The ROI of branding
A branding project is an expensive undertaking. What do you get for it?
First, let’s make sure we’re on the same page about what a brand is, and what branding is. A brand is the association of your company’s image with its reputation. A branding project seeks to align these by creating a clear definition of what your company stands for, expressing that externally, and making sure that it’s actually lived internally.
This type of work is genuinely transformative and can generate huge returns. They can be hard to measure however, because they’re long-term and indirect returns. It’s not like putting out an ad and immediately seeing increased leads, or tracking conversion rate. But the returns do exist and can be tracked.
The most visible part of a rebrand is external–a company has new marketing materials, a new look and feel, etc. When these are consistently presented, and aligned with a company’s performance and reputation, there are a number of benefits:
- Price premiums. One of the biggest reasons to invest in branding is the ability to charge a premium price. Customers prefer trusted brands and are often willing to pay a higher price in order to mitigate risk.
- Lower cost of sales. When image and reputation are aligned, there are fewer hurdles to jump through during the sales cycle.
- Faster sales cycle. Close deals faster when you don’t need to spend as much time introducing the company.
- Increased customer loyalty. When customers know what to expect across interactions, they become repeat customers–or better, brand evangelists.
- Credibility for larger deals and larger customers. One of the main reasons companies engage us for branding work is that they want to move up-market and start working with larger companies. They often have a solid product and process, but don’t look or sound as good as what they’re selling.
- Decreased reliance on individual salespeople. By making messaging and marketing consistent across the organization, companies can rely less on the relationships of individual salespeople. These are still going to be important, but customers can at least expect consistent messaging, values, and approaches regardless of through what channel they communicate.
In the end, a well-defined brand enables a company to demand a price premium and can dramatically lower the cost of sales in the long run. The impact, however, is typically not immediate, can be costly to measure (unless the company already has metrics in place), and the actual return relies on a large number of external factors.
For all the external benefits, the internal benefits of a branding process are even greater. Keep in mind that the process isn’t simply about developing new marketing materials, but is about defining a clear vision and aligning the entire company around it.
The most significant benefit–also the most difficult to directly measure–is aligned effort. An analogy I use when I’m speaking about this is a tug-of-war. Every company is trying to go somewhere, and when the mission, vision, and values aren’t defined, or aren’t clearly defined, different individuals and departments tend to pull in different directions. Once these are defined–and the organization commits to them–people across the organization will work in concert.
Other internal benefits include:
- Increased morale and productivity. Simply put, when a direction is clear, morale and productivity increase.
- Lower employee turnover. And when morale is good, employee turnover is reduced.
- Faster employee onboarding time. When vision and culture are clearly articulated, new employees get up to speed faster and feel part of the team more quickly.
Overall, the internal benefits to having your entire company pull in the same direction (and know what direction they need to pull) are significant and long-term.
The benefits of the process itself
Beyond what we’ve outlined above, much of the value of a branding project isn’t in the actual outputs, but in the process itself. A full process gives voice and ownership to employees throughout the organization, and makes them feel involved. The process brings the executive team together for some time to really think strategically. And the process allows the organization’s leaders to step back and think clearly about where the company is going.
A branding project is a significant undertaking, and not inexpensive. But the return is far more significant, and generates positive movement throughout the entire organization.
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Hey! This wasn't written by a sleuth of bears! It was written by Josh Orum, who does awesome work at Loud Dog, a digital branding firm in San Francisco that helps businesses express themselves authentically via identities, websites, and marketing collateral.
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