A Great Brand Drives Up Margins

by Jun 8, 2018Branding

A Great Brand Drives Up Margins

by | Jun 8, 2018

How much would you benefit if employees and customers liked and trusted your brand? If your profit went up, if it was easy to do business, if your employees were happier; how remarkable would that be?

Achieving likability and trust as a brand ain’t easy. First, you have to know who you are – I mean, really know your brand at a heart and soul level. Then, you have to figure out how to tailor your offerings to your customers in a truly meaningful (and not manipulative) way. And finally, your brand has to act and speak consistently. The prize at the end? Customers and employees get you. They like you. They trust you.

But isn’t that just hippie mumbo jumbo? How do we know that liking and trusting means anything other than good feelings? There’s a rich body of research around this. So let’s look at some numbers.

Meaningful Brands Outpace the Stock Market by 206%

Research by Havas Group from 2017 shows some encouraging statistics for brands that are willing to develop their own way of doing things and deliver it well to audiences. They’ve found that meaningful brands outperform the stock market by 206%.

Heck, If you told me that a meaningful brand could outpace the stock market by 10%, I’d be on-board. I’d take that 10% and reinvest it into my company to make my brand even stronger every year. Imagine what you could do with 206%…

But the story’s even better than that.

Solid Brands Increase Share of Wallet By 9x

If you told me I could double the share of my client’s business by aligning my operations and communication with my brand’s beliefs and values, I’d be stoked. Why wouldn’t I want to have everyone on the same page and get client expectations aligned and consistent?

That same research from Havas showed that solid brands also saw an increase in share of wallet (the part of your client’s budget that is spent with you) by 9x. But the story doesn’t end there.

12% Increase in Premium Pricing! (and a 10% increase in purchase)

Havas has even more to say about how great brands win. They get 12% more margin, along with a 10% increase in purchase price. And this is statistically attributable to the brand.

If you told me I could charge more because people liked and trusted my brand more than my competitors, I’d be stupid not to invest in it. Getting paid more to invest in the work you love and build the relationships you want is a no-brainer.

But is Any of this Surprising?

We nod our heads when we read these encouraging statistics, but it’s often hard to know what it looks like in real life. Try this:

I heard about a little hotel called “Magic Castle” in Hollywood, California.

It’s described a Motel-6-like building and nothing special to look at. But they do small things well. One of them is the Popsicle Hotline in their pool area. If you’re a kid and you want a popsicle, you walk over and pick up the red phone and they tell you they’ll be right out with popsicles. And then they deliver. Magic Castle visitors trust the staff to do those special things right. And as long as everything else (room service, housekeeping, etc.) is on-par with expectations, people will pay a premium for a uniquely-branded experience. They’ll remember the Popsicle Hotline and tell everyone about how that brand left its mark on them.

At Resound, we call this discovering your Remarkable. And we think each company has the potential to be a remarkable brand if they’re willing to develop it.

So what’s your Popsicle Hotline? How do you show customers the soul of your brand through experiences? If you haven’t nailed it yet, maybe that’s why your margins aren’t where they could be.

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