7 Reasons Why Small Businesses Should Invest in Their Brand
Maintaining a clear brand focus combined with a touch of marketing creativity can enable small businesses to outperform even big-spending competitors.
Running a small business can be challenging. There never seem to be enough hours in a day or days in a week to complete every item on the ever-growing to-do list.
I assure you that this article won't add new tasks to your list. Instead, it might even help lighten your burden.
Your Brand Should Work for You...Not Against You
Marketing a company's products and services and attracting new customers are fundamental tasks of entrepreneurship because a business cannot thrive without a steady stream of paying customers.
However, some organizations appear to spend much less time, money, and effort promoting their products and services and still grow rapidly.
What do they do differently?
They probably benefit from having a strong brand.
Investing in your brand has significant benefits, which can result in considerable time and cost savings, as well as increased profits.
Strengthening your brand can be a highly effective strategy for the following seven reasons.
Reason #1: Increased Customer Loyalty
It is seven times more expensive to attract a new customer than to retain an existing customer.
Customers who identify with a brand tend to be more loyal and buy more often without the need for the business to spend much money on advertising.
Rewarding loyalty is an effective method for retaining customers and keeping them engaged.
One approach is to implement a formal loyalty program. These programs typically provide discounts in exchange for points that a customer accumulates as a reward for referring a friend, following the company on social media, or the value and frequency of their purchases.
Another option is to offer exclusivity. Exclusive events, content, or shopping hours can be a less expensive alternative to a formal loyalty program.
Reason #2: Positive Word-of-Mouth Marketing
Happy customers will recommend your brand to everyone they know without being asked or leave a positive review on Google, Facebook, and review sites, such as Yelp.
Companies that receive a high number of referrals spend noticeably less on advertising. Some small businesses even have a referral rate as high as 100% and don't advertise at all.
Reason #3: Higher Advertising Effectiveness
When a strong brand promotes the release of a new product, it captures the attention of its customers, sparking imagination, rumors, and curiosity about any innovative features. Think of Apple when they launch a new iPhone.
Reason #4: Less Price Sensitivity
Strong brands can charge higher prices compared to weaker brands. They can raise prices without fearing to lose many of their loyal customers, as these customers are typically less sensitive to price changes.
Marketers refer to this buying behavior as inelastic. It means that customer demand responds minimally to price increases or reductions.
That's why strong brands rarely need to offer discounts to encourage sales, ultimately improving their profitability.
Reason #5: Higher Attractiveness for Top Talent
Strong brands are an attractive place to work and can select the most suitable candidates from a larger pool of applicants.
Reason #6: Higher Employee Engagement
Employees working for strong brands often share their cause, are proud to work for them, and are more engaged, leading to better products and higher company profits.
Reason #7: Higher Company Value
Your company's value to a potential buyer is influenced by more than just financial factors like recurring revenue and overall profitability.
It is also driven by your brand equity, which refers to the monetary value of a brand and often leads to a buyer paying a premium on top of the calculated book value.
This premium can be substantial, especially for businesses with few tangible assets.
Focus on the Right Things
Many business owners believe that the level of their marketing spending determines their brand strength. That's not true. Even with small marketing budgets, it is possible to build exceptionally strong brands if you do three things well:
Coherence. Ensure your brand's purpose, values, vision, mission, promise, personality, and verbal and visual design elements closely align.
Consistency. Ensure you apply your brand's verbal and visual design elements across all communication channels without exceptions.
Authenticity. Stay true to your brand's values and do what you promised to do every time.
Brand strength doesn't result from the amount of money companies spend but from their dedication to doing the right things.
Maintaining a clear brand focus combined with a touch of marketing creativity can enable small businesses to outperform even big-spending competitors.
How Do You Stay in Contact With Your Past Customers? Keeping in touch with your past customers can be as simple as emailing them a regular newsletter with promotions, event invitations, or valuable tips. But you have several other options.
Reward Loyal Customers Without Spending Anything! Discounts are the most expensive way to thank your loyal customers. Instead, consider these 10 reward ideas that are very effective but do not cost you anything.
What Is Customer Lifetime Value (CLV) and Why Small Businesses Should Embrace It: Customer Lifetime Value (CLV) is a powerful marketing concept. Embracing it can be game-changing for small businesses.
Word-of-Mouth Marketing: Word-of-mouth marketing is a highly effective marketing strategy for acquiring new customers without spending on social media pay-per-click advertising.
When Discounting Your Products Could Cost You Money: Many businesses discount their products and services to boost sales. But do they also make more profit?
What Is Brand Equity? 5 Tips How to Grow It: Brand equity refers to the monetary value of a brand. These 5 tips will strengthen your brand and grow brand equity.
How Much Is Your Business Worth? How much money you get for your company depends on what you sell, who your buyer is, and the amount of profit your business makes annually.
