Learn how brand awareness increases return on investment.
However, brand awareness is a mysterious feature of branding because it is difficult to measure and connect it to revenue growth. So, while a brand’s strategy performs well, it’s hard for marketers to justify the budget invested in awareness.
As elusive as knowing how to measure brand awareness is, it does have a positive impact on ROI (return on investment). Just ask the guys at Coca-Cola, or at Q-Tips, or any other successful brand. Better yet, read on and learn exactly how brand awareness increases return on investment.
Awareness Persuades Customers to Buy
As with other aspects of marketing and branding, the main goal of brand awareness is to turn prospects into customers. It achieves this by influencing their decision.
Even a small amount of awareness has a psychological impact on a prospect's perception of your goods or services. For example, if a marketer emphasizes quality as your major selling point, the potential buyer is likely to associate that feature with what you offer. Best of all, you don’t need to invest a lot to leave an impression on your target audience.
One of the easiest and most effective ways you can achieve this is through quality promotional items. When potential buyers receive a branded gift from your company, let’s say a 16GB flash drive or 100% cotton T-shirt, they start interacting with your company. They become aware of your brand through the product and their daily engagement with it, ultimately choosing your product or service once they reach the final stages of their buyer’s journey. It goes without saying, this has a positive effect on your ROI.
Improves Brand Equity
When it comes to the value of your branding efforts, maintaining a strong brand equity is important. Essentially, it’s how much premium value your products or services generate just because they belong to your brand. Think Apple, and the cost of an iPhone compared to a Chinese knock-off.
The equity of your brand relies heavily on brand awareness since your customers will first need to recognize your brand as a valuable. The more they become aware of and engage with your brand, the more they increase the demand for your offers. Ultimately, this allows you to sell your services and products at a premium price and increase ROI without the fear of decreasing customer retention.
Lowers Customer Acquisition CostsCost of acquiring new customers is high in any business niche. Because prospects have greater access to information, they stop to research all available brands on the market before they make their final decision. This is one of the reasons businesses all over the world spend so much on marketing.
Investing in brand awareness raises brand recognition. This sparks interest among potential buyers to try out a product or service. Apart from that, it also aids marketing efforts as satisfied customers are more likely to recommend it to others, which leads to more sales and a higher ROI.
Boosts Customer Loyalty
In 2008, Kevin Kelly’s essay about the value of true fans became the cornerstone of branding for any business. The main idea of the piece is if you have 1000 truly loyal and regular customers, they provide a high ROI. They can even drive more brand awareness your way.
By investing in brand awareness, you build a fanbase. People start engaging with your product, not just because they want to buy something, but because they truly care about what you represent.
What you end up with is a sustainable model where you create brand ambassadors who raise awareness and in turn, spark it among others.
Don’t Overlook Brand Awareness
Despite what you might think and how difficult it is to measure, it does have a positive effect on your company. Brand awareness is the base for your brand’s identity you can’t ignore.
It makes your brand recognizable among prospects, influencing them to engage with your brand. It makes your marketing efforts more effective, so it has a greater reach to a greater target audience. It creates emotional trust and inspires customers to buy more from you. And that’s a definite return on investment.