Why a Small Business Must Do Branding

Small Business Branding: Why you should not ignore the branding process?

‘To brand or not to brand is the question’.

No. Stop.

Sorry you can’t talk like Hamlet here we are running a small business. You’ve got to brand.

In fact, it’s all about how to branding better now.

If you are running a small business, this article should definitely give you a good idea of what branding is and why it is important. By not branding, an entrepreneur is planning to get average results.

Let’s dig deeper into the topic to understand it better. You can also subscribe to my website to get weekly updates and tips from me. Cheers!

  • What is a brand?
  • Why is branding important?
  • Not building a brand is the entrepreneur’s ultimate failure?

What is a brand?

You want to buy a pair of sneakers, what do you do?

Consider a scenario of Brand or no-Brand:

You’ve got only two options to buy from. One is a Nike and the other pair of sneakers is from an unknown company (the company that doesn’t do branding).

You can spend $100 on a pair of sneakers. Nike costs $100 and the sneakers from the unknown company also costs the same. Which company do you buy from?

Nike, of course. Simple.

What if the other sneakers were 30 % cheaper than Nike, would you still buy from Nike? Yes, as per the rules of branding, you still would buy from Nike.

It’s because Nike is a brand.

Nike, the brand, has earned your trust and has delivered on its promise. It would be true when you are its loyal or satisfied customer.

If you are a new customer, then Nike must have created a distinct image (brand knowledge) in your mind. Now, you strongly feel that Nike can solve your problem better.

We’ll return to this example but, first, let’s talk about what a brand is.

According to AMA:

 ‘A name, term, sign, symbol, or design, or a combination of them which is intended to identify the goods or services of one seller or a group of sellers and to differentiate them from those of competitors.’ (AMA, 1960)

A brand is a public promise or commitment that a business makes to a customer about a product or service. The commitment can be expressed in terms of quality, features, feelings, perception, attitude, and experience etc.

Nike has created positive perceptions and associations of its brand in the minds of people. If you observe Nike’s brand communication(ads), you should notice that it only focuses on the intangible aspect of branding.

No doubt, Nike creates great shoes, but it does a much better job at branding. For example, ‘ Just do it’ is about positive attitude and taking actions. Nike mostly doesn’t talk about the tangible(physical) features of its shoes.

Nike is a smart brand marketer. It doesn’t create the differentiation or brand identity based on the physical product. You know, the physical aspects of your brand such as design or quality can be easily matched by the competition.

On the other hand, it is very hard to create a brand identity on the intangible aspect such as emotions, attitude, belief, hope etc. However, once you are able to do so, then it is very hard for the competition to replace your brand positioning.

Once, you’ve tapped into the customer’s emotion, she is likely to stay loyal. People often are not able to evaluate their emotions or feelings. Therefore, to take the emotional route is a more sustainable strategy to build a strong brand. That is how you get a loyal customer base by creating a unique brand identity and associations.

We can say that a brand delivers on its promises which leads to a customer trusting it. Thus, the relation has started which should only grow stronger as the brand grows. We can explore this further in the next section.

Now that you know what a brand is, you can read why building a brand is important for a small business.

Why is branding important?

Branding is, simply, the process of creating & building a brand.

With so much clutter and a plethora of generic product on the shelf, it is hard for the customers to decide on what is a better product. As we discussed, your product identity (i.e. brand) becomes a crucial factor.

It is here that branding becomes a useful tool to help both the customers and the business.

By creating a brand like Nike, the business commits to a better quality of a product, service, and experience. In return, a satisfied customer leaves your business with tons of positive associations(memories) about your business.

Positive experience leads to a Positive word of mouth:

They say the best communication is done by a satisfied customer on your behalf (word of mouth). For example, if the customers say, ‘O these guys are good’, ‘O they are fast’, ‘I love the ambiance’, ‘I love it’.

Think, how many times you purchased something when a friend or a relative recommended it?

Brand Knowledge: Managing the brand & brand communication efficiently, the entrepreneur creates important brand knowledge about his/her business. A strong brand knowledge leads to strong positive perception about the brand in the long-run.

However, just having a strong brand knowledge is not the objective. A successful branding process should also result in a customer responding differently to the company’s product or service.

The difference in the customer’s response is expressed or measured through loyalty and commitment in a purchase situation. After all, you are not the only business targeting the customer.

Hence, we can say branding is creating a profitable relationship between a customer and the business. Great branding should result in a strong bond between the business and the customer.

This is how successful businesses grow despite the competition i.e they create a strong brand.

Small Business Branding : Not building a brand is the entrepreneur’s ultimate failure?

You see, starting a business is a lot of pain to bear. You don’t get into business just for a year or two. It’s a serious commitment in the long-run.

Building a business can practically ruin your life in so many ways. You can miss out on so much while working day and night building your business. Why run a business if you can’t build a brand out of it, is the question?

The purpose of branding is to run and grown a business in the long-run. Note that branding mostly doesn’t work in the short-run.

The entrepreneur himself is the villain in a small business

Lack of branding is one of the main reasons that a lot of companies don’t grow beyond the 10 or 20 employees mark after 15 years.

As branding requires serious commitment to quality and customer satisfaction, it makes branding expensive. It might explain why a lot of small businesses are not motivated to do it.

Often, the owners of the business find themselves so attached, engaged and possessive in relation to their businesses. They are mostly comfortable with business as usual.

Such businesses often can’t put their money where it is needed. It’s very strange that when losses are around the corner, the owner is quick to cut the branding or marketing budget first.

As a result, these business find themselves in a stuck-up situation like forever, and mostly the entrepreneur himself is the villain of the piece.

Reasons for Small Business Branding: What is the Return on Investment for running a small business?

You deserve the appropriate returns on the tons of time and energy wasted. Therefore, getting average or below average results should be termed a failure.

Hey, that’s just my personal opinion.

I’m not saying this for the sake of raising a bar. I doubt if you can motivate another person by challenging them.

If you don’t do branding, you are making losses. This could be the reality of your business, only if you are willing to review the situation.

Perhaps, an economist would better explain to you how much you lost or gained by building an average business. Suppose, you were not running that business, you could have been doing something else. They call that the opportunity cost in economics.

It is beyond the scope of this article but you can compare an accounting cost to an economic cost. It’s the economic cost that can give you the true picture of the business cost.

Let’s forget about the other opportunities cost that you could have availed had you not started the business. But I have a question for you:

do you add an executive salary to the cost of your business?

You, the entrepreneur, is that executive. By adding the entrepreneur’s salary, you would see a substantial cut in the net profit of a small business. Next time, you might as well add your salary as per the market to your cost sheet.

Personally, I am strongly in favor of managing a branding process in a small or medium size business. I am convinced that branding is the only way to shine through if you are a serious entrepreneur.

The small guys in the market have got no chance without branding, preferably in a niche. Therefore, building a brand is one of most important processes in your business.

In fact, a brand is what really makes your business.

Was this article helpful? Please, feel free to contact me to share how your manage branding in your business.