In many instances, we tend to think that customers make purchases from a company solely based on its reputation and positive image. Nevertheless, in today’s era, where marketing strongly influences our daily choices, we often overlook the fact that our purchasing habits are actually influenced by brands, their storytelling proficiency, and the extent to which those narratives resonate with us.
Jonah Sachs, a renowned American storyteller, author, and entrepreneur, highlights the clear benefits of both co-branding and branding with his inspiring words.
All customer touchpoints contribute to the unfolding story of your brand.
A customer could desire to interact with your brand through a physical visit to a store, remain captivated when they come across your brand advertisement on TV, or even hum along to your brand’s jingle whenever it plays as a YouTube ad.
While these signs are indicative of the advantages of branding, it is important to acknowledge that nature has always enabled us to benefit from each other through mutualistic symbiosis. This concept has also been incorporated into the marketing field in the modern era.
Branding
The process of establishing a brand identity for a company is known as branding. This involves developing a brand personality and producing elements like the logo, tagline, visual design, messaging, and tone guides.
Gain valuable insights on creating and managing a brand that effectively establishes a strong presence, garners affection, and captures the attention of your desired audience by exploring the resource provided.
Co-branding
Co-branding occurs when two businesses collaborate in a partnership where the success of one company positively impacts the other. By combining their products or expertise, these companies enhance the value of their offerings for their target audiences.
More than 20% of total company revenue is driven by partnerships, according to 54% of companies.
When two similar companies collaborate in a co-branding partnership, it is most effective because the audience benefits from their association and gains distinctive value. An instance of co-branding that you might already be acquainted with is the collaboration between a sports company and an athlete.
Creating a Robust Brand Funnel
Brand and marketing managers commonly rely on a combination of data analytics and creative insights to strategically promote their products and services. Despite the misconception that monitoring brand performance is challenging, brand managers frequently experiment with the aforementioned techniques and employ trial-and-error methods in order to achieve success.
Nevertheless, creating a “brand funnel” offers a clear understanding of the benefits brought by branding, as this conceptual model depicts the consumer-oriented path leading to desired brand loyalty.
The essential elements of an infallible ‘brand funnel’ consist of:
- Brand awareness: Introducing the brand to its target audience
- Brand consideration: Coaxing and cajoling the conscious customers to consider using the brand
- Brand preference: Influencing the consumers to choose the brand over its competitors
- Brand usage: It usually pertains to the data; how many people are using the brand, their satisfaction, feedback, and usage patterns
- Brand advocacy: If all the above parts of the funnel operate like clockwork, the customers will definitely advocate the brand over its market competitors.
Multiple Benefits of Branding and Co-branding
Branding’s evident advantages allow their distinctive offerings to distinguish themselves in a market that is already flooded, establishing trust and encouraging consumer engagement. Ultimately, the aim of branding is to foster customer loyalty and retention by conveying a sense of value and seamless enhancement in their lives.
1. Influences customer purchase decisions
As per a marketing survey conducted by HubSpot, a significant majority of consumers, approximately 89%, admitted that they are inclined to buy products or access services from brands they are familiar with, have had a positive previous experience with, and would choose over other competing brands.
2. Portrays a brand story and identity
Branding plays a crucial role in establishing a connection with people, as it goes beyond the products or services offered by a brand. By creating a brand mission that aligns with a specific sector, such as community development, it resonates with individuals who share a belief in the brand. This powerful method of storytelling significantly influences customer retention in a lasting manner.
3. Creates a business that is instantly recognizable to its target audience
Creating a robust branding strategy has the advantage of establishing a business that is easily recognizable to its target audience. Even when customers encounter mentions of your brand through unconventional means, they will still instantly connect with your brand due to the lasting impression of the distinctive content you produce.
Therefore, the brand in question is able to allocate greater resources towards product promotion and marketing instead of focusing on establishing brand awareness, considering that consumers have already formed a personal connection with the brand.
Air Jordan sports shoes possess such a strong association with the legendary personality of Michael Jordan that there is no need to generate brand awareness. This association alone is credible enough for consumers to have an exceptional experience. Rather than focusing on creating awareness, the brand can concentrate on developing more captivating products and introducing them to the market.
4. Helps the business stand out
As the number of businesses boasting about having the top products in their field increases, it becomes challenging to differentiate the excellent ones from the average ones. However, a strong branding strategy distinguishes a business from its customers, even amidst a saturated market.
Consider Coca-Cola. There is no need to assess its rivals in the drinks industry as this age-old brand has dedicated itself for years to establish a strong presence with its unique flavor, appearance, color scheme, and brand identity! This represents one of the remarkable advantages of branding.
5. Creates consistency and invigorates marketing efforts
While many brands nowadays claim to excel in marketing, it ultimately has little effect over time. Even if there is an initial excitement and surge in website visitors, if customers do not find the desired value in terms of products or services, their interest will not be sustained.
Rather than focusing on other advantages, branding emphasizes the creation of a ‘fat brand funnel,’ ensuring that customers receive the products and services they desire at every stage. A consistent branding approach energizes the company’s marketing endeavors and enables the development of various immersive experiences, allowing customers to continually derive value and remain loyal to the brand indefinitely.
6. Sharing the intrinsic values of the company
Adidas’s vision of sharing its inherent brand value is clearly demonstrated in the aforementioned example, where they brought together a duo of footballing experts. Their products are not only favored by skilled players, but they also bring an unparalleled level of style and sophistication.
Customers are convinced of the brand’s worth through co-branding initiatives. A HubSpot marketing survey reveals that such initiatives are even effective in encouraging customers to exceed their initial budget by 31% to 50% due to the belief that they are purchasing an experience rather than just a product.
7. Introducing new products to market
Nike joined forces with Apple in 2016 to release the Apple Watch Nike+.
As per Jeff Williams, the former CEO of Apple, this groundbreaking partnership was the result of combining sports tracking with Apple’s cutting-edge attributes, such as a top-of-the-line processor, GPS, water-resistant capabilities, and other advanced features. This collaboration aimed to benefit a wide range of sports enthusiasts and athletes who are committed to elevating their performance.
Therefore, co-branding can assist brands in forming strategic alliances, diversifying their expenses, generating more sources of income, and accessing previously unexplored target markets.
8. Inspires customer loyalty and retention
Trust is enhanced by branding, and customer loyalty is built on trust. Customers are drawn to your identity as it reflects your values and builds a sense of connection. This connection fosters customer loyalty.
As a result, loyal customers play a crucial role in boosting revenue as they have a higher tendency to make repeat purchases and attract new clients to your business.
9. Encourages word-of-mouth marketing
Customers are more likely to remain loyal and engage in word-of-mouth marketing when the branding is consistent.
Consider these statistics, as they highlight the significant advantages of word-of-mouth marketing for businesses. This form of marketing entails consumers advocating for a brand or product to their acquaintances, relatives, and even online strangers. The reason behind its effectiveness lies in the fact that people place greater trust in fellow consumers compared to marketers, as they perceive the latter to have hidden motives.
- 39% of consumers build trust in a brand from peer-to-peer conversations compared to 23% from a brand’s paid ads.
- Consumers report that a person like themselves (another consumer) is 14% more credible than a brand employee.
By establishing a base of devoted customers, your business receives free promotion from them, attracting new clients and driving up revenue.
10. Helps you share your values
Maintaining the same meaning: Having a consistent message to share is crucial as customers are increasingly drawn to companies that align with their values. Interestingly, if customers perceive that a company is making a positive difference in the world, they are willing to pay a premium of 31% to 50% for its products and services.
Branding is crucial in capturing the attention of these modern consumers, as it goes beyond a mere logo recognition, allowing you to effectively convey your brand’s mission and values.
11. Builds internal employee morale and pride
Employer branding not only affects external perceptions but also has an influence on internal factors such as employee retention, morale, and hiring processes. Take into account the following statistics from LinkedIn Business, which highlight the positive effects of strong employer branding on both recruitment and retention.
- Well-regarded brands can bring down training expenses by as much as 50%.
- 72% of recruiting leaders worldwide say that the employer brand significantly impacts hiring.
- 50% of employers report more qualified applicants.
- Strong branding is associated with a 28% reduction in organizational turnover.
- Inconsistent branding has been found to embarrass employees and lower morale.
According to the statistics, branding aids in establishing a credible image, instilling a sense of significance and authenticity among employees. By being associated with your brand and business, they take pride in their representation and strive to consistently meet customer satisfaction.
12. High ROI and increased profits
Investing in branding is a sensible decision, as it contributes to achieving high return on investment and helps maintain a profitable business. Profits are crucial as they enable continuous innovation and the provision of desired and expected delightful experiences to customers.
Regardless of their size or maturity, all businesses can reap the benefits mentioned earlier. Moreover, co-branding can lead to extra advantages, which we will delve into below.
13. Co-branding is exciting for consumers
Consumers find it exciting when two businesses collaborate, as they did not anticipate such a partnership and are eager to see what it will bring.
Due to its rarity, co-branding generates interest and heightened attention. On launch days, customers may eagerly refresh your social media feeds or browse your websites, filled with anticipation for what lies ahead.
14. Brings exposure to new audiences
Even though you may be working in the same field, it is probable that you and your partner focus on distinct audience segments.
Collaborating on a co-branding campaign allows you to expose your brand to their audience, while they also gain exposure to yours. This mutual exposure aids in heightening brand awareness, attracting fresh clientele, and expanding your overall influence.
15. Co-branding helps you generate trust with new audiences
When you are advertising independently and venturing into unfamiliar markets, it is essential to establish trust with your target audience. Nonetheless, the advantage of co-branding lies in having your partners endorse your credibility.
Your new audiences might not have complete trust in you, however, the trust that shoppers have in your partner will be passed on to you. Essentially, your partners assure their audience that they can trust you based on the fact that a beloved brand has trust in you.
16. Co-branding is cost-effective
Both brands commit to sharing resources and investing in advertising efforts when collaborating. As a result, working together allows for cost savings and allows for a higher advertising spend compared to what each brand would have individually.
If you and your partners come to an agreement to divide the expenses for advertisements, you can utilize twice the amount of money to obtain resources for developing your campaigns. This collaboration can be advantageous for small brands, as it allows them to explore new avenues that they would not be able to pursue on their own.
