Branding: Is it worth it?

The idea of brand building began when companies took notice of psychological research that showed patterns in how people made decisions. Businesses realized they could use these tactics to get more people to make the decision to buy their product. It became increasingly successful and companies began spending more and more time and money on building their brands. But as companies continue to race to emotionally connect with consumers do those investments still pay off? Would a company be better off remaining anonymous and simply being there at the right time for a customer to complete their transaction? The answer largely depends on the type of services being provided and the end goals of the company.

There are still many benefits of building a brand. A brand can be used to distinguish products from one another and create meaning behind the product purchase. For example, a Toyota Prius driver carries a much different connotation than a Chevy truck driver. A well-built brand can help increase customer loyalty and satisfaction. With brand devotion customers will even seek out a specific brand over another. Those that are loyal to a specific brand have been proven to buy that brand over others both more regularly and more frequently. All of this is great for a company but building this level of brand allegiance takes a large amount of time and money. It cost Pepsi nearly a million dollars just to create their logo. So what is a company to do? Go all in on building out their brand and reap the benefits of their upfront investment for years to come? Forget about the branding all together and spend money and just those transactions that warrant a positive ROI?

Visuals of the Chevy Truck Brand.

The $1 Million Pepsi Logo

For most companies branding should not be ignored. There are many benefits of having a great brand that can gain both short and long term success. Negative customer reviews or bad word of mouth can have a real impact on a company’s bottom line and growing repeat business can give a company a substantial competitive advantage. However, there are more cost-effective ways to build a brand than throwing large amounts of money on splashy TV ads. Emphasizing a positive customer service mentality is a free and easy way for many companies to build customer loyalty. An easy online check out process or friendly return policy may do more to make a memorable impact on customers than advertising. Conversely, having poor customer service cannot be easily remedied by ads. Smaller companies often times over-emphasis brand building as their advertising objectives. In many cases it is far more advantageous to master the free methods of building a great customer experience and then focus the dollar being spent on bringing in new customers. This will lead to great word of mouth from more and more people and cause a positive ripple effect to make a brand having a more meaningful and lasting impact.