So what is a brand, what is branding, and why should you care?
If I had to summarize this lesson into three quick bullet points, these would be:
– Brands are promises that consumers believe in.
– Brand building involves creating trust in who you are, what you stand for and what you will provide.
– Brand strengthening involves repeating and keeping your promises.
A brand, in essence, is a promise about who you are and what benefits you deliver that gets reinforced every single time people come in contact with any facet of you or your business.
Branding, as such, is the process of building this positive collection of perceptions in your customers’ minds. It is effectively defining the promised benefits that your customers will enjoy from experiencing your brand and keeping these promised benefits over and over again.
Think about some big brands like Nike or Coca-Cola – whenever you see or are considering buying a pair of Nike shoes, you have certain expectations from them – a certain level of quality and a certain representation of what it would mean to buy Nike shoes.
You don’t inspect the quality of Nike shoes the same way you’d inspect a brand you’ve never heard of, simply because the years of branding have instilled certain expectations regarding what the product will deliver.
Similarly for Coca-Cola, you have certain expectations that you are certain will be met – the biggest one being that every bottle of Coca-Cola will have the same taste.
It seems obvious to us now, but imagine a cola brand you’ve never heard of – how can you accurately judge whether the flavour will be pleasant or not before purchasing it?
Of course you can’t!
But with a solid brand which makes the promise that the flavour will always be as expected no matter where the bottle is produced or sold, you don’t hesitate as much – you know what to expect, and this expectation is reinforced every time it is met and eroded every time it isn’t.
The reason why Coca-Cola and Nike are such powerful brands is because they have excelled at maintaining their promises and as such, build a solid promise over years of branding.
Core Benefits of Branding on Amazon
A brand is constructed around four core pillars: Product differentiation, value, information and consistency.
Brands create trust and emotional attachment with the goal to create a long-term competitive advantage that can weather price wars, poor communication, exceptional customer dissatisfaction and similar troubles often experienced by businesses.
Let’s look at a practical example on Amazon – water filters.
Right away on page 1, you can see that the results page is dominated by a single brand – BRITA.
Now, water filters aren’t complex electronics that no-one can reproduce – however, BRITA has been working on establishing itself as the best brand for water filters since 1966.
Decades of branding have resulted in it being the leading choice for water filters, despite fierce competition on Amazon, especially since water filters can easily be sourced from China and retailed at a similar quality level but a much lower price.
When you search for a water filter and you see BRITA, not only are you more likely to purchase if you’ve heard of BRITA before – which increases sales velocity, which increases review velocity, which in turn increases appeal due to a higher number of reviews, and so you’ve got a positive reinforcement circle – but you’re also much more likely to purchase the same brand again if you ever need another water filter.
In the context of this product, branding is actually very useful, as water cartridges are staple goods aka goods that are repurchased regularly.
As long as your initial experience of the branded product meets or exceeds your expectations, you are very likely to stick to that brand. Once again, this highlights the importance of keeping the promises that your brand makes.
This water filter example shows just how important branding is when it comes to selling products that you can expect your customer to want to repurchase again at some point – think of products like candles, supplements, golf balls, incense sticks, teabags, fertilizer, underwear, marker pens, and so on.
If you’re 100% happy with the product that you bought, why wouldn’t you buy it again?
Let’s go even further – if you’re 100% happy with a brand’s product, why wouldn’t you assume that their other products won’t satisfy you as well?
Imagine you’re looking for marker pens because you like to keep physical notes. If you see a listing with a brand that has a professional look and promises that its pens will last 50% longer than the generic ones, have a more comfortable grip so you can use it for hours without discomfort and doesn’t squeak, you might go for it.
That’s the promise here.
If your experience confirms this promise, you will most likely look to buy the same ones next round.
Now what if this brand also promises you a whiteboard that’s super easy to install and doesn’t get dirty?
Wouldn’t you be more likely to trust this promise compared to some unknown competitor who makes the exact same promise?
How Branding on Amazon Increases Your Profits
Now you can start to see the huge benefits of having a brand.
It’s hard enough to find new customers on Amazon, and it can be quite costly too.
Imagine spending 3 dollars on PPC to get a sale on a 10 dollar item.
If your margin was around 50% – which is already quite high – you’ve reduced your profits by more than half.
Now imagine that customer buys, but since there’s no brand perception, the next time round they just buy whatever they happen to see, and never interact with your business again. With this customer, you made a profit of two dollars.
Let’s take the same scenario, but with a strong brand this time.
You still spend the initial 3 dollars on PPC to get the customer’s attention, but instead of going for whatever they find after that, they are much more likely to buy from your brand again – except this time, you don’t have to spend a single cent!
You don’t just double your profits there – you go from 2 dollars in profits to 7 (2+5).
That’s 3,5x the profit!
And that’s not even taking into account upsells or the customer trusting your brand enough to purchase different products of yours on which you can make even more profit per item.
This was a very simple example, but it illustrates well the power of branding. If you’ve ever wondered why some big companies in very competitive industries like Coca-Cola or McDonalds can spend billions on brand marketing, you’ve got it right there – customer lifetime value.
What branding isn’t – and why it’s a common trap
Here’s an important thing to keep in mind – your brand isn’t your logo or the word you put in your title in front of your product name. You see a lot of listings with some strange so-called brands nowadays – but as we’ve explained, branding is much more than this.
Your brand is the perception of your customers of what you offer.
It’s what people believe you stand for.
For example, Apple may sell electronic devices, but its brand stands for thinking differently, which is then reflected in product benefits through revolutionary user experience and design. With each new product launch that successfully conveys this idea, Apple further reinforces its brand in the minds of its customers.
Brands make selling easier: In a world where there are more and more products and sellers, it can be overwhelming to know who to choose. Through branding, you distinguish yourself by creating a profile in your customer’s mind – and critically, a positive one – that automatically pushes them to choose you over your competitors.
Let’s imagine you’re selling water bottles now– how many other sellers do you think are selling this on Amazon.com right now?
More than a single page’s worth, I can assure you.
So as a customer, which one do you choose?
They are all somewhat similar, it’s tough to tell the difference…in fact, you might not even choose any due to analysis paralysis or make the wrong choice due to decision fatigue…and vow never to buy your filters from Amazon again!
N.B: Analysis paralysis: Analysis paralysis is an inability to make a decision due to considering too many factors or choices to weigh in the decision-making process. The result is an endless comparison of the pros and cons of each option without a final decision being taken.
N.B: Decision fatigue: decision fatigue refers to the deteriorating quality of decisions made by an individual after a long session of decision making.
This makes branding particularly important for E-commerce and especially Amazon, because as more and more competitors come in but customers’ browsing time or options-weighing time doesn’t increase proportionally, any kind of preconception about the features and benefits of a product becomes an important shortcut for the customer – and thus a critical asset for your business.
Alright, now we know what branding is and why branding for Amazon is essential for our businesses to thrive – let’s go and explore our first core aspect of branding – product differentiation.
