What Is Branding And Why Is It Important For Your Business?
According to the Cambridge Dictionary, "the act of giving a company a specific design or logo in order to sell its goods and services." This used to be, at least according to the general view at the time, a very accurate description of branding.
Branding was (and still is) misunderstood when it was reduced to only its visual identity. Many people, professionals or not, still associate branding largely with the visual identity, including the name, logo, design, packaging, etc. Even senior marketers still promote the same outdated idea of branding despite the fact that the concept and our perception of it have changed significantly over time.
Branding is important since it not only leaves a positive impression on clients but also lets them know what to expect from your company. It's a strategy for differentiating yourself from the competition by outlining precisely what you provide that makes you the better choice. Your brand is created to correctly represent your company's identity and desired perception.
The methods used to develop a brand include advertising, customer service, social responsibility, reputation, and visuals. These elements, along with many others, come together to create a distinctive and, ideally, eye-catching profile.
What Is Branding, Exactly?
If the idea of firm branding could be conveyed clearly, there would be less ambiguity and dissonance. However, a firm grasp of branding demands a thorough knowledge of the principles underlying business, marketing, and even (human) relationships. A specific description that encompasses all that branding comprises would fall short of providing clarity since the phrase is so wide. But we propose the following definition to limit the dissemination of out-of-date, incorrect, and inaccurate information on branding:
Finding, developing, and maintaining the assets and behaviors that shape how stakeholders perceive a brand is known as branding.
It is clear that the latter (Cambridge) delivers more surface-level information when compared to the official Cambridge definition, giving the reader a false sense of knowledge. This could be one of the reasons for why the great majority of people see that definition as accurate and rely on it as the foundation for their analysis of the problem. In actuality, if you base your comprehension of branding on a definition that reduces it to just one aspect (visual identity), every other branding-related idea will fail to make the necessary connections.
Even while our definition of branding first seems more ambiguous than the other, when we look more closely at what it means, it makes much more sense. Here is a brief summary:
1. Consistent practice
Branding is a never-ending process because it never ends. People, markets, and businesses are all undergoing simultaneous changes, and the brand has to grow to keep up.
2. Identify, create, and manage
In order to position yourself appropriately, you must first decide who or what you want to be to your stakeholders. Then, you must design a brand strategy. Finally, you must continuously manage everything that has an impact on your positioning.
3. Combined assets and activities
Your positioning must be translated into resources (such as a visual identity, information, products, and advertisements) and actions (such as services, customer service, human connections, and experiences) that progressively shape how your stakeholders see you.
4. The impression of a brand
It also goes by the name of reputation. This is the connection that a person (whether or not they are a client) has in their mind with your brand. This perspective is the outcome of the branding strategy (or lack thereof).
5. Parties involved
Not only customers have an image of your business in their minds. Stakeholders include prospective customers, current customers, employees, shareholders, and business partners. Each individual perceives the brand differently and engages with it in ways that are acceptable for them.
What Do You Mean By Branding?
Branding is very important due to the overall impact it has on your company. Branding has the potential to change how people see your business, attract new customers, and increase brand value. However, if done poorly or not at all, it may also have the opposite impact.
Let's be clear about one thing: a company's reputation grows whether or not it takes action to address it. A reputational outcome might be either favorable or bad. Simply taking control of your reputation and striving to influence it constitutes understanding and applying branding. This is why it's crucial to consider branding from the very beginning of your business.
Contrary to popular belief, branding is not a "expensive marketing method utilized mostly by large corporations." The market you're in and the level you want to compete at have a big influence on branding, which is instead mostly dependent on common sense. The cost varies substantially from situation to situation since branding is a continuous synthesis of several skills and activities. Of course, top-tier professionals and flawless execution will be more expensive than anything else. Similar to this, branding a worldwide, multi-product corporation will be more harder and need more resources than, say, branding a small business. There is no one approach that works for everyone.
Branding Increases A Company's Value
Branding is important when it comes to creating future revenue, and a strong brand may increase a company's value by giving it more influence in the market. It becomes a more alluring investment option due to its solid market position.
Branding Attracts New Clients
A strong brand will have no trouble getting new customers from recommendations. Customers that see your business favorably are more inclined to conduct business with you because of the familiarity and perceived reliability that comes with utilizing a name they are acquainted with. This is often shown by strong branding. Once a brand has established itself, word-of-mouth advertising will be the company's best and most effective strategy.
Like a person's reputation, a brand's reputation precedes it. An unbreakable chain of dissemination starts after the market has formed a certain perception of the brand. By word of mouth, the perception will spread, enhancing or detracting from the reputation of the brand. If the brand is well-known, potential new consumers may encounter it and develop positive relationships with it, which will increase their propensity to choose it over rivals when making purchases.