As brand strategists, this seems like an obvious thing to say. But, many people in the business world agree with this — at least they say they do.

If this is true, you’re probably wondering in what ways exactly does a good brand bring value to the business?

The answer: increasing revenue and decreasing costs. Shocking, right? Well, not that much. Good branding, when done correctly, can lead to higher perceived value, better employee performance, and more effective use of resources.

This is a little hard to process at first. As business owners, we can relate to how used we are to running our businesses with an iron fist when it comes to investing money and time on things that don’t really show an impact on profits — or performance, at least.

Yet, things have changed a lot. Today, it's not a surprise to see design-oriented companies taking a huge lead over competitors that treat design as optional.

Branding -hence design- is adding value on high levels; as a process, embedding design thinking, lean methods, and other concepts that provide structure; and on the bottom line; as a set of more practical activities, like UX, web design, packaging, product design, etc., that have a more measurable impact in our businesses.

The value of “beauty” is still a must-have. And lately, the value of “purpose” (as in being good for the world) is also a desirable outcome. But you may argue (and we agree) that you can't justify an investment based on these two idealistic focuses.

Masks off. We’re all here to make money. After all, that’s the most basic reason for a business to exist. So let’s get pragmatic and illustrate the two ways good branding can give you the value of “profitability”.

Great branding can increase your revenue.

The most straightforward way to make more profit is by bringing in more money. This is what 99% of our clients have in mind when they call us.

You can do this in any of two ways: 1) by expanding your market reach to attract more clients, or 2) by increasing the value of your existing customer with loyalty and engagement boosters. Good branding can help with both.

Let’s say you are launching a new product to a slightly saturated market under a brand that no one has ever seen before. Good branding can help you take advantage of behavioral economics to influence the perceived value of your offer (higher price points); enhance your visual identity to increase customer trust, craft a great message that your audience love, and design beautiful packaging that add-on to you the customer experience — to name a few.

Or, imagine you need to increase the conversion rates of your e-commerce website. Good branding can help you improve user experience (UX) to create better interactions on your site, build a story that brings in more sales, work on captivating product images, or conduct user-testing validation before launching.

Great branding can lower your costs.

Another way to increase profitability is by reducing costs. This is the one thing that 99% of the people who hire us always overlook. It’s easy to neglect inefficiencies in your operations — happened to all of us.

We can drop down costs in two ways: 1) by reducing fixed costs (salaries, overhead, etc.), or 2) reduce variable costs (acquisition, sales cost, etc.). Again, good branding can help you do both.

Our go-to example is design costs. At first, the cost of building and maintaining a brand may look a lot like hiring a quick design here, a tiny revision there, and a small decision over there. But over time, all those minor details add up, taking plenty of money and time out of our pockets. Branding can easily solve this with a simple design system. A brand rules book that helps you stay on brand, on time, and on budget.

Another example is hiring. The cost of finding, onboarding, and keeping employees is immense. Good branding can help you create a company culture and working environment that people love to work in, a “why” that keeps everyone motivated and accountable, and even systems to improve performance. This will ease the efforts to retain talent and keep expenses from turnovers close to zero.

Get the ROI of brand work.

Hopefully, by now you can already see the influence good branding has on business success. But, pay attention to the conditional: good branding is valuable, but not every design is good design.

Frankly, there’s no guarantee that your brand efforts will return profits. This is like any other investment in the business world: It has risks, and all you can do is control it as much as possible.

Building a solid action plan is very helpful. Include clear goals, measurable KPIs, useful data (strategy, customer profiles, market research, etc.), references of the desirable outcome, and manageable deadlines. You can find a little help on that topic in our Project Brief Template. It will help you organize and communicate ideas in a way that guarantee success.

Finally, if you have any comments, ideas, or questions about the business value of design, drop a message. It will be great to open a conversation about this. And if you like to see more examples, go to our Portfolio page and click around.