The Financial Value of Brand Identity

It may surprise you, but there are still business owners out there who view branding as a necessary evil instead of a powerful resource, a cost instead of an asset. For those people, brand identity is a vague and suspicious concept, foisted on them by the creative industries' equivalent of the snake oil peddler.

To most of us modern entrepreneurs it's pretty clear that this is a very narrow-minded view, and one that's totally out of step with market realities. But even those who instinctively understand the value of effective branding may have trouble rationalising the initial design and development costs during the early stages of a startup venture. Usually the link between brand identity and the bottom line isn't readily apparent, but it is there. Here are three examples.


Repeat Business

To understand how effective branding generates repeat business, you first have to accept that brand identity is more than just a logo - a point that I really can't stress enough. Brand identity is no more a logo than you are a t-shirt. You probably communicate something about your personality through the design that's printed on the clothes you wear, but it's your personality, not the design, that makes people want to keep socialising with you.

Similarly, a logo is an effective visual shorthand for telling consumers what kind of business you run, but it's far from the whole story. The decor of your premises, the style of language you use in your newsletter, the unique customer experiences you create - all these things and more define your brand identity. When implemented effectively and consistently, brand identity promotes customer engagement, and it's this engagement that keeps them coming back to buy from you again and again.


Customer Recommendations

The term 'going viral' is almost exclusively associated with social media and the digital sphere (and deadly worldwide pandemics), but ideas are also viral. Think of your brand identity as an idea - a concept that describes your unique positioning, customer service and value proposition. If you can promote your unique brand identity via word of mouth virality, you'll reach more potential customers, generate more leads, and increase your turnover.

The key to maximising this effect lies in the quality of your brand identity, the appeal of the idea. Good brands, like good ideas, are more likely to be shared, because they confer credibility and social capital on the people doing the sharing. Customers won't go out of their way to publicly associate themselves with a shoddy brand, no matter how great the product itself might be, but customers will go out of their way to bask in the reflected glory of a strong brand. Just look at the runaway financial success that Apple has enjoyed thanks to its fanatical community of brand evangelists. That didn't happen by accident - Apple have carefully cultivated a clear brand identity, and now they're reaping the social - and financial - rewards.


Price Point

Cornflakes are cornflakes. Regardless of which brand you buy, you're eating more or less the same thing. In many cases you're literally eating exactly the same thing, because multiple brands source their cornflakes from the same supplier. The only difference is the brand - the name and the design on the box. So why don't they all cost the same?

The reason is that an effective brand adds genuine value. It adds value for the consumer, who sees the brand as a mark of quality, credibility and trust. That consumer value translates into real financial value, which allows the brand owner to command a higher price. That's why Kellogs, with its immediately recognisable cockerel brand mark, costs more than the ugly and forgettable own-brand offering. Put simply, a strong brand persuades consumers to pay a higher price regardless of the merits of the product.



If you started reading this article with any doubts about the tangible impact that brand identity has on revenue, I hope they're now firmly banished. Effective branding promotes repeat business, drives recommendations, and allows you to set a higher price. No business, whether it's a multinational behemoth or an energetic startup, can afford to ignore the financial value of strong brand identity.



If you're starting a business and appreciate the value of effective brand identity, explore the Brandsworth website and discover the affordable branding agency for startups in Wales.