Influence of Branding on Pricing

Something strange is happening in B2B buying. Deals are being won and lost before sales calls even happen. Not because of features. Not because of price. But because of something most B2B companies barely think about. Dentsu's massive 2024 B2B buyer study - over 14,000 interviews - reveals a shift that's rewriting the rules of how enterprise software gets purchased. And most companies are completely unprepared for it. The shift? Brand marketing now drives more revenue than most companies realize. And the ROI is measurable, predictable, and massive. B2B buyers only evaluate 2-5 vendors on average, according to TrustRadius's 2024 B2B Buying Disconnect Report. That's it. Once you make that shortlist, you have a 71% chance the buyer sticks with their initial favorite. The entire "evaluation process" often just validates a choice they've already made. But here's the ROI kicker: TrustRadius found 78% of buyers select products they've heard of before starting their research. Forrester's Business Trust survey found 77% of purchase influencers consider a vendor's brand awareness as a key factor in whether they trust that organization. The revenue impact? Forrester found 83% of B2B influencers who trust a supplier plan to continue doing business with them. That's not just win rate - that's lifetime value. The LinkedIn B2B Institute and Ipsos research confirms the pricing power: buyers explicitly state they'll pay premiums for trusted brands because it mitigates risk in complex B2B deals. Brand marketing doesn't just win deals. It wins them at higher prices with better retention. Brand marketing isn't a cost center - it's a revenue multiplier. When 78% of buyers choose from brands they already know, awareness directly equals pipeline. Yet only ~30% of B2B marketing budgets go to brand. We're investing backwards. Meanwhile, 68% of buyers say all vendors sound identical (Dentsu). And every $1 cut from brand investment costs $1.85 to rebuild (BCG). Smart companies track brand perception religiously. They know which buying situations trigger their brand. They measure if messages actually change perception. But 79% of CFOs see no clear metrics connecting brand to revenue. Because most companies guess instead of measure. You should do brand tracking at minimum once a year. You can run one with Wynter and gets results in 2 days https://lnkd.in/dV2umFPy

If you don’t think brand & marketing affect EBITDA, you’re not paying attention. Worse—you’re leaving money on the table & wondering why your growth stalled. Great marketing isn't expensive. Bad marketing is. Brand isn’t a cost. It’s a multiplier. Brand is just a perception, & perception will match reality over time. Sometimes it's ahead, other times, behind. Brand is simply a collective impression some have about a product.” — Elon Musk Translation? If you’re not shaping perception through brand & marketing, someone else is—& they’re probably doing it better than you. Stop pretending brand is fluff. Brand is money. Marketing is leverage. When done right, they don’t just create awareness—they drive revenue, reduce costs, & increase margins. Translation: They improve EBITDA. “Your brand is the single most important investment you can make in your business.” — Steve Forbes, Chairman and Editor-in-Chief, Forbes Media 1. Strong Brand = Pricing Power Brand drives perception. Perception drives value. Value lets you charge more. When you build trust and credibility, people pay a premium. Look at Apple, Nike, Patagonia. You’re not paying for the product—you’re paying for the brand story. “If people believe they share values with a company, they will stay loyal to the brand.” — Howard Schultz, Former CEO, Starbucks Stronger brand = higher prices = more gross profit per sale = better EBITDA. Simple math. 2. Marketing Fuels Efficient Revenue Growth Good marketing shortens sales cycles. It educates the customer before a human ever talks to them. That saves on sales team headcount, lowers cost of acquisition (CAC), and boosts conversion rates. A McKinsey study showed companies with strong brands outperform the market by 73% in terms of financial return. The silent math: More efficient revenue generation = less cost per sale = higher margins = stronger EBITDA. 3. Brand Reduces Talent Acquisition Costs Marketing is just for sales? Wrong. When your brand is strong, people want to work for you. Glassdoor found that companies with strong employer brands see 50% more qualified applicants and cost-per-hire drops by 43%. 4. Marketing Defends & Expands Market Share Markets shift. Competitors pop up. AI eats your lunch. The only moat that can’t be copied is trust. Trust lives in the brand. Good marketing reinforces your positioning before a crisis hits. It builds loyalty. In bad times? Brand is what keeps your customers from bailing. “Brand is what people say about you when you’re not in the room.” — Jeff Bezos, Founder, Amazon 5. Investors Pay More for Brand Equity You want higher valuation? Build brand equity. Private equity firms, acquirers, & Wall Street love a sticky customer base with premium margins. You don’t get that w/o marketing & brand strategy. Look at any company trading at a premium. It’s not just because of the books—it’s the moat. That’s value baked into EBITDA multiples—because a strong brand gives predictable, repeatable revenue.

The financial case for brand strategy: Why CFOs should care. Branding isn’t just about looking good.* It drives real financial impact (* if done strategically) Yet, many companies still see it as a cost rather than an asset that increases enterprise value, reduces waste, and boosts profitability. Here’s what most businesses get wrong: - They see branding as expense, not an investment. - They focus on short-term lead generation over long-term equity. - They underestimate how much a strong brand lowers acquisition costs, improves pricing, reduces churn and attracts talent. Here’s how: 01 - Brand Strategy Increases Market Value: Brands are intangible, but they drive real financial value. Today, 80–85% of the S&P 500’s market value comes from intangibles like brand equity. Corporate reputation alone is worth $16 trillion globally. Companies with strong brands deliver 2× higher shareholder returns over 20 years than the MSCI World Index. Why? A strong brand builds trust, reduces risk, and increases pricing, partnerships, and M&A leverage. 02 - A Strong Brand Lowers Marketing Costs: Weak brands must pay to be noticed, they have to keep buying attention…spending millions on ads and lead gen. Strong brands generate attention. Tesla, for example, spends $0 on traditional ads, while competitors spend $495 per vehicle sold. Tesla’s brand, combined with a touch of Elon, drives WOM, earned media, and loyalty...saving hundreds of millions in marketing costs. (And yes, I know it works both ways, for better or worse) 03 - Branding Improves Profit Margins & Pricing Power: A strong brand lets you charge premium prices and avoid price wars. Apple sells iPhones at 40%+ gross margins, while competitors struggle, even with similar hardware. Why? Customers aren’t just buying a product, they’re buying into a brand. Data shows: - Consumers pay 11% more for trusted brands. - Brand-loyal customers pay 38% more, even price-sensitive ones pay 14% more. - Without strong branding, companies must compete on price alone. 04 - Strong Brands Retain Customers Longer: Retention is one of the biggest profitability drivers. It costs 5× more to acquire a new customer than to retain one. A 5% increase in retention boosts profits by 25–95%. Brand loyalty reduces churn, increases lifetime value, and creates repeat buyers without ads spend. 05 - Resilient Brands Outperform in Crises: In downturns, weak brands suffer revenue losses and resort to discounting. Strong brands hold their value & recover faster. During 2020, while most businesses struggled, the top 100 most valuable brands grew by +5.9%. A well-built brand acts as financial insulation, stabilising revenue. The Hard Truth: A strong brand isn’t a luxury, it’s a financial strategy. If your CFO still sees branding as a cost center, send them this. Sources: McKinsey, Interbrand, BrandZ, Bain & Company, Nielsen, Kantar, Invesp, Unilever, Tesla, industry reports on brand valuation, CAC, and shareholder returns.

I’ve heard CFOs and CEOs say brand marketing is unaccountable, expensive, and risky. That's because they struggle to prove the real financial impact of brand marketing. That's why we need to shift the conversation to measurable business outcomes like: ✔️ Cutting discounts ✔️ Driving high-margin organic traffic, and ✔️ Expanding into profitable channels like wholesale --------------------------------- Here's how you can do it: → 1. Position brand marketing as a driver of sustainable profitability The real goal isn’t just awareness—it’s pricing power. For example: If you reduce discounts without losing customers, you boost margins. Understanding and tracking pricing power is critical to long-term profitability. → 2. Track key indicators of brand-driven demand Brand-building campaigns should increase: ✔️ Branded organic searches ✔️ Repeat visits These are two clear signals of healthy, long-term demand. → 3. Measure brand-driven expansion into profitable channels A strong brand doesn’t just improve direct sales—it can open new revenue streams like: ✔️ Wholesale ✔️ Partnerships, and ✔️ Premium product lines At Lifesight, we help brands tie these outcomes back to their marketing spend, showing exactly how brand efforts move the financial needle. Bottom line? When CFOs see tangible results like higher margins and stable new channels... ...brand marketing stops being risky and starts delivering real business value. --------------------------------- How are you proving the financial impact of brand marketing?

In early-stage consumer brands, pricing power is earned, not declared. Founders often assume that loyal customers will automatically absorb a price hike. They forget that loyalty is fragile when substitutes are easy. Brands that invest early in trust through product quality, authenticity and consistency earn the right to command premiums later. Pricing power is an output. It reflects years of brand building, not months of marketing. If you have to explain why you raised prices, you probably have not built enough value yet. #india #startups #strategy #pricing #finance