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Branding is one of the most important marketing strategies nowadays. Branding helps businesses stand out in a crowded market and also help them establish more personal relationships with their target audience. That’s why marketers put a lot of effort into building brand awareness so that they’ll manage to reach every person in their target audience and encourage them to engage with the brand.
Furthermore, many business owners measure the success of their marketing campaigns and other efforts by calculating the return on investment (ROI). But, when marketers report successful improvement in brand awareness, CFOs (Chief Financial Officers) don’t see it as an actionable result, especially since the impact of awareness on ROI cannot be directly measured. However, brand awareness does affect the success and the outcome of every marketing effort that has an impact on revenue. Therefore, here’s how brand awareness increases ROI.
Developing a brand means standing out in the market and offering customers something unique and something of value. However, no one will engage with a brand if they don’t know that it exists in the first place. It’s important to understand that online consumers want to know who they’re dealing with before they decide to make purchases. You can have well-designed marketing campaigns and promotions, but if no one knows about your brand, they simply won’t engage.
That’s why brand awareness plays a vital role in a brand’s marketing efforts. It serves a purpose of informing your target audience that your brand exists. Moreover, it tells your audience about the brand, who you are, what you do and what’s your company’s mission, as well as its core values. The more your audience knows about your brand, the more willing they’ll be to embrace your marketing promotions and engage with your brand, not to mention make purchases.
Even a bit of awareness can go a long way in influencing your target audience to engage with your brand. For instance, promo goods can spark awareness for a low cost and a high impact. What’s more, in the U.S. alone, brands spend well over $20 billion on promotional merchandise.
As a matter of fact, 84% of consumers state that receiving branded products from companies helps improve brand awareness, while 94% of consumers will remember the brand they received a gift from. Consumers that are more aware of your brand will more likely check out your offers and even make purchases. This leads to the conclusion that promotional items of a company are one of the most effective means of improving awareness. This can positively affect the brand’s bottom line and ROI.
A brand’s values are called equity. It’s a sum of positive experiences customers have with a brand that encourages them to become engaged and even loyal. However, brand equity starts with brand awareness. Your audience needs to notice your brand and to familiarize themselves with your brand before they engage, which is a crucial first step in your marketing funnel.
After you’ve built enough awareness, your customers will start to recognize your brand and try out what you have to offer. If your brand delivers on customers’ needs and expectations, you’ll build more positive experiences and thus have more valuable brand equity. Brands with positive equity can ensure customer loyalty and retention. In addition, they can even charge more for their products and improve their stock prices from equity alone.
The costs of acquiring new customers are significantly high for all businesses. In the modern digital world, consumers are more cautious and savvy, which means they won’t engage with the first business they come across. That’s why businesses spend a lot of resources on marketing to attract and convert new customers. However, brands can greatly reduce the customer acquisition costs through building brand awareness.
As mentioned before, brand awareness builds brand recognition, which can easily encourage prospective leads to try out your brand for little to no cost at all. What’s more, brands with a loyal consumer base don’t have to spend a lot on new customers, especially since loyal customers will always return for more business. Moreover, these same loyal customers will often become brand ambassadors and further recommend your brand to their friends, family and other online consumers.
Even though it’s difficult to measure, brand awareness does help increase a brand’s ROI. By helping a brand become more recognizable, awareness can influence customers to check a brand out and make purchases. Furthermore, brand awareness makes other marketing efforts more successful and more impactful, which ultimately leads to more sales and repeat business. The more awareness a brand builds, the higher their return on investment will be.
About the Author
Lauren Wiseman is marketing specialist, contributor to bizzmarkblog.com and entrepreneur. She helps clients grow their personal and professional brands in the fast-changing and demanding market, strongly believing in a holistic approach to business.