With 2024 investment and business goals already in progress, there is one thing you better keep in mind when planning your budget: your startup's branding. This article explores how branding or rebranding benefits your business from a short-term and long-term perspective and what KPIs measure the success of your branding efforts.
On a short-term basis, marketers tend to focus on demand marketing success, whose impact can be more easily and more quickly calculated. However, short-term branding efforts correlate with long-term goals; demand and brand marketing complement each other. Thus, marketing budget needs to find the right balance, with 46%¹ of B2B marketing budgets dedicated to long-term brand investment as good practice.
Branding and rebranding: About awareness and loyalty
Rumor has it that first impressions count most, but don't forget to provide your existing customers with an excellent brand experience: By simultaneously focusing on both new and existing customers, you can achieve 1.6x more business impact¹. Your branding initiatives should focus on both audiences, resulting in a more comprehensive growth strategy and helping reach short-term and long-term goals.
Attract new users
Needless to say, a powerful visual identity combined with the right messaging attracts users. An impactful brand built around a unique logo and branded elements catches the eye and leads users to your website. There, you can leverage branded illustrations, animations, and videos to explain your solution. Regardless of your sector, whether it be SaaS, Fintech, AI, Cleantech, etc., motion graphics and motion design help communicate your key differentiators, startup values, and user benefits.
Leverage all brand touchpoints
The average number of brand interactions² that are necessary to convert a prospect into a client is 8—thus, you need to create a consistent brand experience. By aligning your brand identity on all brand touchpoints, you generate trust and recognition for your startup. Brand consistency is vital for your startup's success, contributing to both demand and brand marketing efforts.
Enhance onboarding process
Branding solutions ranging from tech illustrations to explainer videos effectively showcase user benefits and product functionalities. By offering a clear and straightforward explanation of your solution, you facilitate customer onboarding. They will know what to expect from your business and understand the benefits of your solution. No matter whether you are creating a brand from scratch or looking for a rebranding, it is crucial to keep in mind your target audience and user journey.
Improve brand loyalty
Branding not only attracts users who have never been in touch with your brand, but also helps build loyalty on a long-term basis. Brand loyalty means that although customers have the opportunity to choose another brand, they continue choosing yours. This also means that when you are rolling out a rebrand, you need to pay special attention to the likes and dislikes of your existing users.
Closely related to brand loyalty is brand equity, the extra value a business gets from a solution with a recognizable name or branding, compared to a generic alternative. A strong brand equity has a favorable impact on brand loyalty, making it easier to retain customers³.
KPIs to watch out for: What branding and rebranding metrics say
Now, how do you measure success? Let's dig deeper into some KPIs for evaluating short-term and long-term branding effects—namely brand performance. Brand performance can be evaluated using a variety of KPIs' such as website visits, social media activity, search engine rankings, lead generation, and conversion rates. These metrics offer insights into the effectiveness of your demand and brand marketing efforts.
Customer Lifetime Value
One of the key KPIs that is used to measure the effectiveness of branding, or rebranding, is Customer Lifetime Value (CLV). Customer lifetime value is a metric that indicates the total revenue a business can reasonably expect from a single customer throughout the business relationship. A strong brand identity, on a long-term level, can contribute to extending your customers' lifespans, enhancing customer lifetime value. Giving customers a great brand experience drives loyalty and retention, resulting in more revenue from each customer for a longer span of time. Simply put, a strong brand drives improved LTV.
In order to calculate your CLV, you need two other numbers, customer value and the average customer lifespan².
- Customer value = Avg. Purchase Value * Avg. Purchase Frequency Rate
- Avg. Customer Lifespan = Sum of customer lifespans / Number of customers
- CLV = Customer Value * Average Customer Lifespan
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Customer Acquisition Cost
Customer Acquisition Cost, or CAC in short, determines how much it'll cost your tech company to attract new customers over a specific time. Successful startups strive to constantly minimize acquisition costs. The debate often arises about whether branding and strategy expenses should be included in the CAC calculations. If you deem these elements vital for acquisition, they should be factored in. Brand strategy implementation is a lengthy process, potentially spanning months or years for a complete rebrand. This is why a longitudinal CAC measurement approach is crucial to assess the short-term and long-term impacts of brand work on CAC.
Here's how you can calculate CAC at different stages after the brand is launched and compare the results with the period before the rebrand:
- Fixed time period before rebranding: Total marketing & sales spend / Total new customers
- 0-1 months after brand launch: Total marketing & sales spend / Total new customers
- 3-6 months after brand launch: Total marketing & sales spend / Total new customers
- 6-12 months after brand launch: Total marketing & sales spend / Total new customers
Website performance
Your website is the digital heartbeat of your brand, where it truly comes alive and interacts with your audience. In order to create a high-performing website with coherent, branded storytelling, you need to take a step back and rethink the entire user experience by reevaluating your sitemap, wireframes, and overall visual and written content.
When discussing metrics, ensure your website is connected to Google Analytics (GA) to track traffic and goals. This will provide insights into how customers interact with your website before and after a rebrand, as well as over time. This data can give you valuable insight into website structure, layout, and overall brand identity: measure traffic, user engagement, engagement time, conversions, etc. In the branding context, evaluate how these measures compare before and after the rebrand.
Social Media Engagement
If you interact with your target audience on social media platforms and post visual content on a regular basis, you can measure the effectiveness of your branding with metrics such as interactions, likes, mentions, and followers. Social media engagement can help you monitor your brand reputation, understand your customers' sentiments and feedback, and amplify your brand awareness and reach. Analyze these metrics to see if they have improved since the launch of your new brand.
Net Promoter Score
One of the most widely used methods for measuring brand loyalty is the Net Promoter Score (NPS). Most likely you have come across this KPI on several occasions without putting it into context: a simple question asking how likely you are to recommend your brand to a friend or colleague, on a scale of 0 to 10. Based on their responses, users are categorized into three groups: detractors (0-6), passives (7-8), and promoters (9-10). Next, the NPS is determined by subtracting the percentage of detractors from the percentage of promoters. A higher NPS means greater customer loyalty and engagement¹. In a branding context, evaluate if the new brand has contributed to a better NPS and the likelihood of recommendations due to an improved brand perception.
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Measure your (re)branding success
Effective branding or rebranding is not only what hits the eye; closely observe your KPIs that support your strategic branding decisions to show the effectiveness of your branding efforts. From a short-term perspective, effective branding can attract new customers, enhance their onboarding experience, and optimize web and social media performance. From a long-term brand perspective, strategic branding for startups can enhance brand loyalty, brand equity, and its respective metrics. In order to consistently grow and nurture your brand, it's essential to have a brand strategy that manifests itself through a compelling visual identity, impactful messaging, a high-quality website, and relevant brand activation.
Sources:
¹LinkedIn
²Hubspot
³SurveyMonkey