Why Branding Is So Important
If you follow some of the world’s best brands, like Nike or apple, you know that branding is so important to a business.
But those are all multi-million dollar companies with thousands of employees. So why does a small business even need to spend time, money, and energy on their brand?
Thinking about those brands mentioned above, you probably recognize them because of their visual identity - the logos, packaging, and website styles that we so easily identify and associate with a company. However…
Branding is so much more than visual identity.
Think about Starbucks Coffee. Everyone knows to identify the Starbucks on the corner because of its distinctive green logo. But why do you choose to go into Starbucks instead of stopping into McDonalds for a coffee? Blind taste tests show that people vastly prefer Dunkin Donuts or McDonalds coffee. And yet, more people will still go to Starbucks for their coffee even if they don’t prefer the taste or quality and the reasons go far beyond a bright green logo. Starbucks revolutionized drinking coffee by turning it into an experience with aesthetic, temperature controlled locations, trendy curated playlists, and a loyalty program that boasts more people than the population of Michigan.
And while you might prefer the taste of coffee at your local indie coffee shop, the fact remains is that when you see a Starbucks you think of coffee. And when you think of coffee…most likely there’s a Starbucks right there.
That is the power of branding.
It can literally change how good something seems or the way you think about a product. Seth Godin defines a brand as a set of expectations, memories, stories and relationships that account for a customer’s decision to choose your product or service over another. In essence: it is how your customer perceives you.
And the good news is that you can direct how your customer perceives you, as long as you deliver on what you promise. Branding is the first step in building a relationship of trust with your customer, and establishing your reputation.
3 key elements of branding that works
There are 3 key elements of good branding. They are simple and essential, but many companies overlook them:
Focus
A big mistake I see many founders make is that they want to sell to everyone. Trying to be competitive in the very broad market of “everyone” is really difficult. Not only is there tons of competition, but how do you realistically create a marketing strategy targeting so many unique types of people? The more specialized and specific you can be about your target audience, the easier it will be to build trust with them and to get them to engage with your brand.
Let me clarify this with an analogy: think about who you would want building your house: a jack-of-all-trades handyman, or a master craftsman (and who you would pay more to do the job)? As long as there are people who want quality homes built, you want to position yourself as a master craftsman.
Values
Even when you have focused in on your niche, it can still be difficult to stand out in the market. There are millions of lawyers in the United States, and likely a few hundred in your immediate area. Why would someone come to you and not to the other guy? The big differentiator is your values.
If you are able to position your brand to stand for something different than your competitors, then you can make real headway in a crowded market.
Trust
People want to do business with people and companies they know they can count on. Trust is hard-earned, and easily lost. Make sure your values are apparent in every part of your business, from shipping practices to customer service.
A great example of a brand that exemplifies trust is Nordstrom. They are more expensive than other department stores, like JC Penny and Macy’s. While they may sell similar products, Nordstrom’s biggest differentiator is the trust their customers have with them. Nordstrom’s whole business philosophy is about putting the customer first and they truly walk their talk. From their customer service practices to their very flexible return policies, Nordstrom knows that the best customers aren’t necessarily the ones spending the most money. They’re the ones who come back to shop again and again.
What goes into your brand strategy?
Are you using focus, values, and trust? Or have you found another component of branding that is more effective? Share your thoughts in the comments below and we may include them in our next newsletter.