Top 5 Reasons for Growing Brand Value

A brand is an extremely valuable business asset, and developing your brand will ensure the success of your company. In later blogs I will outline how best to align your business and brand strategy together. But for starters, here’s why every business needs to invest in its brand.


These reasons are the same for both product and service companies, as well as for big and small companies. Once you understand the “why” of brand development and “operationalized” branding, you will undoubtedly make the commitment to grow your business’s brand value!


 1. Increased Profitability

Commanding a premium price is a perceived value directly linked to the brand name, the company behind the brand, and the employees who deliver the brand. And isn’t that the goal of every company—to be lifted out of a commodity market and to command a premium price? In fact, even in the current economic landscape, nearly every luxury brand increased its brand value in 2012.


Business majors learned in Marketing 101 about supply and demand and the ability for a company to charge a premium price to deliver a good or a service. Some great examples of this are:

  • Tiffany is a world-renown jeweler, and people will pay more for its famed blue box, even though what’s inside may not be much different than a lot of other jewelry, china or fine crystal.
  • It’s the same with choosing the Ritz-Carlton over a Marriott. Sure, both are fine hotels, but people will pay more to stay at the Ritz.
  • Wine enthusiasts may happily pay $400 for a premium-priced bottle of Petrus, whereas a novice might scoff at the price.
  • And millions get coffee at Starbuck’s at $5 a pop rather than at Dunkin Donuts or McDonald’s for less than a dollar. Coffee is coffee is coffee…or is it? Well, it’s certainly highly profitable for Starbuck’s.


Needless to say, high-end consumers will pay more for a product they value and believe in. To get there, a brand must have a clearly defined distinction for a clearly defined audience. Customers need a clear and compelling reason to do business with your company, with a solid value proposition. So, folks, time and money spent in brand development makes sense—and BIG dollars.


2.  Increased Customer Loyalty

There’s an old adage: It costs more to acquire a first-time customer than to keep him. Customer loyalty costs much less in the long term. In fact, for most companies, it takes seven to 10 times the cost and effort to gain a new customer as it does to keep an existing one. Knowing this, what business wouldn’t want to spend time and resources on retention and growing a loyal customer base?


Plus, developing your brand will make your customers more accepting of other products or services offered by the brand. After all, the great majority of consumers prefer to choose a branded product. In fact, one study showed that more than 50 percent of customers are willing to pay a 25% premium to a brand they are loyal to before they will switch to a competitor. Wow!


Every time you walk into a supermarket, you show your brand loyalty. You likely have preferences for favorite products and brands. For example:

  • Kellogg’s cereal costs more than store-brand cereal, yet most people still choose the top national brand.
  • Charmin is able to charge more for its toilet paper because people trust its quality and are willing pay a premium price.
  • Coca-Cola is a recognized brand known more for the way it makes people feel and the way it reinforces consumers’ deep connections to the brand.



You want your customers to have less consideration of other brands…to request your brand by name…and to recommend your business to friends and colleagues. And that doesn’t cost you a dime! It’s all about perceived value, and we do it all the time. Most folks are brand loyal at heart. It’s just one less decision for us to make.


3.  Making the Competition Irrelevant

Sometimes, a company has no other player in its market or no competition in its price-range. But let’s face it, that scenario is rare. For every brand giant like the Ritz-Carlton that has a clearly communicated brand distinction, there are thousands of other companies that worry about competition every day. Brand development is the solution.


Brand development will differentiate your business from its competitors, as well as reduce your vulnerability to that competition. Plus, you are attracting people who care about what you offer, who are buying into what you sell, and who are not talking to your competition. When you can clearly define who you are and what you do differently and, in turn, dedicate time and effort to that end…you are ultimately making the competition irrelevant for your audience. Ain’t that something?


4.  Attract and Retain the Best Employees

Winners attract winners. Who doesn’t want to work for the best companies? Or the best brand? The best employees are attracted to the best organizations, and the best companies value their people. It’s no secret that an employee comparing an offer from another company will look at more than just his salary—he will look at all aspects of his company. If you take care of your employees, they will surely remain loyal to you.
It costs money—and energy—to hire and train new employees. And even then, they won’t have the tribal knowledge of a seasoned employee. Retaining employees really benefits your business.


Strong brands are a magnet for recruiting the best employees and retaining them, while also driving high levels of employee pride. Imagine…engaged employees who are brand zealots for your organization and who are delivering your brand promise every time they come in contact with your audience!


5.  Here’s the Big Payoff…Your Exit Strategy

Every business, no matter the product or the size, can be more than just brick and mortar. Brand value is the intangible value reflected in a company’s balance sheet. Just look at these brand giants’ value, over and above the value of the business:

  • Coca-Cola’s is $77 billion
  • Apple is $76 billion
  • IBM at $75 billion is close behind


Most CEOs hope to sell their company one day. Yet, too often CEOs don’t think about how much impact a company’s brand can have on the R.O.I. and, therefore, don’t purposefully manage and grow their brand value. In other words, too many CEOs don’t have brand value as a component of their exit strategy. Too often so busy with the day-to-day pressures of leading a company, they simply haven’t thoughtfully considered the impact of brand value and its impact to the bottom line.


So, if a CEO has invested wisely in his company’s brand and has also strategically guided his brand all along, it will be worth far more when it’s time to sell. In fact, it will command a premium price. Whether you are a small, mid-size or large business, how about adding another 33% or so on top of revenue and inventory? How about 10%? What would that do to the R.O.I. for your business? As you can see from the numbers, growing your brand value is can yield a gigantic payoff.