Unlike big corporations, most small and mid-sized businesses do not see value in investing in building a recognizable, trusted and loved brand. Some argue that they do not have the money to build and grow a brand, while others simply lack the clarity and perspective to see the big picture and take a long term view of their business.
The purpose of this article is twofold. It will dispel the myth that it requires a huge budget to build a brand. It will also bring much-needed clarity and perspective to those who do not see the transformative power of building a brand for their business.
You can build a brand on a shoestring budget
To build a great brand, you need to first embark on a journey of self inquiry to uncover your brand’s purpose, values, distinctiveness, and vision. If you can clearly articulate these four things, you are well set up to build an amazing brand. And it costs nothing to do.
Next, you want to be able to communicate those ideas and ideals in a way that is not only meaningful to your audience but also memorable. Here you have to create look and feel (logos, colors, fonts, and moods), as well as a voice and tone with compelling messages (tagline, brand story, and other promotional messages). This costs some money. But in a world with tools like Canva and access to amazing freelancers from anywhere in the world, the reality is, you can bootstrap.
Finally, you have to broadcast your brand. Promotion is probably the most costly part of this process. But even here, the internet, social media, and micro-influencers have completely changed the game. You can reach a very large audience on a relatively small budget.
Ok, fine, it’s cheap, you say, but why does it matter?
Four benefits of investing time and money in branding
For those who lack the clarity and perspective to see the real power of branding, here are four reasons why big corporations spend billions of dollars on their brand.
1. Pricing Advantage
In a market where all the options are indistinguishable, customers will naturally choose the cheapest one. And although this seems like an extreme case, that’s fundamentally what’s happening when companies compete on price. They recognize that they have nothing that sets them apart and can only therefore compete by lowering their prices. Building a brand helps set yourself apart from your competition, and therefore puts you in a position to be able to charge more– the way Apple or Starbucks can command significantly higher prices for, more or less, the same products.
2. Sales Advantage
At any given time, only about 3-5% of the people you’re talking to are ready to buy now. That’s why car companies run promotions all year round to make sure to capture those who are ready to buy now. But those car companies also recognize that the biggest portion of their prospective customers are not currently in the market to buy a car. So, they spend billions of dollars in advertising to create brand awareness because no one buys a brand they can’t recall or, worse, never heard of. The goal is to be top of mind when those who are not ready to buy today are shopping for a car in the future. Customers usually only remember about three brands when the moment comes to buy.
3. Customer Retention
People prefer to buy known brands because they are safe. Familiarity and popularity breed trust and loyalty. But brands are also safe because you know exactly what you get every time you do business with one. And there’s something comforting about having that level of certainty. Brands like McDonalds or even your most consistent mom and pop achieve this level of consistency because they operate on specific standards, systems, and values that are the fabric of their brand. It’s impossible to deliver the same high-quality product and customer service when you rely too heavily on the merit of each employee. Instead, you should rely on your systems and the strength of your brand to shape the attitudes and inform the behaviors of employees.
4. Employee retention
As the pressure continues to mount for corporations to raise their wages, it will become even more difficult for small businesses to compete on the basis of compensation. It is more important than ever to build a brand that will help you create the kind of work culture that makes people want to work for you, and stay, even if you offer them slightly less money than they could earn elsewhere. People are looking for companies that treat them with more respect and empathy, and whose values align with theirs. So investing in building a brand could be your greatest competitive advantage.
While there’s no denying that brands like Nike, Apple and Starbucks rose to iconic status, in large part, thanks to the power of their advertising dollars, those great brands are built on a foundation that cost nothing more than time and the willingness to embark on a journey of discovery.