Why does brand building matter for business?

Leaders need to make clear choices about where to invest time and money. Brand building raises the same question as any other investment: how does this help the business?

Research shows a connection between brand strength, how many customers choose a company and what they are willing to pay. Building a brand can therefore help a business grow and improve its profitability. (Kantar)

More reasons to be chosen

Why would a customer choose our company? It is a simple question at the heart of growth. Kantar’s Blueprint for Brand Growth draws on 6.5 billion data points about what consumers think and buy. Its analysis found that brands that stand out in ways people find meaningful reach up to five times the share of buyers in their category compared with brands that perform poorly on this measure. (Kantar)

For us, this points to an important task: understanding what customers value and making it clear how the company delivers that value. What do we want to be known for, and why should it matter to our customers?

A stronger starting point for sales

Research conducted with Bain & Company and presented in LinkedIn’s B2B Institute report found that being known and familiar to the people making a purchase decision strongly predicts which brand they choose. (LinkedIn B2B Institute) This gives brand building a clear role in supporting future sales. The aim is for customers to know something about the company and its expertise before the first sales conversation. We can start building that familiarity well before they are ready to buy.

Stronger pricing power

Growth matters, but so does how much the business earns from each sale. According to Kantar, brands with stronger pricing power lose less sales volume when they raise prices. When customers see a brand as different, they are less likely to view competitors as direct replacements. This makes them less sensitive to price and helps protect margins. (Kantar) The starting point is the value customers see in the offering. What makes it worth its price, and how do customers experience that value?

A stronger position in difficult times

Kantar’s BrandZ comparison found that stock portfolios made up of strong brands fell less than the wider stock market during the financial crisis and the pandemic, and recovered faster. (Kantar) This does not tell us how much of the difference was due to brand strength alone. It does, however, offer a useful perspective on the long-term value of brands in uncertain times.

What does this mean for leadership?

At Areto, we believe brand building should start with what the business needs. More customers? A stronger place in buyers’ minds? Clearer reasons for customers to pay the asking price?

Leaders need to connect the brand’s direction with business goals and help people across the organisation understand their part in building it. 

The brand is therefore a shared responsibility across the whole organisation. Everyone needs to understand what the shared direction means for their team’s decisions and daily work. That is what we mean by putting brand at the heart of business: when leaders take responsibility for the brand, it becomes something the whole organisation builds together, so the customer’s experience of the brand meets their expectations.