Posted on February 2, 2017 by James Duquenoy
The power of a brand is often underestimated or overlooked in the world of business, both online and offline. A strong brand becomes trusted by both potential and loyal customers, who associate it with high quality products and good customer service – projecting a premium image of a business. This means customers are more likely to frequently purchase from a business and are willing to pay premium prices.
Brand Recognition and Loyalty
The main benefit of branding is that customers are much more likely to remember a business. A strong brand name and logo helps to keep a company in the mind of potential customers, who will recognise a brand and become more likely to make an impulse purchase. Similarly, a memorable and recognisable brand can grow a loyal set of followers – customers who are keen to stay up to date with the business’ latest products and will make quick buying decisions. Some people are influenced by the current trends (such as clothing brands) and will purchase multiple products from brands which are widely recognised, and will earn them prestige from owning a popular product.
The recognition and loyalty generated by your brand will make customers more likely to purchase other products from a business. It significantly reduces the risks faced by consumers when making a purchase from a business. Since they associate reliability and quality with a brand (based on their experience of previous purchases), they trust that other products under the same brand will be of similar quality – making them more likely to complete a purchase.
Project a Premium Image – Demand Premium Prices
A strong, distinctive brand that is associated with good products and customer service will create an “image” in consumers heads, associating a business with specific qualities. If a business treats a customer badly (for example by offering poor customer service), that customer will remember and is very unlikely to return. Similarly, building a good relationship with customers through good customer service and high quality products will make consumers feel good about a brand, making them more likely to tell friends and family.
As word spreads, a brand becomes increasingly strong and well known. This projects an image of a large, experienced and established business (which also decreases the risk for potential customers, as a larger business appears safer and more trustworthy) which is associated with high quality products and reliable customer service.
These premium associations mean shoppers are willing to pay more money in return for better products and a better service. Businesses with a strong brand can therefore charge more for the same products. Loyal fans will also be willing to pay more in return for access to products from their favourite brand.
Increase Profits, Value and Create a Barrier to Competition
As already mentioned, a strong brand gives businesses the opportunity to charge more for their products and helps to increase sales of other products – creating more profit for a business. Strong brands can also enhance the financial value of companies, as they differentiate the products or services from competitors – and new business owners are keen to get access to the power behind a recognisable brand. A powerful brand can also create an effective barrier to competition – as more consumers become familiar with a brand and therefore are happy to pay extra in return for branded products, it becomes increasingly difficult for competitors to attract customers. Loyal customers will often pick the brand they’re familiar with over a competitor, even if the competitor offers better value for money – and competitors will have to spend a lot more money on marketing in order to boost the strength of their brand.
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