“Why should I spend money on branding not marketing?”
A conversation that comes up often while we’re talking to clients (especially in China), how can we quantify value for money? Is it worth it? And it’s a great question to be asking. If your product or service is not unique, there is no doubt branding is the number one differentiator. (price is part of your brand). Not only is your brand position and identity the foundation of marketing, a recent survey of B2B business owners, branding is considered “critical” to the growth of a company.
A simple change in brand position can be enough to alter the perception of an existing product and take you global. If you don’t believe me, check out this incredible Oatly rebranding case study from the agency, Forsman & Bodenfors, in Sweden. Once the strategy and design direction was set, marketing could be handled just by taking customer feedback and amplifying it. Social content and events can all be run by your team and partners. Between 2017 and 2018, the company’s revenue grew from $1.5 million to more than $15 million.
The financial success of Oatly is undoubtable, but how do we measure this for smaller projects? A brand fresh, an updated website, or new packaging? What if you don’t have the budget or confidence of stakeholders to change your position in the market.
Fortunately there are a number of ways you can assess the value of a brand and brand marketing project. Use one of the following methods to set goals, forecast what that value is worth to the business, then assign a budget that represents the return.
1 Financial value
How much does your company value change? Company valuations are very much weighted on brand, additionally they not only consider perceived worth, but also the budget you’ve spent with a branding firm. There are more ways to do this than I can explain here, but great resources here.
2 Customer value
How much more than your pre-re-brand will customers pay for your product? One study cites there is a 33% increase in revenue just from presenting your brand consistently.
Can you survey them and ask if they feel the price is high or low for what they received, how much will that change after a new or changed brand or packaging. The pricing strategy is based on consumers’ perceptions of value, it’s easy to charge more when your brand communicates trust and quality. Word of mouth will increase, which decreases marketing spend. Forbes magazine explains the number one reason for a business to invest in branding is to increase profits.
Are you getting more job enquiries? How much does that save on headhunters?
Company pride? Lower turnover? What’s the cost of replacing a single employee? Some industry experts consider this to be RMB 250,000 per person! And what about you, a business leader, what is the value of walking into an environment where everyone is aligned on what your brand stands for and where you’re heading?
Have you ever seen the advertising for global consultancies in airports? This B2B marketing is there to make their employees feel proud, not to target the one or two CEO’s that might be looking to hire them
4 Business process
Like the Oatly case above, a strong and aligned brand will make your marketing so much easier. Can you quantify the money you save? Only 26% of companies have guidelines that are easy for their staff to follow. How much time and energy are teams wasting? How far off-brand is the content are they creating. An improved brand makes it easier to negotiate with suppliers and partners. Brands with the highest values even get paid rent to be in shopping malls. Imagine negotiating with a landlord how much they will pay YOU!
When you consider that half of your marketing budget is going to the middle men, you and your team had better be truly behind what you’re selling. What ever the reason above to take on a branding project, first decide the framework in which you are going to use to judge the value you will receive, calculate what that might be worth to you, then you’re better set up to know how much to spend, and the kind or returns it will bring.
Full disclosure. I may be biased! I have been excited about making great branding since first becoming obsessed with the colour purple (Pantone 2685C) back in 1983 (mmmm Chocolate bars).
If you’d like us to help set this up for you, or just curious to know more, reach out to us.