The Cost of Bad Branding: Real Business Consequences

There might be no difference in the taste of Coffee at a Starbucks vs a local coffee shop. But with the right branding, Starbucks charges a premium which customers are willing to pay. The local coffee shop struggles to attract new customers and retain existing ones.

If you think a local coffee shop can run ads on social media or other platforms to attract customers, they sure can. But retaining those customers needs a robust branding strategy. Hence, the difference between Starbucks and a local coffee shop is in “Branding”.

With the right branding, customers come to you and even do word-of-mouth marketing on your behalf. But what does branding mean? Is branding the same as marketing? Let’s understand how bad branding of your business leads to adverse consequences –

Good Branding vs Bad Branding

Branding is a powerful tool for businesses through which they can communicate their mission, vision, values, and overall features to develop trust among customers. An effective branding helps businesses stand out from their competitors and showcase their unique value proposition.

As opposed to it, bad branding can impact the entire business image and confuse customers. It will not only affect the company’s reputation but will also create a significant financial burden for the business.

Let’s first understand how good branding differs from bad branding. Good branding is authentic, clear and consistent branding. Through this, companies can establish trust and build an emotional connection with their target market. As opposed to it, bad branding is inconsistent, confusing and inauthentic, which does not place the brand correctly in the eyes of customers. It can be due to an unclear value proposition.

If customers do not comprehend how you solve their problem, they are not going to invest their time and money in you. Good branding is not only about having an aesthetic logo. You need to understand what makes a brand successful. Branding is the entire image of your business. Strong branding can help you increase revenue and build trust, while poor branding will drive customers away.  

Let’s Dive into Understanding the Top Mistakes Businesses Make in Branding

For creating a consistent and clear brand image, your efforts should be rooted in clarity, research and coordination. Businesses need a robust branding strategy that aligns with their business objectives and long-term goals. You need to ask yourself before launching any campaign for your business if it aligns with your overall business objective and brand strategy. Let’s see the top mistakes businesses make that lead to poor branding –

Believing in “First impressions don’t matter”

First impressions do actually hold a lot of importance for customers because, according to a study, over 75% of customers consider the credibility of the company to make their purchase decisions. The credibility of a company depends on overall branding, online presence and website.

If you are using low-quality designs or inconsistent and outdated information in your official platforms, be it your website, social media handles, etc, it can create a negative perception in customers’ minds about your brand. It will also make them hesitant to trust your business completely.

Branding as an Afterthought

Branding is not something that you do after establishing your business successfully. Branding is something that goes side-by-side and not as an afterthought.

You need an intentional strategy for your brand. It includes selecting colours, tagline logo, developing digital presence, consistent messaging and designs. Branding strategy should be the foundation of your entire business that authentically and accurately represents your brand in front of customers.

Branding is not only about choosing colours and designing a logo. It has to do with strategically building brand awareness that contributes to increased customer loyalty and brand recognition.

Bad Branding Affects Your Conversion Rate

Bad branding affects your pockets directly. It will impact your sales and confuse customers into ignoring your services and abandoning your site. Businesses should invest in high-quality designs and maintain consistency with their overall brand image to increase customer retention and conversions.

If you have a very common business, you will likely target the same pool of customers as your competitors. To stand out in the saturated market, you need to craft a compelling brand image that communicates how your products and services are different. 

Higher Marketing Cost

If you did not invest your time, money and efforts in branding initially, it will result in higher marketing costs. The businesses that have inconsistent or weak branding need to work harder and spend more on advertising and marketing. Businesses need to invest more time and effort in creating strong branding. It will reduce the need for expensive promotions. Consequently, brands can create organic loyalty and drive conversions. 

Consistent Messaging and Brand Image

Ensuring consistency across all communication channels is important to maintain a consistent brand image. It can consequently benefit businesses in increasing their revenue up to 20%.

In addition to this, for effective branding, businesses need to provide concise and clear messaging. For example, some brands use very highly sophisticated quotes and slogans to attract customers. But often, those slogans do not relate entirely to their brand’s products or services that they are selling. So while businesses try to keep their messaging aspirational and inspirational for customers, it leaves customers completely in the dark.

If the messaging is not providing any specific information about the benefits or features of your products to the customer, they will not be convinced. Businesses need to create meaningful messages which are consistent across all channels.

To Sum Up

As discussed in the article, we saw that inconsistent branding can lead to increased marketing budgets. Businesses struggle with converting customers at a later stage, just because they did not accurately engage in branding initially. Customers have a variety of options to choose from in the market. 

To choose one brand over another depends on the overall branding of the business. This is why many customers would prefer buying a coffee from a well-known brand that they know or have heard of, instead of a place they don’t know anything about. You can consult our experts for designing a strategic branding plan for your business. VerveBranding is a leading logo design company in India offering creative solutions related to branding, designing and marketing of the business.