Beyond just a memorable logo, good branding increases the value of a company, provides employees with direction and motivation, and makes acquiring new customers easier. So what exactly is a brand?

A brand represents the sum of people’s perception of a company’s customer service, reputation, advertising and logo. And when all of these parts of the business are working well together, the overall brand tends to be healthy.

1. Branding improves recognition

One of the major components of a brand is a logo because, as the “face” of a business, it’s what people instantly recognize. A professional logo design is simple enough to be memorable, but powerful enough to give the desired impression of your company.

2. Branding creates trust

Today’s consumers have more options than ever when it comes to choosing among a huge mix of hundreds of brands and thousands of products and services. In such a fiercely competitive environment, brand trust has become an important competitive differentiator.

Trust is a byproduct of a commitment to quality and excellence. If you can deliver the right results to the right people over the long haul, they will come to believe and trust in your product and service offerings.

3. Branding supports advertising

Brand advertising is a form of advertising used to establish connections and build strong, long-term relationships with consumers over time.

Companies that use brand advertising aim to get long-term positive recognition by establishing brand identity, credibility, and loyalty, and connecting with prospects intellectually and emotionally to motivate them to take action in the future.

Even without easy tracking and measurability, brand advertising campaigns still add tremendous value. With more consumers aware of your brand, the more they trust and stick with you throughout the buyer’s journey. This makes them more likely to take action when they see a performance-based ad (and even become a loyal customer) in the future.

4. Branding builds financial value

Companies who publicly trade on a stock exchange are valued at many times the actual hard assets of the company. Much of this value is due to the branding of the company. A strong brand often guarantees future business.

Whether a company is in the position to borrow funds for expansion or rolling out to an IPO, being perceived as more valuable will make the process advantageous for the owner. The greater a company’s devotion to building its brand value, the better the financial return from its efforts.

5. Branding inspires employees

Many employees need more than just work — they need something to work toward. When employees understand the mission of a business and its reason for being, they are more likely to feel that same pride and work in the same direction to achieve the goals the business owner has set. Having a strong brand is like turning the company logo into a flag the rest of the company can rally around.

6. Branding generates new customers

A strong brand can create referrals or viral traffic because people love to tell others about the brands they like. People eat, listen and wear brands, and they’re constantly telling others about the ones they love. In fact, 84% of consumers have said that they ‘always or sometimes’ take action based on personal recommendations.

Imagine falling in love with a brand but when you go to recommend it to a friend, you can’t remember it- this is why strong branding is so important; you can’t tell someone about a brand you can’t remember.

The most profitable companies, small and large, have a single thing in common. They have established themselves as a leader in their particular industry by building a strong brand, starting with a strong logo.