The Value of Branding: How Strong Brands Drive Loyalty & Growth

The Hidden Asset

Business owners can calculate the ROI of their sales team or their return on advertising spend (ROAS). However, few focus on calculating the value of their brand. Often when it comes to calculating a business value, 50-70% of the price tag is often brand equity. Whether you’re pitching for investment or selling your business, investors don’t just pay for physical assets or revenue, the majority of their purchase can be attributed to established branding that generates real customer loyalty and consistent revenue.

The Math Behind Brand Loyalty

Loyal customers are significantly more profitable. 

A 2025 analysis of loyalty programs shows that the average customer lifetime value (CLV) for loyalty program members is typically 15% to 40% higher than for non-members or those acquired through discount offers (Umbrex). This is because loyal customers require less support and brand reinforcement, costing less to serve. 

The acquisition cost is substantial: acquiring a new customer can cost up to 5 - 25x more than simply retaining existing loyal customers (Harvard Business Review). Unfortunately, a lot of businesses neglect this concept and instead focus too heavily on acquisition over retention to attempt to meet growth objectives. However, strong brands focus on flipping this equation to make it difficult for existing customers to leave to a competitor.

The Power of Word of Mouth Marketing

Only 25% of customers trust traditional marketing, whereas 92% trust recommendations from people they know (Nielsen). Loyalty isn’t just about retaining customers, it’s actually cost-effective for your marketing budget. Word of mouth marketing is incredibly powerful, generating high-value leads who are already convinced. This is the impact of a strong brand, loyalty drives word of mouth referral.

Referred customers have 16-25% higher retention rates and spend more than non-referred customers (Extole). This may be why Net Promoter score (how likely customers are to refer a brand) is highly correlated with growth. According to Net Promoter System: In most industries NPS explains 20% - 60% of the variation in organic growth rates amongst competitors. To summarise, a company's likelihood to be referred between peers is a powerful indicator of future growth. This can therefore, help reduce overall costs and drive business growth through wider margins. 

Premium pricing becomes sustainable

Strong brands command 10-20% price premiums without losing sales volume. Why? Because when your customers are loyal to your brand, price sensitivity drops. They trust your product or service will live up to expectations and deliver great value. 

This isn't price gouging, it’s value recognition. When consumers perceive your brand as superior, businesses can command premium pricing and increase profit margins based on the added value a strong brand provides.
 

The Cost of Weak Branding

Businesses with weak branding face constant pressure to market their products through traditional, costly channels such as TV advertising or discounts. This position causes a business to be heavily reliant on growth through paid means rather than organic customer acquisition and retention. As mentioned, weak branding isn't just about saving designer costs, it creates a chain reaction that undermines a company's real potential. 

Furthermore, without established brand loyalty and a trusting customer base, your advertising is constantly in awareness mode, rather than nurture mode. This reduces the efficiency of your marketing spend, as stated previously, customers respond more positively to advertising when they are being retained, rather than recruited. 

Without strong branding, businesses are constantly on the back foot, paying for attention a strong brand delivers for free!
 

Building a Strong Brand

Here are the top tips to developing a stronger brand to increase customer loyalty and drive business growth. For more information on how to create a strong brand, download our ultimate guide to branding here
 

Know your customer base

Don’t guess, proactively research, conduct focus groups and customer engagement to understand their problems, desires and pain points. The stronger you understand your customers, the more precisely you can serve them and demonstrate why you deserve their purchase and their loyalty. 
 

Storytelling

Develop a unique and detailed narrative surrounding your brand. This can be simplified to explaining why you do what you do and how you do it. Storytelling enhances the emotional connection between the customer base and the brand. Simply put, storytelling makes customers feel deeply when interacting with a brand, driving loyalty. Learn more about the benefits of introducing storytelling in your business by reading our full guide.
 

Craft a consistent & distinctive identity

From logo to slogan to all branded content. Your identity must be consistent across all touchpoints. Create a distinctive and cohesive identity through colour pallet, typography, imagery, tone of voice, etc. This builds strong memorability and improves brand recall.

Measuring what matters

Strong brands are not built by accident, they are crafted by monitoring, measuring and improving the following metrics: 

• Customer lifetime value (CLV) - Total profit from the entire relationship with a customer. This should be significantly higher for loyal customers. 
• Repeat Purchase Rate - This directly ties into brand strength. This is the percentage of customers who buy from you again. Improving this metric is pure profit.
• Net Promoter Score (NPS) - How likely customers would recommend you to others. This is a powerful predictor of future growth. 
• Customer acquisition Cost (CAC) - How much does it cost to acquire one customer. This should be much higher with loyal customer bases due to word of mouth. 
   

The Bottom Line

Strong brands don’t just generate sales in the short term, they build brand loyalty and trust that drives compounding growth over time. Loyal customers become your strongest advocates and most profitable assets. The question isn't whether branding is worth investing in, it’s about whether you can afford not to. 

Next Steps

Ready to take your branding to the next level and accelerate your growth? At Livewire Marketing, we help businesses strengthen their identities through our brand development services, creating consistent and powerful brands that drive real results. Contact our team today to discuss how Livewire can help your brand. Alternatively, to learn more about the importance of branding, download our FREE ultimate guide here