How Important is Branding to Revenue?

When you’re starting a new company, it’s easy to put off the branding process for a while. You’re working on getting your main product or service into the hands of as many customers as possible, and with everything else on your plate, the idea of branding often gets put to the side. It’s understandable—branding can be a nebulous concept, one that seems like it might not directly impact revenue. But does it? And should you be focusing on branding early on?

Defining Branding

Branding can be tricky to define because it is a combination of several different factors that come together to produce your company’ image. Technically, it’s a marketing term. It’s the symbols and messaging you use to communicate with your customers. Think about the logos of big brands—the NiKE (NKE) swoosh, the Starbucks (SBUX) Mermaid (who has successfully undergone changes throughout the company’s history), and even the Coca-Cola (KO) logo. We recognize these immediately, and associate them with all our impressions of the brand’s messaging and overall image. Branding is used to build trust and relationships with customers. It sets expectations for the brand’s tone, behavior, and it makes some important promises to the customer.

The Impact of Branding on Revenue

When you think about branding in terms of the trust customers will have in you and your products or services, the concept becomes immediately more valuable to your overall strategy and revenue. A study by McKinsey & Company reveals that a strong branding effort can have a big impact on the bottom line—strong brands outperformed weaker brands by 20%. There’s a reason some brands are considered stronger or more “valuable” than others! Think of Apple (AAPL)—its combination of distinctive aesthetics and consistent messaging over decades has made it one of the most valuable brands in the world.

Consistency in Branding

Branding alone won’t bring in extra revenue. When it comes to the branding process, consistency is everything. It’s jarring to the customer when something is out of sync with the brand’s past messaging and branding strategy—and it begins to erode the trust and confidence in the brand that has built up over time. Unfortunately, many businesses, especially new businesses, struggle with consistency in branding efforts. That’s because it takes effort and diligence to ensure the voice, visuals, and values all stay consistent and work together.

Socially and Environmentally Conscious Branding

Strong branding should be based on the target audience’s wants and needs. These days, many consumers want to support brands that support social and environmental causes. If that’s what your business stands for, it’s very important to include it in your branding strategy. However, it’s important not to exploit these causes for branding purposes. You have to know your audience and focus on their needs—but also be committed to your branding vision. While rebranding does happen, it’s so crucial to keep everything consistent and maintain an authentic, transparent image for your customers. Don’t jump onto the social and environmental bandwagon if you’re not ready for it!

Deciding on Core Values—and Committing

What entrepreneurs should take away from this is that it’s very important to start building branding consistency as soon as possible. Take a look at your analytics and figure out what your customers want—and what you can offer them. In order to have a positive effect on growth and revenue, a business has to have rock solid core values and commitments to its target audience. If you’re thinking about seriously investing in branding, the first step is to figure out your values. What does your company stand for? Do you want to make an industry more convenient for consumers? Give back and help children around the world? Make the best biodegradable cosmetics the world has ever seen? Whatever it is that drives your business, make it a part of your branding efforts, and commit to it. Remember, branding is a gradual process. You build trust slowly, providing your audience with consistent brand messaging over a long period of time. It can take a while to reap the rewards, but your audience will respond to this consistency with loyalty—something every new business needs to succeed.