The business world has gone through some serious transformations in the past decade. With the inclusion of Fintech, AI, and other new advancements, the world of branding and marketing has also changed.
Businesses are deploying various business strategies to maximize reach and ROI. However, the main segmentation you’ll encounter is the choice between building a brand vs. paid acquisition.
Both these approaches have pros and cons, but which is better? It can be a fairly challenging question, leading to complications. Most new businesses reaching out to public relations firms Chicago have little idea of what should suit them.
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Building a Brand vs. Paid Acquisition: Which Is Best For Your Business?
As professionals, it’s the PR firm’s job to decide for the customers. If you face the same issue as a business owner, this article is for you. We’ll start by discussing what building a brand is, followed by paid acquisition. Finally, we’ll analyze both, giving our verdict.
What is Building a Brand?
Building a brand is a long-term approach focusing on marketing brand offerings for higher sales and a better market reputation. It is a classic approach and has helped businesses grow to success effectively. It may also intend to connect with the audience better to improve the following brand-related entities:
- Brand Personality
- Brand Image
- Brand Identity
- Brand Culture
Building a brand typically takes longer than other approaches in the marketing domain. However, it is better in the long run—(More on this ahead)
What is a Paid Acquisition?
Paid acquisition is a relatively newer approach in which business owners use paid marketing channels and mediums to acquire more customers. It is a method for advertising brand offerings inorganically for quicker results. Paid acquisitions are quicker and more effective for newer brands emerging in their respective industries.
Both approaches we have discussed have pros and cons, which can help businesses decide. Let’s have a comprehensive discussion on the two, including their pros and cons.
Pros of Building a Brand
Building a brand is traditional approach businesses have used for centuries. These methods have benefits that you should know about. Some primary benefits of the brand building include:
1. Customer Recognition
Having recognized brands is a staple for a successful business venture. Many brands, like Unilever, Microsoft, Apple, etc., have created a brand identity that has increased customer recognition. If you visit Apple’s official website, they hardly write any content.
It’s because the brand has moved past the “marketing phase” and has a built brand. Customers purchase their products, even if Apple doesn’t showcase the features a lot.
2. Improved Customer Loyalty
Customers that trust a brand are likelier to stay loyal to it. For instance, those who drive a Benz or a BMW will likely not admire another vehicle the same. These brands may have spent more time to create this customer loyalty, but it has rewarded them well in the long run.
3. Quicker Roll of New Products
When a brand like Samsung or Lamborghini introduces a new market product, they don’t have to worry about customers finding out about it. Instead, their consumer base takes great interest in new product rollouts without overthinking.
Cons of Building a Brand
Like other approaches, building a brand has some drawbacks too. Here’s a quick breakdown:
1. Time-Consuming
The biggest con of building a brand is that it requires a lot of time. Brands spend an average of a decade on creating a substantial brand image.
The time can increase if there are more competitors, changes in market trends, or other issues. Brands have to put in more time and resources, which can be problematic if competitors respond more quickly.
2. Limited Quality Flexibility
During the development phase of a brand—consistency is key. For instance, if you’re selling a beverage or a food item with changing flavor every month, the audience will not recognize or like it. Therefore, brands like Coca-Cola have worked hard to preserve their taste for decades.
3. High Development Cost
During the building phase, a company spends more on the brand that it receives. If done correctly, the ROI is pretty well-rewarding. However, you will need extra cash flow during the developmental phase. Remember, higher costs will also minimize your brand’s profitability.
Pros of Paid Acquisition
Acquiring a pre-existing brand and giving it a new direction is equally popular. It offers several benefits that include:
1. Budget Management
Paid acquisition saves the brand owners from the setup phase and provides them with pre-deployed systems. The professionals have to manage these systems, cut operational costs where possible, and ensure budget management. It’s a more straightforward approach and offers better benefits.
2. Growth Hacking
Tapping into the growth of a business is complicated in the case of a competitive industry. With the paid acquisition, you can increase consumers and ensure your brand gets the exposure and growth it deserves.
3. Loyal Users
The paid acquisition ensures the right audiences see your product, increasing conversion chances. It also increases the chances of the customers returning to your brand again, contributing to higher loyalty.
Cons of Paid Acquisition
Paid acquisition of customers may seem like a joyride, but it also has its share of challenges you should know about.
1. Cultural Clashes
A paid acquisition of customers or a brand can lead to a cultural clash because the way you see the business may differ. It can cause internal issues, leading to production or performance hindrances in the long run.
2. Objective Issues
Every venture has some business-related objective that gives it direction. However, acquiring customers or brands with money can complicate these objectives. There’s no telling what kind of audiences might come to your business, increasing issues.
3. Brand Damage
Brand and customer-paid acquisitions can complicate the existing brand systems. Audiences might not always convert positively with paid marketing, which can damage the brand. It can raise questions about the brand’s values, leading to long-term reputation compromise.
Building a Brand vs. Paid Acquisition: Final Verdict
Building a brand vs. paid acquisitions both have their pros and cons that business owners should consider. The right approach for your venture depends on your company’s objectives. Therefore, we recommend trying both these approaches and learning what works better for you.
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