A spreadsheet is one of many places the direct effect of your brand awareness efforts can be seen.
As both a branding consultant and business owner, the return on marketing dollars is a subject that is important on many levels. As a believer in the power of a well-positioned brand platform has over hearts and minds, I advocate daily for appropriate investments into creative, advertising, and strategic efforts, whether with my agency or anywhere else.
As a business owner, I see the balancing act it takes to cover expenses like payroll, taxes, rent, and software before even considering advertising or design investments. For small to mid-size services, marketing budgets are often seen as a luxury item after the more tangible expenses are taken care of.
There are advantages theses services have though in how they can appeal to others regardless of monetary resources. Diligent uses of social media and email marketing allow for low-cost direct engagement with your audience and organic growth within their networks.
While I always preach that your brand is you, the service you offer, why you offer it, the quality you provide it in, and your brand(ing) is the content you put out in the world and an ever-important tool that should always have resources behind it. Your branding is no different from your vehicle; it requires care, maintenance, and, in some cases, repair to maintain optimum performance. Putting dollars behind the design of your brand assets may seem trivial; however, consumers can and often do make immediate decisions on who they will spend their money with based on the visual quality of a service. As consumers, we all want something to speak to us, find companies relatable, and ultimately feel like these services can listen to us as we journey together. What you say, how you say it, and what it looks like matter, period.
“While it is difficult to gauge a dollar for dollar return, there is one number I believe is consistent in both investment and return, and that’s zero.”
– Paul Mitchell
The return on investment (ROI) of branding can be challenging to quantify precisely because it involves intangible elements like brand perception and reputation. However, many studies and industry reports have measured the impact of branding on a company’s financial performance. Here are some statistics and insights related to the ROI of branding:
- Customer Loyalty: A study by Bond Brand Loyalty found that 81% of customers are more likely to continue doing business with brands they trust. Building trust and loyalty can lead to repeat business and increased customer lifetime value.
- Premium Pricing: Strong brands can often command higher prices for their products or services. A study by McKinsey found that consumers are willing to pay a premium of up to 20% for products or services from brands they trust.
- Market Share: Brands that are well-recognized and trusted in their industry are more likely to gain market share. A strong brand can help a company differentiate itself from competitors and attract a larger customer base.
- Employee Retention and Productivity: Brands with a positive reputation tend to attract and retain top talent. Employees who are proud of their company’s brand are often more motivated and productive.
- Reduced Marketing Costs: Established brands often require less spending on marketing and advertising because they benefit from word-of-mouth referrals and customer loyalty. This can lead to cost savings over time.
- Brand Equity: Brand equity represents the value of a brand’s intangible assets. Building brand equity can have a significant impact on a company’s long-term financial health. It can lead to higher stock prices and market capitalization.
- Social Media Engagement: Brands with a strong online presence and social media following can engage with customers more effectively. A study by Sprout Social found that 75% of consumers are likely to share a positive experience with a brand on social media.
- Reputation Management: A strong brand can help protect a company’s reputation during crises. Reputation damage can have a substantial financial impact, so having a strong brand can mitigate these risks.
- Long-Term Perspective: Branding often yields results over the long term. While the initial investment may not show immediate returns, a well-managed brand can deliver sustained ROI over time.
Brand your budget with purpose.
While measuring the exact financial impact of branding can be complex, remember that any dollars responsibly put towards your public brand awareness is worthwhile. How those dollars are allocated, though, is what can truly make an impactful return. Properly plan the strategies on how these funds are used using targeted demographic research and rationale. Aimlessly making marketing and branded assets, often without focusing on what they are saying and to whom they are saying it, becomes counterproductive.
A strong brand is built with intelligence, dedication, and heart, as well as dollars. Putting all these efforts together into a story others want to be a part of can become the ultimate return.