Understanding Why Brands Are Important Selecting Transcript

Understanding Why Brands Are Importantselecting Transcript Lines In Th

Understanding why brands are important Selecting transcript lines in this section will navigate to timestamp in the video - Why are brands important? Let's take a look at one of the best brands in the world, Coca Cola. The total market value of the company is around $175 billion, but one asset in particular makes up about $75 billion of that, and it's not the secret recipe. It's the brand. Brands are both a strategic as well as a financial asset.

A strong brand creates customer loyalty, and that increases the value of your company, value which can grow if you continue to invest in the brand. There are many other benefits of brands. Brands allow you to set higher prices for your products and services. People associate higher quality to branded products, and they'll pay more than for a generic version, even when the two products are identical. Why? Because they trust the branded product more. Brands make and keep their promises. Once your product is branded, you typically earn a higher market share while lowering your cost of sales. Loyal customers don't need to be marketed to as much. With an established brand, it's easier to launch new products. When consumers see the brand's logo on a new product, they instantly associate the brand promise to that new product from day one.

There are other benefits of brands than just the marketing advantages. For example, studies show that companies with great brands have lower employee turnover. Popular brands help companies recruit the most talented and passionate employees. Brands create status and esteem for your company in the minds of industry leaders, community leaders, the media, and financial markets like Wall Street.

But despite all these benefits, it may not make sense for you to create a brand. There are certain business situations where it would be a waste of money. For example, in completely new markets where there are very few, if any, customers, you'd be smarter to invest your resources in growing awareness and interest in the category first. If you're already the market leader with most of the market share, creating a brand probably won't pay off. If you're in a highly fragmented industry, with hundreds or even thousands of small competitors, a brand may not be able to reach enough customers to make it worthwhile. If your business is such that you have only a handful of customers, perhaps even one customer like the government, branding won't do much. Take a look at your situation before you jump right into it. But if your business depends on creating loyal, repeat customers, a strong brand is the surest way to do it.

What is a brand? Selecting transcript lines in this section will navigate to timestamp in the video - Are you a trustworthy person? Who says so? Okay, so you have friends and colleagues that say you're trustworthy, but why do these people say so? I'm willing to bet it's because you told them you were going to do something, and you did, over and over. You made, and kept, your promises. And because of that, you now have a brand reputation as someone people can count on.

You may not have realized it, but you've understood the basics of branding all along. Simply put, a brand is a promise. It's a promise you make to consumers when they do business with you. Now that definition may surprise you because most people think of a brand as a logo or a product's name. It's neither.

Let's do an experiment. I'm going to show you just two lines on the screen, and when you see them, I want you to say the first word that comes to mind. Ready? Now if you're like most people, these two curved lines reminded you of the golden arches of McDonald's. Even people who don't go to McDonald's will instantly associate this logo with the company.

How can just two hand-drawn lines, that aren't even the right color, by the way, cause you to recall a global billion-dollar fast food chain? Let's take the experiment one more step. Close your eyes and think about a McDonald's restaurant. Can you just taste those marvelous french fries? Can you see a Big Mac and other food items? Do you sense what's going on inside the restaurant, with all the families, the parents playing with their kids, enjoying the time together? This is McDonald's brand promise, those emotional feelings and cravings that are triggered when you think about McDonald's. The brand logo and the brand name are not the brand itself. Rather, they are the visual cues to trigger that locus of emotions that the brand promises you.

Let me share with you Four Keys to Building Successful Brands. First, your brand must be authentic, in that it's truly tied to who you are as a company, meaning your values and core purpose. If these aren't tightly linked, your promise is less believable. Your brand must be relevant, meaning that it promises something that's important to consumers, and that they perceive your brand delivering that promise better than the competition. You must keep your brand promise consistent across every touchpoint you have with your customers. Why do people see you as trustworthy? Because you're consistent. It's the same for brands. If you lack consistency, you won't build true loyalty. And finally, you and your organization must have a total commitment to keeping the brand promise. Your leadership and all of your employees, the ones who deliver your brand experience to consumers, must live the brand, support it, and continue to invest in it.

If you're working to create a brand, start by thinking of the brand promise. What experience do you want your customers to have when they encounter your brand? As you think about the brands you currently work with, ask yourself, is the promise you're making the right one? Because once you make a promise, you gotta keep it.