One of the most common questions I get asked is, “what is the return on investment of branding?”
To be honest, it’s not always an easy answer. But today, I’m sharing with you seven ways that good branding makes you more money!
What up, y’all, I’m Liz Marie, your friendly neighborhood brand strategist, creative director, and lover of people making money. I am all about women and BIPOC entrepreneurs making money!!!
That’s what I’m here for because I believe that money is power and that power will help us create a more equitable world. Nothing’s more important than that.
Money is Power (let’s take it from white men, shall we?)
Let me start off by saying that the top-ranked brands in the world outperformed the whole rest of the stock market by 74%. That means the best brands outperformed the already great, big, huge, successful, thriving companies by 74% over the last 15 years. That’s insane! And that is the power of branding. But that doesn’t just affect big, huge companies. That power can be leveraged for your brand, too.
I have worked in branding for 14 years now, and over that time, I worked with a lot of finance companies, and I really began to learn a lot about money that I (and most people) didn’t get exposure to growing up. I learned how fucking powerful it is to have money and that most people who have it already have power because they’re white men (and white women too).
So, if you are a marginalized or historically oppressed person, you don’t have the advantages, privileges, opportunities, resources, and access that traditionally white men have had. For people of color, for women – women of color, especially – that overall haven’t had the access resources, opportunities, financial anything that white men (and women!) have had, money is power. It is a game-changer. It gets you in those rooms; it gets your family on a new playing field. It breaks cycles.
That was a lot to say that I’m all about people making money. But, anyway, I really got to a point where I wanted to do good in the world and contribute to equity inequality with what I do with my life. And I had this epiphany that the skill set I already have working in branding really does help people do that. Because if you’re a business owner, branding helps you make more money, which helps contribute to building your own wealth.
But again, this isn’t something we’re taught! I didn’t grow up learning about branding. And I was a white, middle-class kid. So if I didn’t learn about it, I know that many other people didn’t learn about it. I was just really fortunate and privileged and had all these opportunities to get access to this information, which is exactly why I’m sharing it with you guys today.
HOW CAN BRANDING MAKE YOU MORE MONEY?
#1 You Can Charge More Money!
The first and my favorite one, you can charge more! When you’ve invested in your brand, when it looks polished, when your messaging is on point, people will pay more money for that shit. That is why luxury brands mark up their products thousands of percent (check out Luxury Branding – How to Look Expensive for more on that). If you are polished, clear, targeted, if you stand out, people will pay more for your product or your service or your brand than they would for the commodity or even for another competitor. So, the first thing you can do is mark that shit up!
#2 Win New Customers From Your Competitors
Branding sets you apart — that’s basically the entire point. That’s why we do this. And what happens when you are set apart from people out there? Not only can you gain new customers or clients who haven’t bought your type of product or service before, but you can steal them away from your competitors because you have something superior. And obviously, more customers/clients = more money!
A good way to think about this when you’re evaluating if it’s the right time to invest in your brand is to think about:
- How many more customers or sales per year would you need to offset that cost?
- So you think that’s a reasonable number to obtain?
- Do you think that branding would help you get that number?
Now, you won’t know for sure, but I would imagine you have a pretty good sense of where that might land and you can see if it’s worth it or not. It’s always up to you.
#3 Your Customers Will Be More Loyal If that Shit is GOOD
/The Better The Brand[ing] The More Loyal The Customer
Your customers will be more loyal to your brand than ever before if it’s fucking good. One of the most important marketing metrics there is is “customer lifetime value.” It measures how much money your one customer brings into your business throughout the entire lifetime of the relationship (which might be their actual lifetime).
The idea behind this is that it is a lot cheaper to keep a happy customer and keep them purchasing again and again and again than it is to go out and get a totally new person to replace them. So this may be obvious if you have business experience, but you’re better off keeping people happy and keeping them coming back than trying to reinvent the wheel all the time (also, that’s so fucking stressful).
So if you have really good branding, it creates loyalty. People feel attached to it. It’s the reason people wear logos all over their body or feel so strongly about, you know, Pepsi vs. Coke. There’s something to, “this is my brand. I identify with it. This is the one that I get. I would never get that other one over there.” And as a business that keeps you rolling, you need that loyalty. And it also gets other loyalty referrals: people give it as gifts; they recruit other people into your sphere of influence and help you grow.
#4 People Who Trust Your Brand Are More Willing to Buy New Things From You
So this is that same idea of loyalty but extended to growth, scaling, building out your products or services. If someone already trusts you with this thing over here, they’re going to be that much more likely to buy the next thing from you. That gives you more opportunities and different product lines – especially if they’re not competing – to get more money from just one customer, contributing to more revenue, more money, and more wealth! These are all good things.
The absolute utter, complete master at this is Apple. We all were totally down with Apple, making computers all in great standing in line for them, all that shit. Then they came out with phones, TVs, watches, all of this other stuff and no one hesitated because we trusted them to do this one thing well, so we trust them to do this other thing well. There’s a little more to it than that with Apple as well. Part of it is they position themselves, not as a computer company, but as a “think differently” company (there’s an amazing TED Talk on this by Simon Sinopec). But, a big part of it is that we trust apple with this, so we will trust them with that and give them even more of our money (especially because they charge a BIG premium).
#5 Good Branding Helps You Market More Effectively and More Efficiently
So, this is the idea that you’re not only saving some resources on marketing costs, but it’s actually more effective, so you’re getting more bang for your buck.
Now I want to be clear: Branding is not marketing. Branding is not marketing! These are two different things. I have a video on this to discuss the difference because everyone gets it confused, and that’s totally okay. Branding is what you stand for, what you want to be known for, your reputation. Marketing is how you get out that message. But they go hand in hand.
If you have a really unique differentiated brand, your message is super strong and resonates with exactly the people you want it to resonate with it’s just going to make your marketing that much easier. It’s going to make your marketing money – your dollars, your budget – go that much further, and you’re not going to have to work quite as hard. So it saves you money and gets you more bang for your buck.
#6 Your Brand is an Asset!
This is a super commonly overlooked attribute, especially for small businesses! Your brand has value. It is like an investment; it’s an asset that you’re creating that is worth money!
Here’s a way to think about it: You’re probably a little bit familiar with stocks on the stock market. This is a share of a company that is worth X number of dollars. Well, when it comes to determining a stock share price or its valuation, when it’s going through its initial public offering stock market, there are a few different factors. Part of the factor is 30-40% is based on tangible assets. So that might be literal inventory or the staff, like things it really owns—hard assets. But the rest of it is intangible assets, and 30-40% of that is your brand. That is a huge, huge, huge portion of your valuation when you go into the stock market, that’s based on your brand, which is your reputation and the likelihood that you will be able to make money on that reputation in the future. The belief that there will be sales that come from your goodwill in the marketplace applies to all sizes of brands.
You may not be familiar, but the S&P 500 – a common stock market index – represents the largest 500 companies by these valuations. But there are small companies in the stock market. That’s a whole type of investment. There are what’s called micro-companies. All kinds of companies can go public and get investors. You could get investors in your company in the future. You could get private investors in your company. You could sell your company. If you build a sustainable business and a strong brand with a strong reputation, you could sell that shit and be done and retire and have your generational wealth and just be good.
It is important to build a brand because you are building an asset! Whew – that got me all fired up.
#7 Good Branding Attracts Great Talent
This is another really overlooked element, especially if you haven’t hired employees yet. But as you grow, you will find out that employees – talent – are one of the most expensive fucking things you will ever do in business. That is probably the bulk of your costs. And it is really, really expensive when they leave.
You may also know if you’ve ever managed people that sometimes one amazing, super badass employee is worth like a whole bunch of shitty ones because they get that much more done, they’re that much better at their job. So good branding is kind of the flip side of creating an amazing culture. They really go hand in hand. Branding is like the external-facing stuff, and culture is the inside stuff. And if it’s awesome, talented people want to work for you, talented people who are going to be really good at what they do and help you make more money.
AND if you’re really, really awesome, they’re going to want to stay there for a long time. They’re not going to leave. So you’re not going to have to constantly be hiring and training new people, which is really expensive. And you’re going to build this amazing culture that people want to be at. That is really, really desirable, not just for the employees and the talent, the whole good of the workforce, but also for investors too (if you’re looking for that in the future). So, attracting great talent is a great way to keep and make more money.
So, at the end of the day, say it with me: great branding makes you more money!
If there’s one thing you can walk away with, it is that. And if you’re not in a place right now to invest in your brand, that’s not what I’m trying to tell you to do. You don’t need to go spend your entire budget and throw it into branding because that’s not necessarily realistic either. But I want you to have this mindset that this is something you are building every day, over time with your actions, your decisions, and certainly with your strategy, messaging, and design. Thay way, you create this asset that not only makes you money on a day-to-day basis, but hopefully, eventually, you can sell, or you can pass down, or you can get money on the backend from this asset that you’re creating because money is power. And I want you to have A LOT of fucking power!!!
For more on topics like this, you can check out my FREE training, How to Build a Powerful Brand from Scratch. I’ll get more into the nitty-gritty of the different components of really, really awesome brands. Or to see where you’re at and kind of feel out what do you need to work on? What next? You can take my quiz, Where Are You in Your Brand Journey?
Until next time, stay badass!
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