Understanding the Brand Value Equation
We work on a daily basis guiding the brands for businesses of all shapes and sizes across almost every conceivable category. The thing they all have in common is an understanding of brand value and how to leverage it to give themselves and unfair business advantage.
On the other hand our reputation attracts inquiries from literally hundreds of businesses every year who have a need to re-brand or redesign their packaging, but who fail to grasp the brand value equation. For many of these businesses, engaging a professional brand agency like Truly Deeply to do the job properly is too costly for them. But the problem is not with the cost, nor with the budget, but with the mindset that rationalized the budget in the first place.
The Challenge of Setting Budgets for Branding
Setting the right budget is made more complicated by our very own industry. When it comes to branding and packaging design, the quality of service is as broad as say the legal industry. There are cheaper suburban solicitors you might go to for a will. There are the second tier firms who are larger and offer a higher level of representation for a higher fee. And then there are the top tier firms who are specialists in their field, but are best positioned to advise you when the issue is important enough and charge accordingly. The same holds true with branding agencies. Their level of experience, specialist skill-sets and unfortunately their costs all reflect their ability to strategically impact your business through brand. As in every other aspect of professional services, with branding you get what you pay for. There’s a reason the internet is full of designers pitching their creativity for the chance to win a tiny budget; their work does not have the strategic foundation nor the creative business problem solving to justifying charging a professional rate.
The Three Sure Signs You’re Talking to a Branding Professional
01. Do they have a full time brand strategist working in the agency with experience on a range of large and challenging brands?
02. Can they show you case studies that demonstrate the value their brand work has provided to their clients? They don’t necessarily need to have worked in your category before. Give me an experienced Brand Agency over a Design Studio familiar with your category any day.
03. Are they talking Business Value? Unless they can clearly elaborate on exactly how their brand strategy and design will attract more of the right customers and allow you to build a premium margin, then they cannot be trusted to deliver on their promises.
The Solution to Budget Setting for Branding
For most organisations the business bottom line works to a simple equation; Number of Clients x Price Charged for Product or Service. There are a couple of additional kickers in play such as profit margin and client/customer retention, but at its most simple it’s about how many customers you can attract and how much you can charge them. And here’s where the brand value equation kicks-in.
If a strategically directed and professionally executed brand identity or packaging design attracts more customers AND allows you to charge a premium price for your products or services – each and every year – what would that be worth to your business? For most organisations the brand value equation adds-up to tens or hundreds of thousands of dollars each year. And this by any reasonable measure must be the starting point for rationalizing your budget for brand and packaging design.
Recently the world’s first financially quantified analysis of how brand-building activities drive growth in brand value was published. The study tracked increase in brand value over ten years and clearly demonstrate where the driver of that value comes from. The most remarkable conclusion from this study is the extent to which establishing a strong brand value proposition and brand identity (branding) drives brand value growth. You can read the complete article about this study here.
David is the founder of Truly Deeply, a brand agency with 25 years experience working with brands to position them for growth. His deep expertise is in the creation of high engagement brands that attract the attention of their audience and stand out from their competitors. David has extensive experience working with corporate, retail, food & beverage and entrepreneurial clients. Find out more at…
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