20 Oct WHEN IS BRANDING MORE IMPORTANT THAN REVENUE?
We’ve all been there. A big order has come in, a new project kicks off, a new product is flying off the shelf faster than you can make it. All-nighters, extra shifts, working through the weekend, adding new staff and finding more office space end up occupying every working moment. Business is coming in faster than you know what to do with it. As a result, your long-term branding efforts get put on the back burner while you enjoy short-term revenue success.
But happy days don’t last forever. Eventually, the roller coaster ends, be it from a lost client, a finished project, a mature market for your product or an economic downturn. And the weeks, months or even years you spent ignoring your brand leave you unprepared to pivot. In addition to lost revenue, you’ve lost the brand equity needed to capture new revenue.
If revenue is the lifeblood of business, branding is the lifeblood of revenue. The purpose of branding is to align your company with your customers, to foster customer loyalty, and to create a name that sells itself. Your marketing drives sales over the next quarter. Your brand drives sales for years or, in the case of some companies, even generations. Marketing makes one sale to one customer today. Branding inspires that one customer to recommend your product to her friends, leave a review, share your content, and be a future customer without requiring further outreach.
Don’t let a bad quarter be bad for your brand. History is filled with companies chasing short-term revenue while sacrificing their long-term brand. New Coke chased after younger customers with a sweeter recipe and chased off everyone who loved the original, 100-year-old recipe in the process. Netflix separated its streaming movies and DVDs into two different services and bills, betraying its promise of making movie rentals easy. GM, once known as a car company with brands like Saturn, Pontiac, Cadillac and Buick, overcommitted to SUV and truck sales compared to competitors, leaving it exposed when faced with a suddenly deteriorating economy and high gas prices. Even entire industries can suffer from short-term thinking; the airline industry’s dependence on fees provided revenue during the recession, but at the cost of alienating customers and making air travel a commodity even after the economy had recovered. Some, like Coca-Cola and Netflix, were able to recover, refocus and reestablish their brands after much cost. Others, like GM and the airline industry, have suffered lost business, layoffs, and bankruptcy.
Brands are an investment, not a cost. When times are good, you wouldn’t think of sacrificing investment on training, new equipment or crucial hires. The same should apply to your brand. By continuing to invest in branding when times are good, you’re creating a foundation for good times for years to come.
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