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  • Writer's pictureKristina Mogensen

Why Brand Identity is SO Important

Updated: Feb 20, 2023

Developing a strong brand identity for your business is an extremely important factor in its success. Effective branding can help build your reputation, make you stand out from your competition and project your values to attract your ideal client.

1. Increases Brand Recognition

Oh, I know that brand!

Brand recognition is how well your target audience, and potential customers, can

recall your company’s brand and identify your products. It’s an indicator of how well your audience differentiates your product from those of competitors. Take Starbucks, for example. Even if you don’t drink their coffee, you probably recognize

their brand. Their café has a glass case for sandwiches and cake pops, with an open bottom for expensive bottled water and apple juice boxes for kids. The café interior is a bit dark and dramatic. The logo on their coffee cup is some sort of white and green woman in a circle. All to say, you wouldn’t walk into a Starbucks and mistake it for any other café.

2. Improves Customer Loyalty to Your Brand

I like everything they do.

Loyal customers generally spend more money on your product. Research shows that 57% of customers spend more money on brands they’re loyal to. Loyal customers tend to be repeat customers, too. They look forward to your next product release and follow you for product and company updates.

Customer loyalty is the natural effect of a continuously positive emotional experience, satisfaction with your products, and the perceived value of a strong brand. It’s based on an individual’s personal experience with a company. Loyal customers generally perceive your product as being better than that of any other brand. Both Apple and Microsoft have a large following, and both companies’ customers perceive their respective favorite brands as being better than the other. Neither is right or wrong – it’s how they perceive the brands that really matters.

A strong brand with a loyal following is one that builds a consistently positive customer experience. Of the customers surveyed who had a “very good” experience with a brand, 94% are more likely to purchase again; and of the customers who had a “good” experience, 83% are more likely to purchase again. A “good experience” means that the customer was happy overall with the service and product.

3. Positive Word of Mouth Marketing

Did you hear about this? It’s amazing.

When your brand tells a story that people want to hear, they’ll repeat it to friends, family, and strangers at the bus stop. They’re your brand ambassadors. Word-of-mouth advertising is social proof that your brand is credible. According to Sprout Social, word-of-mouth advertising “can improve the overall impact of your marketing campaigns by up to 54%.”

Strong brands with effective word-of-mouth advertising produce high-quality products that back up any promises they claim. For example, LL Bean promises durable outdoor clothing. But it doesn't just say it has durable clothing – its products back up those claims, which we can see in product reviews on the website and social media, as well as in LL Bean's loyal repeat customers.

When you have high-quality products that other people have tried and liked or used successfully, your happy customers will share that with everyone they know.

5. Lower Price Sensitivity

I need this, no matter what.”

Price sensitivity is a term that describes how heavily the cost of your product weighs on your target market’s willingness to buy it. The less it weighs on their decision, the better; it means they like your brand well enough to give less weight to price. Customers with lower price sensitivity have most likely been satisfied with a product they've bought from you or have a positive emotional connection to your brand.

The power of a strong brand gives you the ability to raise prices. Why? Because you’ve become great at what you do. It’s not something that you can change overnight, but over time you can build a loyal following to your brand and lower price sensitivity.


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