Invest in Your Brand
Investing in your brand benefits your company as a competitor in the marketplace, builds trust with customers, increases perception of quality, and drives employee engagement.
We’re talking about investing in your brand and how it can propel your organization, whether it’s in the sports world or not, to success.
Derek Let’s clarify the difference between an investment and a cost. Somebody who’s listening to this and who’s reviewing their budget, their annual budget, their PNL, and their balance sheet is looking at maybe some line items that might be designated to marketing. One question that we get is what percentage of our revenue should that marketing budget be? And then another one is why is this an investment versus a spend and why should I be focusing on this marketing thing anyway instead of putting that money into something else?
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Tucker So the general rule of thumb for industries that we’ve come across, it’s been pretty consistent for some of our most successful clients to adhere to this rule to spend anywhere between 5 to 10% of their annual revenue on what we would call brand development or brand building practices. That could be considered just marketing in general. If you think of all the different things that go into marketing, it would be 5 to 10% of your annual revenue. So what we’re trying to tackle today is why? What is the benefit? Why would I spend 5 to 10% of my annual revenue on that? What am I going to get out of it? And what happens if I don’t invest that money? I think we should actually start there. So what happens if we don’t invest that money? What are we losing out on?
Derek There’s this old famous quote that says, Choosing not to make a choice is still making a choice. Choosing not to decide is still choosing not to do anything. You’re still choosing to do something. And then what’s the other one? The definition of insanity is doing the same thing, or in this case, nothing, and expecting a different result to happen. So this differentiation of standing out in the crowd, especially in the sports world where lifestyle brands are popping up on social media, there are so many choices, there are so many price points. And for you to tell your story in any way that’s effective without doing that, without leaning into that, it’s going to be really, really hard to differentiate what you do and what your products are from anybody and everybody else that might not even be similar.
Tucker We started the conversation by talking about how sports is an incredibly saturated market. Competition is so fierce. We have a conversation internally where we say, Well, who doesn’t want to be in sports? It’s so great and it shows. It’s so highly competitive and there are so many people out there trying to vie for the same eyeballs and attention and dollars and wallets. So why does it matter? Why should I invest in my brand? And this, I think, all reverts back to what we refer to as the sea of sameness. There are so many people out there doing the same thing, doing all that stuff. You get kind of stuck in this sea of sameness and it really hones in on three main things. So without a strong brand, it’s going to be challenging for you to differentiate your products from other competitors. So if you have a great brand and you’re creating a unique value proposition that sets you apart from your industry, that differentiation can attract customers, it can increase brand loyalty and it can really drive business growth. And that’s what we would call the table stakes of branding – if you’re not doing that with your brand, then your brand needs to be relooked at.
Derek Absolutely. Without having a strong brand, without having invested in your brand, it’s also going to be extremely difficult to expand, whether that’s honing in on a new customer segment or introducing new product or service offerings to your audiences without a really strong brand reputation that you’ve already put in place. You don’t have a reason for those people to believe you, to trust you, to come alongside, or to try your products when you are trying to enter into these new markets.
Tucker I think that really provides a super solid foundation for diversification. So when you can leverage the trust and recognition you’ve built up with your target audience, they’re more likely to try something new that you’ve done. They’re more likely to do all these things. Without that great strong brand, you might go down a direction that is way out of left field and actually hurts all your other branding because you don’t have that strong base that people trust and people can really follow. The last one that I would hone in on for problems/negatives, we’ll get into great positives in a second, but the other negative is that without a strong brand, it’s going to be really hard to weather market crises and challenges in an effective way. So think about your reputation and the customer relationships that you’ve built up over time. Those really create a buffer against potential setbacks when either the market as a whole has a realignment or something like spending goes down or maybe the economy takes a dip in the wrong way. Those are where a strong brand is really going to be your best friend because it’s going to create stability, it’s going to create trust, It’s going to create that loyal customer base that supports you during negative events or if something goes wrong, you can kind of hold onto. But we have this group of avid fans that always love us and always will.
Derek Think of the brands that survived the pandemic, not ones that had products that just so happened to align with what people were looking to do when they were sheltering in place. We know that golf exploded, and camping exploded. But for everybody else – for baseball products, football products, tennis products, competitive sports, and team sports – that all got put on hold for a certain period of time. Think of the flexibility and the ability that companies and organizations had to pivot into to adjust or just weather the storm.
Tucker The uncertainties – we don’t know what’s going to happen and that’s okay because we have this group of people that rely on us and we rely on them and it’s more of a partnership than it is a one transactional process. So overall, when we’re looking at it, customers are looking for more than just functionality. They crave an emotional connection with the brands that they choose. And failing to invest in your brand can leave you vulnerable to being overlooked. Those consumers gravitate toward brands that they trust and resonate with. If they don’t trust you and they don’t resonate with you, that’s going to be a problem. It might not be a problem today. Maybe your organization is doing great and that’s fine. What we’re trying to say is this isn’t a cost. This isn’t a one-time fee that you’re just trying to build up and set aside. This brand development and brand building is an investment. It’s a long-term play where you say, Our team is here to win and we know that you can’t win the game right now, but you can sure do a lot to help yourself. The whole saying with the golf tournaments is, You can’t win on Thursday, but you sure can lose the tournament on Thursday.
Derek Exactly. And back to that kind of balance sheet or budget line item for cost versus investments, I get that running a business includes all kinds of costs. But think of costs as short-term. They might hurt. They’re not the fun things to necessarily spend money on, but they’re the things that you have to do to stay in business and to keep the lights on. Investments, just like stocks, like your 41k program, are meant to benefit you for the long term. Sometimes when you put that initial investment in, it might take a minute, it might take a quarter, or it might take a year for you to realize the positive impacts of that investment. But I promise you, if you do it and you do it consistently and you do it in the right ways and with the right components that are authentically and relevant for your specific business, it will help you stand out. It will help you build recognition, and it will help you establish trust with your customers.
Tucker We kind of talked about three of the negatives and the positives associated with that. But when I think of the benefits of brand investment, I really think of four key areas that we hone in on to say, Here’s what you’re going to get out of it. Maybe you’re not a brand professional. Or maybe you’re a marketing leader that knows the ins and outs, like the key points of impact that you can create. But what if you don’t? What if you don’t know those impacts? What should you be looking for? And I think that we look at four general areas for that. So what I would love to do is go through those. And I think we put a couple of examples in there to say this is generally what we’re talking about. And then I’d like to go back to one or two of our clients and what they saw and how they went about it and then what was that impact for them when we talk about a year. You even said it could be a quarter, it could be a year from now. What happens a year after brand development or brand-building practices? So let’s go through the benefits, the four key benefits of brand investment. One is differentiation. We talked about it. Investing in your brand allows you to carve out a unique identity that sets you apart from your competitors by defining that brand essence, those values, and your purpose. You’re going to really create a distinct personality that resonates deeply with your target audience. And we would say it positions really nicely with your target audience. So it speaks to them in a way that no one else can speak to them.
Derek Part of differentiation is knowing who you are, what you do, what you stand for, and who you serve. It includes having a strong position, which we’ve talked about in previous episodes of this podcast. And it’s the ability to not only know what you stand for but to be able to tell that story, to be able to tell that story in your words, in your attitude, and your tone in that unique and authentic way that really sets you up so that when I’m choosing between you and one or two or three other people that are very similar, or at least in my perception are similar to you, it’s what creates that difference. It’s what explains to me what is unique about you. And even if, in this particular instance, your product isn’t what was right for me, you’ve actually built some trust with me by helping me understand that so you didn’t waste my time and send me down the wrong path. There are a lot of benefits underneath differentiation and standing out.
Tucker I think an example that a lot of people would know is the company, Nike. They do a great job. Their brand positioning is more than just a shoe company or an apparel company. They represent a symbol of empowerment and athletic excellence that’s enabled them to really dominate the sports market. And you can say, Well, they have massive budgets and they spend all this money on all these other things. If you look across the history of that space, there’s been lots of companies that have massive budgets and have spent it in a certain way. But they’ve spent it within building a unique brand that stands for something rather than other companies within their space saying, Well, we’re just going to spend it on maybe it’s advertising. I think if you watch the movie that just came out – Air – that’s a great example of how their brand, maybe not at the time, but it is kind of founded on these key values and purposes. And really the essence is there. And the competitors in that movie kind of explain the idea that that’s not what they’re selling, they’re selling the flashy now. Whereas that’s not really what Nike was selling at the time. And I think that’s a really interesting look at how that can impact a long-term play for you.
Derek Great movie. Check it out. It’s running on Amazon Prime, I bet.
Tucker Number two – and I kind of grouped these. But you’re going to build trust, you’re going to build credibility, you’re going to build loyalty. I kind of smashed all three of those into one point. And number two is really about instilling trust and credibility among your consumers, the people that buy from you. And when people recognize and have positive associations with your brand, they’re more likely to choose you and even recommend you and your products over competitors.
Derek This is where we get into what we would call building brand advocates. Having people that have such a great understanding of what you do and how you’re different, and then having had such a wonderful experience with your product or service that now you’ve earned their trust and they become people that are now going to tell that story and market on your behalf.
Tucker We recently did a project with the Minnesota Vikings, and the whole point was to talk about how do we create more avid fans. They’re a professional sports team. They have fans, they have avid fans. They have a lot of casual fans, too. How are we utilizing brand principles, and brand practices in order to convert someone from that casual fan to the avid fan? I think the same is true with most of our clients, whether they’re in sporting goods, whether they’re a club, whether they’re in other areas of sports. How do we create more avid fans for you, and how do we do that in a way that people then are expecting things? You’re consistently delivering on your brand’s promise. You’re maintaining high-level standards. You’re building that reputation that encourages increased retention rates of the customers but also encourages them to reach out to their friends and expand that group for you.
Derek And that’s also a long-term investment. If you are fortunate enough to create advocates of your brand that start shouting from the rooftops about who you are and referring you to anybody and everybody, those people and those relationships with those advocates need to be nurtured, need to be taken care of, need to be consistent. We have to make sure that we’re continuing to give them a reason to continue to tell other people about us. It’s not a one-time transaction.
Tucker I don’t want to get into it too much in this conversation, but consistency is so important and I think a lot of people take it for granted. Every single time I have a friend or someone else ask me why consistency within our brand is so important, I’d say, Well, why would you want a consistent friend? Why would you want someone in your life to be consistent? It’s the same reason generally. I can build up my expectations. I know what I’m getting out of you. And then I can also ask more from you in certain areas where I know you can give me that option. So consistency is super interesting. But when I look at trust, credibility, and loyalty, the brand that comes to my mind is Titleist. Theirs is a brand that is known for performance and precision. And that’s really because of the loyalty they’ve driven over decades of being the number one ball in golf. They’re used by most professionals. They position themselves as not only a brand that is golf-forward and forward-thinking but as a brand that is used by the highest level of people. And that’s a branding play to build credibility within their industry.
Derek Their golf ball is played by more professional golfers without getting paid to play their golf ball than any other product, which is incredible. And the R&D and their products back it up. Organizations like My Golf Spy, which are third-party review organizations that don’t take any advertising dollars from any companies like this consistently year after year after year in their own testing rate brands. Specifically, they rate Titleist as the best golf ball in certain categories. They’re also obviously clearly investing in R&D and they’re continuing to make sure that that product is consistently performing, but that on top of or next to the investment and the time that they put into the brand itself to continue to tell that story is paying dividends.
Tucker You can get into the product and why people buy the specific product but think about how many Titleist hats you see when you go to the golf course. Do you think their hat is the best hat in golf? Probably not. But that name has credibility. It stands for something. It’s trust. It stands for high-quality golf. It stands for the ability to really be practicing and working on things and getting better. And that’s brand building. That’s developing a key brand and saying what we stand for. What are we all about? How do we build towards that? To your point, it’s not quarters, it’s decades. I mean, they’ve built that over time.
Derek Well, let’s take Titleist and go right into your third point. The third benefit of investing in your brand is the ability to charge more. I have no idea what it costs to make a Titleist Pro V1 golf ball, but I would be willing to bet that the margins on that product are extremely high.
Tucker I would agree. If you go back to the high-level discussion we’re having outside of Titleist, saying, What do you mean by premium pricing? When you’re well positioned, you’re well respected, your brand has great awareness, It allows you to charge a premium for that kind of service. That’s why we call it an investment because what you’re doing is building that premium price leverage over time. And if you don’t do that, you can’t expect to charge a premium if your brand isn’t perceived as that.
Derek Especially if your product is in any way, shape, or form considered a commodity. If what you’re doing is common, commoditized, where people have lots and lots of choices in the exact same space, you’ll see some brands take the marketing tactic of charging less. Some people call that getting into the race to the bottom. Whereas the organizations and the brands in those spaces that have established a position and that have established what they stand for and started to create reputation and loyalty can rise out of that sea of sameness in that commoditized market. Instead of charging less to sell more, they charge way more.
Tucker When customers perceive your brand as high value, reliable, and incredible, that is something that they’re often willing to pay more for, for the associated quality and experience. So if you think of the Titleist example that we’re talking about or even the Nike example, they’re
Derek also paying for the association. They’re also paying to say, Look at me, I’m wearing Titleist. Therefore I’m a golfer that represents some of the qualities that this brand stands for.
Tucker Brand is identity. If you have a great brand, then people are proud not only to wrap it, to wear it, but to tell other people about it because it makes their identity boosted. People don’t just wear Nike because the shoes are the absolute best shoes on the market. They do it because of what it stands for. To your point, that shoe is a commodity. You could probably buy a pretty similar quality shoe at Target for generic prices, and you’d get the same amount of use out of it. You’d get the same level of ability to walk out of it. But that’s not what it stands for. It stands for all the great things. And they’re able to charge that price. They’re able to build in that perceived value added. And it’s mostly emotional value. I think that it’s just hard for some people to see that.
Derek Now, let’s pivot and go into the fourth one because the first three that we talked about tend to all have very external market, consumer, and customer-minded thoughts to them. What are the customer benefits for us investing in our brand? What if we turn that and look internal? What’s the benefit of thinking about it for our own team?
Tucker I love this one because I think the marketing leaders and the organization leaders that think of this as a branding benefit are the most fun to work with because they get it. They just totally understand. And the ones that don’t are fun too because then you get to explain to them that there’s a whole nother side to the benefits of branding. But that fourth one is employee engagement. A strong brand not only attracts customers but it also attracts and retains talented employees. And that’s a really, really big competitive advantage for a lot of people, especially right now with how competitive the labor markets are. But when you have a compelling purpose, you have a positive reputation, you have clear values, you have a great culture tied to all that. And you can really attract individuals who align with those things. If I see a company and I think they’re cool and I like the way they’re going and I like the culture that they have, and they have a really interesting perspective on how they view their products as more than just a shoe – it’s bigger than that. That can get me excited. That gets me going. I should work there. And that’s why a lot of those brands, those really big brands, that everybody wants to be like, have great employees. And they keep getting better. They keep growing their brand because the employees understand the brand. That goes into a whole nother conversation.
Derek But it’s right back to the word investment. It’s the employee, first and foremost, saying, I believe that by me joining this organization with where I see this organization going because I believe in what they stand for, this is an investment in me and my career that I have the opportunity to be part of what this company is doing. Equally is the company looking at you and hiring you as they’re looking at investing in you in that you’re going to help them within your role to get to that place, to achieve that vision. But the word investment still applies.
Tucker I think there are a lot of people that would look at employee engagement as like, Oh, that’s cool. That’s fine. That’s something that I think is so underrated. When we as a team walk into a prospective client’s office, we take in their culture and we walk through this and they go, Hey, we have problems with this and we need to solve this problem. For me, the biggest telltale sign is how does everyone interact together? The most successful brands that we’ve worked with, the biggest, the most impactful projects that we’ve done, they’ve been with teams that believe in what their company is doing and they share the same values and they’re moving forward together. And I think that is underrated. It gives you another level of confidence moving through these practices, moving through these problems to say, We know who we are. We know who we need on our team because they’re us. They’re the same people as us and we’re all trying to get to that same place.
Derek That passion, the energy, the environment that that fosters, when you get that right, there’s nothing like it.
Tucker We have a couple of minutes left and I want to get into at least one example. And I want you to pick your poison here. Whichever example you think is the most interesting for listeners to say, What did they get after a quarter, a year, or a couple of years when we’re looking at this opportunity to either redevelop your brand or you have a great brand and you’re just looking to keep crushing it, just keep going. How do you keep building upon the great foundations that you’ve set for yourself moving forward? You pick a client and let’s talk about it.
Derek Let’s talk about McDavid for a minute. And if we have time, we’ll do the second one. But McDavid is a sporting goods company that when we first started working with them, was lost in the crowd. They didn’t look like what they wanted to look like. Their reputation was no longer what they wanted to stand for, but they had identified a competitor named Shock Doctor that was doing a lot of things that McDavid saw as being thoughtful and right.
Tucker Before we get too far, McDavid is a sporting goods company. They do sports medicine. They do knee braces and pads and
Derek Performance apparel, compression gear. If watch an NBA basketball game and you count the number of sleeves on their legs, arms, and even the gear underneath, that’s what McDavid does.
Tucker Just for context. So this is what the company does. It’s a little bit different than maybe some other people listening think. Keep going.
Derek So McDavid invested in their brand. They stepped back. They took the time to figure out what their brand was about, where they believed their organization was going, and who the target market was that they could serve. They basically went through after 30 years – they were a 30-year-old company – and stepped back and repositioned and made sure that where they were going, the products that they offered, that they had a market and an opportunity and a right to win. And they went all in after it. And while they not only surpassed Shock Doctor and some of their key performance indicators that they had determined, one year after McDavid relaunched their new brand to their target market, their consumer product sales went up 20%.
Tucker Year over year.
Derek In one year. So I don’t know exactly the dollar figure that that ROI turned into, but I can guarantee you that was more than 5% or 10%. If they spent 5% or 10% of their revenues on that marketing initiative or on that branding initiative, the ROI was way, way more multiples than that.
Tucker That’s the one year after that. And then a couple of years down the road, they ended up being able to get acquired by a parent company that actually saw them as much more valuable than they were five years beforehand. And to say the power that that brand building and brand development process had for them not only had an impact in a year, but it also impacted their future. It impacted their ability to become part of a different team. For them, it was moving on to get better resources, to get more leverage in different areas, and then actually become part of another organization that could make them keep moving on that promise that they’re giving to their customers.
Derek And coincidentally or ironically, never quite sure which is the right definition, they’re now sister or cousin brands with Shock Doctor. McDavid and Shock Doctor are under the same ownership which allows both brands to basically stop competing with each other and instead really specialize and focus on the customers that live within the niches of each of their offerings to continue to build that loyalty. And not only have they done a great job of building brand advocates, the people that work for these organizations love working there. They live those brands.
Tucker And I think that when we look at impact, especially with some of these bigger projects, when we zoom out a little bit and go, Wow, that’s a big project. It took six, nine, 12 months to actually do the project itself. And then the impact is maybe six, nine, 12 months after that. What I would say is you might not see a financial impact right away, but after one quarter, I would argue that every single one of our bigger brand development projects sees employee engagement skyrocket. When we work with certain clients, they don’t have to roll it out over an entire year for someone to buy in. They have a quarter’s worth of rolling it out and at the end of that quarter, people are like, I’m all in. This is awesome. The way we’re going, what we’re doing, what we’re all about – I see it. I can be there. We’re not just sitting here saying, How do we attract more people for your brand? We’re saying, How do we help that plus help your team see your vision for the future of this company? How do we bring them into your mind? How do we let everyone be a part of that future? And that’s a game changer for them because not only are their employees excited to be there, like you’re saying with McDavid, they love the brand. They live the brand. That’s all they do every day. Not only that, but now they’re willing to make the right decisions in their position that actually grow the brand in a better way than they would have even six months beforehand because they know what they need to be doing.
Derek In any industry that’s competitive, but in particular, because we’re talking about sports adjacent industries right now, investing in your brand, and looking at what you spend on your brand as an investment is not a nice to have. It’s a have to have. It’s not a luxury. It’s a necessity.
Tucker It’s the key to differentiating yourself. It helps you build trust. It fosters loyalty. It just helps you gain a competitive advantage in so many ways that I think people lose sight of that. Maybe you get new a visual identity system and you’re sitting back and going, Oh, we have new visuals, that’s cool. But that doesn’t necessarily tell the whole story of what you’re going to get out of this. Investing in your brand is an investment in your future. And as you embark on that journey, your goal isn’t just to change the way you look. The goal is to capture the hearts, minds, and markets of your world. And that’s our goal too. So when we sit down with you, we don’t say, How do we sell more products a year from now? And that’s absolutely a part of it. Our goal is to say, How do we capture the hearts, minds, and markets? How are we doing this in a way that just changes your game for the better?
Derek And in a better, sustainable way that’s also enjoyable as hell to be part of – for us and for the people as they go on to do some great things and continue to grow a very healthy, awesome business because they put that investment in.
Tucker Absolutely. So that’s all from us today. Questions, comments, concerns. Reach out to us. We’d be happy to talk to you. Anything else? We’ll look forward to you on the next episode. Just keep listening. Stick with us for a little while here.
Derek Till next time.
Derek Sussner is a branding firm specializing in helping companies make a meaningful mark, guiding marketing leaders who are working to make their brand communicate better, stand out and engage audiences to grow their business. For more on Sussner, visit Sussner.com.
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