4 Key Reasons Why Branding is Important

You know that branding is the key to any company, whether they sell coffee or industrial parts or clothing. But convincing your organization or clients that branding is necessary for all components of their business to succeed can be a bit more difficult than deciding exactly what colors best represent their brand mission.

How would you explain the process of branding to your clients? If you’re not sure how you’d break down your approach, you may be doing it wrong.
Brand Strategy

Dave Holston, author of The Strategic Designer, will walk you through the brand development process from conducting research to developing brand values to communicating it all through your designs in his Brand Strategy Course. Here, he shares 4 reasons why companies brand:

  1. Branding provides a competitive advantage
    Whether you’re a non-profit or a for-profit, your organization needs to compete for resources, funding and talent, and audience attention. To win your category, organizations plan and implement strategy—a roadmap that outlines specific actions and measures for reaching their goals and out maneuvering their peers for needed resources. When done correctly the organization’s brand mirrors their strategic plan, and helps promote strategic areas and initiatives that will move the organization forward.
  2. Brands provide a stable asset
    Products might fail, companies are bought and sold, technologies change on a daily basis, but strong brands carry on through all these changes. Brands are the most sustainable asset of any organization, and when aligned with the overall strategy of the organization they can function as the central organizing principle for the organization’s decision making. Consider that the Coca-Cola brand has been around for more than 120 years, while most of the world’s other valued brands have existed for just 50 years, and most corporations only last 25 years.
  3. Brands provide economic value
    The value of organizations is divided into two areas: intangible and tangible assets—brands being intangible assets. A study of organizations in the S&P 500 index showed that over a 30-year period between 1975 and 2003 the overall corporate value of intangible assets increased from 17% to 80%. The magazine Businessweek has concluded that brands account for more than one-third of shareholder value. This leaves us with the conclusion that the value of most businesses comes from intangible assets, brands being the most prominent of these assets.


    Consider that the Coca-Cola brand name alone is worth $67million and accounts for over 54% of the stock market value of the organization. Or consider the value of brand to a non-profit like the Red Cross and the importance of their brand in attracting donations and volunteers. Because of their financial impact, brands are a unique organizational asset. Brands play a key role in attracting employees, partners and most importantly audiences to an organization. Brands help cut through the clutter of the marketplace, creating awareness for organizations and helping them attract and develop the mutually beneficial relationships with customers, suppliers and the public that they need to reach their goals.

  4. Brands set expectations
    We live in a world based on promises. The airline mechanic promises to do a thorough job, checking and rechecking the aircraft to make sure it’s safe. Restaurants promise to provide fresh food made in clean environments. Our teachers promise to educate and protect our children during the school day. Often there are legal repercussions that bind people to fulfill these promises, but more often than not promises and vows are maintained based on the individual’s own moral and ethical code. We have an unspoken contract with the people we live and work with, that they will do what they say they’ll do. We have similar agreements with companies, products and services.

At the heart of branding is the promise that is made by the organization to the audience. The brand promise tells the audiences who you are, what you believe in, and what unique value you provide. The ability to fulfill your promises at every stage of the relationship is the defining factor for most organizations success or failure. When promises are broken the reputation of the organization is called into question, and the brand suffers. When brand promises are kept, audiences respond with loyalty and affection.

We encounter brand promises on a daily basis. The simple act of getting a soda out of a vending machine is an exercise in brand promise. The vending machine offers many drink options to choose from, but more than likely our drink selection will be based on prior experiences with a specific product. We have an expectation of an experience when we make our selection, much of which has been established through the decision-making steps of awareness, interest, desire, and satisfaction.

Interestingly, the things that influence our decision-making process have little to do with the product or service. Much of our experience with a product or service is created through the associations that we’ve made with the product through advertising, brand identity and the environment in which the product is experienced.

Brand Strategy DevelopmentTo learn more about brand strategy, checkout Dave’s course on HOWUBrand Strategy Development.