Brands are corporate assets – and among the most valuable. It is estimated that, of the brands in the S&P 500, 30% of their market value is attributed to their brands. Everyone knows that you pay more for a branded shirt than a non-branded shirt. But beyond the balance sheet, brands are important tools for businesses to use in meeting strategic goals.

Here are 10 ways a strong brand can benefit your company:

  1. Competitive advantage. Your brand may well be your only enduring source of unique and sustainable competitive advantage. And this is truer today than ever. In a time with increasing product and service offerings, with less and less differentiation, your brand gives consumers a reason to choose you.

  2. Customer-relevant expressions of your business strategy. Your brand tells the world about your business, why you do what you do – and the values that underpin all of your actions.

  3. Meaningful and valued relationships. Beyond preference, brands represent trust and create loyalty. And customer loyalty helps to insulate your business against competitive inroads such as promotions, discounting and bundling.

  4. Recommendations and referrals. As a corollary to #3 above, when customers are loyal to your brand, they are more likely to recommend and refer you to others. Because they trust their brand, they are willing to put themselves forward for you.

  5. Facilitate growth. An existing brand that is strong and well defined can help you expand into new markets, new categories, new usage occasions, new channels, and new segments. Brand expansion and extension is a proven growth strategy to leverage your brand assets.

  6. Rallying force for aligning employee efforts. Brands let all of your employees march in the same direction and sing from the same song sheet. And, as human beings, when all things are equal, we would rather work for the stronger brand than for the weaker. So having a strong brand can actually help you attract a better pool of employees.

  7. Differentiate a commodity. Russell Hanlin, former CEO of Sunkist Growers, once said, “An orange…is an orange…is an orange.  Unless, of course that orange happens to be a Sunkist, a name 80% of consumers know and trust.” Sunkist oranges may or may not be any different from other oranges, but the consumer believes they are better – and that’s all that matters. If you market a commodity, branding is one way to avoid being reduced to price-focused competition.

  8. Price premium. Try this experiment. Go to the Dunkin’ Donuts drive through and buy a large latte. Then do the same at Starbucks. How much more did you spend for your Starbuck’s latte than your Dunkin’ Donuts latte? (Last time we tried this, it was $ .62 on a $4.00 drink or a premium of 16%.)

  9. Sell more at lower cost. A strong brand with loyal customers can count on a certain level of trial for new products and repeat sales for existing products. Loyal customers do not necessarily need to be motivated by promotions, advertising, and other marketing programs, making sales to loyal customers very cost-effective.

  10. Create clarity and focus. Have you ever worked in an organization where the brands were not well defined? There are a lot of meetings to decide what the brands mean, with little or no progress. Or, everyone defines the brand as they see fit, further confusing the organization and the marketplace. Brands create indisputable clarity and focus – and deliver greater operational efficiency.

Brands are built by a strong definition, a clear differentiation, a specific target audience, repetition, and consistent delivery. Without a strong, well-defined brand, you cannot be effective in the marketplace. And don’t forget: if you don’t define your brand, the market will define it for you. And you might not be happy with what they decide!