How Important is a Brand?

How Important is a Brand?

by: Rob Reed

Across all categories, research shows people are willing to pay nine to twelve percent higher prices, on average, for a brand they know and trust when compared to brands in which they may not be as familiar.

This information has obvious ramifications if you’re a seller. If you offer a buyer the incumbent product and have established a trusted relationship, the need to compete on price will be less critical and you may be able to maintain greater margins.

On the other hand, if you’re trying to win against an incumbent, there are a few things you should first consider:

  1. You may need to offer a significant cost advantage versus the incumbent in order to convince the buyer to change vendors.
  2. It may be a solid strategy to identify buyers within the organization where the incumbent does not have strong or trusted relationships, and then work on developing trust with those individuals in order to counterbalance what the incumbent seller has already established.