Why Brand Building Is Actually Worth The Investment

Managing Partner of Global Wired Advisors – A Lower Middle Market Investment Bank focused on Ecommerce Heavy Consumer Products


Throw a stone outside your office window and you’re liable to hit an e-commerce consultant espousing the transformative powers of building an enduring brand. And in a big-picture, long-term planning sense, traditional wisdom suggests that they’re right.

It’s true that recognizable brands can charge premiums, whereas less-established companies cannot. Moreover, in my experience, brand equity empowers founders to negotiate for a higher purchase price, which translates to increased value from a merger or acquisition.

The Drawback Of Brand Building

While it may seem like a no-brainer, many founders are tempted to put off or forego brand building altogether. This could be due to the high time investment or financial cost.

I’ve talked with hundreds—perhaps thousands—of entrepreneurs throughout my career. Many have said they simply placed branding on the back burner to prioritize more pressing initiatives. Customer service, digital marketing and all the various functions of running an online business take up considerable time and energy. And not all businesses can afford to outsource these functions to an employee or third-party service.

However, neglecting to pursue brand building could be detrimental to the health of a business. Research indicates that branding increases familiarity as well as brand equity, driving sales volume while increasing the overall value of a company.

Perceived “drawbacks” notwithstanding, I believe brand building is too important to put off any longer. Simply put, I’ve found the investment is insignificant compared to what companies stand to gain.

The Benefits Of Brand Building

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Aside from the benefits highlighted above, there are numerous additional reasons entrepreneurs should consider developing a robust branding strategy. I categorize them as follows.

1. The Immediate: Store shelves are lined with dozens of variations of essentially the same product; some are better, some are worse, but they all fulfill the same need. It is well known that competing on price isn’t sustainable, so to stand out, it’s best to differentiate your company from others in the space.

In the landscape of e-commerce, this comes down to making a strong impression and communicating quality in an efficient manner. This is essential when shoppers can compare different listings at the click of a button. Standing out from competitors is incredibly powerful and when utilized properly, brand building can boost conversions, translating to additional sales.

2. The Enduring: As the lifecycle of brands becomes increasingly shorter, it’s critical to create a lasting impact in the market. Strong branding can assist in carving out and securing a competitive advantage.

Brand building can have a lasting impact on sales velocity, growth and your overall business valuation. Thus, the benefits are two-fold: First, revenue increases make the company more profitable, and second, you can earn more from a transaction should you decide to exit. Ultimately, the result is that you will have a more sustainable business that holds its value whether you’re at the helm or you decide to pursue other endeavors.

3. The Intangible: Finally, there’s the indescribable feeling of shopping with a brand that consumers trust. Providing customers with a sense of ease and security encourages them to keep coming back. Recurring sales drive revenue and improved perception of your product translates to better perception of the brand itself.

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Then there’s the awesome responsibility of heading a community—of representing something greater than just the sum of moving parts. A brand is much more than a business, after all. It’s an experience and a sensation of belonging that you share with the customer.

While it’s hard to quantify (at least at first), focusing on the intangible components of branding can engender loyalty in a way that improves the business in the short- and long-term.

Making The Investment In Brand Building

The concept of brand building isn’t new, but it’s never been more important than it is right now in 2022. Why? Based on my company’s conversations with the market, many institutional investors are looking for well-established brands with a strong track record of sustained growth.

It’s no longer sufficient to pursue unrelated initiatives separately in the hopes that one of them will help you stand out from the competition. Success requires a measured and deliberate approach that encompasses all business functions to operate as one cohesive branding strategy.

I believe brand building can help you achieve meaningful differentiation for your business. This not only encourages additional short-term growth but can also improve the overall value of the company. So, should you decide to pursue an M&A transaction, you will have already begun laying the foundation for a successful transaction.

Getting Started

My best advice for business leaders is to begin by developing an effective positioning statement. A positioning statement is essentially an overview of your product and/or service and what differentiates it from that of your competitors. This will inform all other aspects of your branding, so it’s important to get it right.

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Consider how you want your business to be perceived in the market and ensure that you can construct an authentic narrative around that perception. It’s critical that messaging is consistent across the board, and that your branding reflects what you are actually doing day to day.

Establish trust early on and future brand-building initiatives will have a more profound impact on the value of your company.

A Long-Term Strategy Worth Pursuing

Although it’s an ongoing effort, developing an enduring brand is certainly worth the investment of time and capital. The benefit to your business can be substantially greater in the long-term.

Brand building is an incredibly powerful tool—and one that companies can’t afford to overlook.

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