The ROI of Branding: 5 Reasons It’s Worth It

Have you ever wondered why branding matters (or what is really even is?!), and how it gets your company from point A to point B?

Maybe, when it comes to brand talk, you’re like “yeah, I’m out, don’t care and I don’t think it matters”.

Or, you might know it matters, but you’re struggling to find the words or reasons to explain the what and the how.

Well, keep reading, because today we’re talking about the return on investment, or ROI, of branding

(And I’m here to make it clear, concise and completely understandable so that you feel like you have a rock to stand on when you’re having this conversation with your boss or company leaders (or even yourself, if you’re a team of one and you’re wondering why you’re even investing in branding in the first place.)

I have a few freebies that go with today’s topic if you’re interested – one is about your brand budget and the other is about creating brand consistency. Grab those here:

5 reasons why branding is worth the investment by designwithclarissa.com

Brand vs. Brand Identity vs. Brand

Before we get too deep into it, I wanted to go over 3 quick terms, what I call “the brand trio”, which are “brand”, “brand identity”, and “branding”.

All of these words are commonly spoken about interchangeably, as if they all mean the same exact thing. However, there are distinct differences, which I wanted to point out first, so that as I’m going through today’s episode we’re all on the same page.

What is a “brand”?

Lululemon. LaCroix. Hu Chocolate. These are all brands. A brand is made up of what you do or sell. It’s not the physical image of your company, but it is your business itself. This can even be a person, which is where the term “personal brand” comes into play.

What is a “brand identity”?

A brand identity is referring to the visuals that you use to identify your company. This is commonly called your brand suite, and it can include everything from your logo to photography and brand messaging. It’s essentially how you as a company present and market your brand to the world.

What is “branding”?

This one is more all-encompassing. It includes your company and your image, as well as perceptions surrounding your brand.

It keeps your ideal audience in mind, and works to shape the thoughts and ideas that your current and potential clients and customers have.

Some questions to ask here would be, “What do people actually think about my brand?” and “What do I want them to think?”

How They All Work Together

Now, your “brand” and your “brand identity” play a major role in your overall “branding”, so that’s why, a lot of the time, you’ll hear people, myself included, reference everything under this one term.

Which is exactly what we’re doing today: When I say, “the RIO of branding”, I’m referencing the whole package, all-in-one.

It’s probably a good idea to mention now that, although branding does have an ROI, most, if not all, of the things I’m going to talk about today are part of that little game we like to ignore called, “The Long Game”.

You know, the one that’s not so fun to play sometimes, the one that we don’t want to be patient for, but the one we’re all technically playing anyway?

The long game of branding usually goes like this: You enter the game, want big results right away, but soon realize you’re only going to see results over time. It’s not a quick win.

So, you try to rush things or do it halfway, only to realize yet again that you’re in the game, you’re stuck there, and you may as well have played it the right way from the start.

The key is to take your practices seriously, play the game well, stick it out, and you WILL see results if you’re patient – you can count on it.

Alright, now that we have that out of the way, let’s get into the reason we’re all here: What is the ROI of branding?!

Here are 5 things you can expect to see for your ROI on branding, over time.

No. 1: Increased Brand Awareness

Brand awareness is a fancy term for how well you’re known in the market, and how familiar people are with your brand, your products and services.

When you have a solid brand identity and branding suite, working together with the other parts of your business, you’ll begin to see more of an impact on growth and awareness.

This is probably one of the most immediate returns that you’ll have, especially if you are utilizing different marketing tactics like networking, social media, website, ads, etc. – because people will begin to recognize you by certain things you put out there like your brand identity, your messaging, and your brand voice.

No. 2: Brand Loyalty & Client/Customer Retention

It is easier and more cost-effective to retain a customer than it is to try to gain a new one.

You might not automatically think of branding in relation to retention or loyalty, however, strong branding will keep your audience around for the long haul, for a few reasons:

  1. Experience & Consistency: They’ve experienced your brand before, so they know what they’re getting, and they know what to expect.
  2. Preference: Even if you provide the same services or products as another brand, they have come to prefer you over your competition.

There are other things that can factor into this, such as customer service, personalized marketing efforts, and even your brand story – all of which can tug on the emotions and keep people along on the journey with you.

Think about it this way: When was the last time you told another person about your favorite (fill in the blank here), but couldn’t remember WHY you loved it so much?

Usually if you’re going to rave about something, there’s a story there that you actually remember, such as, you tried it and it tasted so good, or you went there and the people were so nice and very knowledgeable, or the atmosphere made you feel like you could actually, finally relax.

All of these scenarios focus on an aspect of, and point back to, intentional branding: the taste, the people, the environment.

Over time, intentional branding will keep your audience around, make them loyal advocates, and they won’t even think about going anywhere else.

No. 3: Strengthens Culture, Marketing & Sales

I don’t know if there’s anything more obvious (or hard to accomplish) that I’ve learned over my years working in this industry than this: Solid, consistent branding starts from WITHIN.

Whether you have a team of Y-O-U (meaning, it’s just you), or you have a team of 500, the effects of branding on internal culture as well as marketing and sales efforts are undeniable.

If your team, AKA, your first and main brand ambassadors, do not get your brand, do not know what it stands for, do not align with its mission, and do not know how to communicate it well from the inside out, then you have some work to do.

Strong branding and communication internally, within your team, will allow you to effectively and consistently communicate your brand in a way that brings everyone together.

It will align you and your team so that you’re all working towards a common mission and purpose.

If there’s no clear communication about who your brand is, it’s vision and values, where it’s headed, and how you’re going to get there, then everyone (both internally and externally) will make things up, be confused, and altogether not align – which will make it very hard for your brand to gain any long-term traction.

However, if everyone knows where the brand is going, they can begin to envision how they fit within the mission of the brand.

They start to see where they could go personally and professionally, and even how they could help take the brand to new heights, too.

You’ll start to see the current company culture make changes for the better, or even take shape in the first place, where you didn’t have one before.

No. 4: Higher Profitability Potential, Perceived Value & Credibility

For all my numbers and data people listening: This is what you’ve been waiting for!

I can say without a doubt, it’s a known fact, that when your branding is done correctly and consistently, you have a much higher chance of creating premium offerings, raising the perceived value of those offerings, increasing prices, and having a higher profitability potential.

Think about it this way:

What are the so-called “premium” brands you’re willing to pay for? Is it those Air Jordans or Spanx? What about that no-chip nail polish or even the snazzy gym or spa you can’t seem to let go of?

WHY do you pay what you pay for those things?

SURE the product, the quality, the customer service may be slightly better or different than the competition, in a way that you can’t resist. 

However, it’s a pretty well-known fact that, in the case of premium brands, you’re not just paying for the goods and services rendered.

You’re paying for the brand name itself. You’re paying for the feeling that you get when you leave.

This no doubt contributes to the overall ROI of their branding.

And BTW, to further prove my point that this is the long-game: These companies didn’t just appear and have a great brand or loyal following in a week. It was built over time – YEARS – some longer than others, yes, but they were no overnight success.

No. 5: Branding Clarifies The Introduction Of Anything New

When you have a new offer, you need a vehicle to deploy that offer.

That “vehicle” 100% starts with your branding.

Stable branding allows you to create systems and standard operating procedures that frees you up to introduce new products, services and even concepts and initiatives in a clear and effective way. 

Think about it this way:

If you didn’t have a way to put offers or concepts together, what would you do? You’d likely create something new every single time.

That’s a waste of time and effort, and also leaves room for errors and inconsistencies from previous methods.

Branding allows you to stick to standards and utilize them over and over again in a concise and consistent way, so you can focus on what really matters: creating a unified team, deploying irresistible offers, and continually working to make everything better in order for the brand to grow.

The Long-Term Impact

The list can go on, there are other things that branding can do for your business, such as create operational and business clarity, and help you promote a clearer, stronger differentiation from your competitors, and more.

You can look back over time and see these things happening: increased brand awareness, brand loyalty and customer retention, the effects on company culture and perceptions – and that is the overall return on an investment in branding.

It’s just not something you can see right away or track like a line item on a spreadsheet. It’s much more elusive, but the effects can be seen over the span of even just a few years.

Because of this, you wouldn’t want to stop doing it, because you know everything we’ve talked about today can be true and there’s a long-term impact that can’t be denied.