Brand Power: Why investment in brand building will reap countless benefits

I’ve been binge watching the latest series of Dragon’s Den recently.  Although on some level it’s obviously hammed up for the cameras, I just love watching the entrepreneurs pitch their ideas and get grilled by the dragons on their innovations (as well as their often over-inflated business valuations!).  

There have been some brilliant ideas in the latest series – with The Bold Beans Company and Sibstar the prepaid spending card for dementia sufferers being two of my favourites. But what I’ve noticed a little more this season is that the dragons seem increasingly focussed on the brand that sits behind these companies, when they’re deciding whether or not to invest.  

No matter how clever or different the entrepreneur’s ideas are, companies with an authentic brand story that resonates with the dragons emotionally seem consistently more likely to sway them to part with their cash (in addition to solid financial performance and projections of course!).    

But it isn’t just in securing investment that strong brands have an advantage. These more established brands also enjoy a whole host of wider benefits — which is why brand building is so fundamental to commercial success.

Put simply, well-thought out brands drive profit and create shareholder value. They add value on the balance sheet and unlock employee discretionary effort across the value chain. When everyone in a company is aligned on the ‘North Star’ of the brand, it’s hugely motivating and galvanising (I’ve conducted research with employees where this wasn’t the case, and the opposite is also true!).   

Strong brands bring intangible value to an organisation, and secure its cash flow for years to come. And strong brands also command a price premium: businesses reap the results in terms of better margin and better growth.  

In a world full of copycat products and ‘me too’ services, consumers are drawn to brands that add that little bit of excitement, pleasure and meaning to people’s lives — often in ways that consumers themselves can’t easily articulate. And of course, an impactful brand also empowers consumers to make quicker decisions by helping them battle the tyranny of choice in an oversaturated market. This last point is incredibly important from a behavioural perspective, so I’ll be discussing this in further detail in future articles.  

With this in mind, brands are under huge pressure – particularly in the cost of living crisis. In many grocery categories, shoppers are trading down to own-label equivalents. It’s a common issue facing many of our clients, who are staring down the barrel of category commodification — how can they stay in shoppers baskets when the pressure to cut costs is on? 

But brands shouldn’t give up hope! Even when facing a sales decline, there’s always an answer. In this instance, that answer is going on a long-term brand building journey to reconnect with consumers and unlock the magic of the brand, to remind people what made it so special in the first place.

Sure, this process is an investment, and there will likely be senior board members who don’t believe in — or see the value of — brand building. You may well have to outspend your competitors, and adjust your activity as they adjust theirs in response. But even flailing brands can be revived, just take the huge transformation of Baileys (which was on the cusp of being culled by Diageo) to see what can be achieved.   

In recent years, marketers have been worshipping at the altar of “performance marketing”. That usually means hyper-personalised ads and tailored messaging, designed to grab consumers in buying mode. But using these tactics to drive sales today can come at the expense of investing in your brand in the long term, and “warming up” those customers who may not be in buying mode yet, but will be in the future. 

Thanks to the work from Les Binet and Peter Field, we now know there’s a sweet spot when it comes to balancing brand building comms and sales activation (performance marketing); depending on your industry, it’s around the 60/40 mark.

Informed marketers understand this. They grasp the importance of both brand building and sales activation. They embrace the mantra “unless we water the tree, we can’t keep picking the fruit”.  

At Trinity McQueen, we believe in the power of strong brands, and the commercial necessity of brand building for long-term growth. We help businesses to reconnect with or find the ‘North Star’ of their brand, propelling sustainable commercial success.  

Got a brand challenge you’d like to discuss with us? Please get in touch.