of their business to focus more on other pressing issues like customer service, digital marketing, and all the various operations that involve running a business.
Even with this, not pursuing brand building actively might invalidate all other major operations as it is detrimental to the health of a business.
Branding boosts familiarity, increases brand equity, and drives sales volume. In all of this, the huge cost of investment required to build a brand is lesser than what businesses stand to gain from a solid brand image.
The Benefits of Brand Building
Asides from the benefits listed above, there are several reasons why brand building should be a major priority of business owners. These include:
1. The Immediate: When you need to get a product, it is more likely to get more than 50 brands offering that product or service. Among these options, some products are better, while some are worse, but they all fulfill the same need.
So, how do you differentiate your product from this crowd? Competing on price is no longer a sustainable factor, here comes the need to differentiate your product with a solid brand strategy.
This is more important for eCommerce brands, as the driving factor for increasing sales is making a strong impression and communicating quality.
When you invest in brand building to stand out from investors, it can boost conversions, which generate more sales.
2. The Enduring: When competition in a market becomes stiffer, it leads to a shorter life cycle for some brands. To avoid this, it is critical to create a lasting impact in the market.
Strong brand building can help in creating and securing a competitive advantage.
Effective brand building can have a lasting impact on sales velocity, business growth, and an increase in business valuation.
In this case, there are two benefits; the increased revenue generated from the brand building makes the company more profitable, and secondly, you can earn more from a transaction if you decide to exit. The overall result is a more sustainable business that continues to hold value.
3. The Intangible: To wrap it up, customers want to shop with a brand they can trust with their money.
Providing customers with a sense of ease and security not only ensures they come back to the shop but also refers your business to others.
Recurring sales and loyal customers drive revenue, and public acceptance of your product improves brand image.