What’s the Benefit of Branding Anyway?

The main benefit of a properly devised and implemented branding effort is that it creates and cements customer loyalty and retention. These days, customer satisfaction is simply not enough. To quote W. Edwards Deming, “…it will not suffice to have customers that are merely satisfied. Satisfied customers switch, for no good reason, just to try something else. Profit and growth come from customers that can boast about product or service-the loyal customer. He requires no advertising or other persuasion, and brings friend along with him.” Or, branding + loyalty = profits.

Branding allows a company to differentiate themselves from the competition and, in the process, to bond with their customers to create loyalty. So a position is created in the marketplace that is much more difficult for the competition to poach. A satisfied customer may leave. But a loyal one is much less likely to.

When branding, it is also important to make sure the bond created is truly between brand and customer; not between brand deals and customers. Branding and relationship marketing help ensure the right bond is created. Discounting is the antithesis of the branding process. Discounting weakens the brand, thereby weakening the bond that engenders loyalty and retention.

Much research has borne out the point that price is not as important to a brand as service and quality. Therefore, to discount is to inherently weaken the brand, and weaken a company’s market position and capitalization. For well-known and loved brands, discounting has a negative effect on the brand in the consumers’ mind.

Quality and the price of a brand are not separate concepts in the consumers mind; they are interrelated. Research has shown that deep discounts do cause the consumer to believe something is wrong. The goal of the branding process is to create a relation- ship with the consumer that also establishes a high-quality, high-value and high-price relationship. Customer loyalty is created when the brand experience and quality is consistently excellent and meets and exceeds the customer’s expectations.

When a customer identifies with a product, loyalty has grown and affinity is created. This loyalty becomes a bulwark against competitors, and the customer is an excellent candidate to enter into a relationship marketing effort. They trust and identify with the brand, and favor the brand over any other, which is the ultimate goal of the branding effort.