3 Reasons Why Brand Value is Worth More Now than EverJan Carlson
There’s a dilemma in branding, that the value of a brand is diminishing due to the internet and multi social media platforms. Some argue because so much information is out there readily available the research isn’t necessary anymore. Well, our branding expert couldn’t disagree more. Here are her 3 important functions of a brand and why the research is still more important than ever.
1. Risk Reduction
First, all consumer purchasing is designed to reduce risk. The relative level of risk involved in a specific purchase depends on the total acquisition cost, the time involved in the purchase, the potential for failure, the degree of damage incurred if the purchase fails, the consumer’s attitudes and values about the purchase, and a host of other factors. Brands give consumers a certain level of confidence about the level of risk they are undertaking in a purchase and the consequences they might suffer if the purchase turns out wrong.
Consider this: a new and unknown car company develops a new car that runs on tap water and costs $50,000. While this might be a very attractive offer, it comes with a considerable amount of risk. What does this product say about me? What if it doesn’t work or it doesn’t last? What if it isn’t safe? Do I have $50,000 to lose? And who are these guys anyway and what recourse do I have if this turns out to be a bad idea?
Clearly, a difficult decision.
But now consider if that car were offered by Toyota, Honda, or Ford? The risk profile changes. Or what if is still offered by an unknown company, but instead of $50,000, it costs only $5,000? Or what if it is offered by Kia and costs $5,000? Clearly the brand still has meaning reducing the risk of this transaction.
2. Saving Time
Time is the new currency, perhaps for many consumers even more important than money. Especially in those situations where the purchase is repetitive and relative low risk (for example, grocery products or pet food), brand loyalty can save consumers a lot of time. No need to do research prior to purchase, no need to read labels, or seek out specialty retailers. Just habitually purchase the brand you have come to know and trust to deliver the benefit you are seeking.
Research has shown than more than 90% of consumer purchase decision making is done below the conscious level and about half of all decisions are made by habit. These decisions are the result of cues in the environment that trigger the decision – and brands are a critical cue for habitual purchasers.
3. Making a Personal Statement
Apple has indeed introduced less-than-wonderful products and they seem to do just fine. People camp out in front of the Apple store in order to be among the first to pay a premium for whatever it is that Apple is introducing, regardless of the product reviews that come out in advance of the launch. Why? Because having the latest product from Apple makes you cool. Period.
The brands we use still have the ability to telegraph information about us, even in this information-intense, social-media driven world. The brand of clothing you wear, the type of car you drive, the type of devices you use all build a non-verbal picture that tells the world about your values, your attitudes, and in short, who you believe you are.
How much do you value your brand? Ready to see what it’s worth to your consumers?