In the article A rock-solid hospitality brand, why? it becomes clear that branding is a hugely important investment. It affects the image you project as a business and thus determines whether you will connect with your target audience. Yet it is difficult to actually understand what branding will give you financially. An image is subjective and the results won't add up overnight. How do you know if your branding leads to success? And what does it get you in concrete terms?
Hospitality owners are constantly concerned with balancing costs and benefits. This is not surprising; investments are there to make money, in the short or long term. The latter applies to the investment you make in branding, a sustainable investment that will pay off especially in the future. From research [1] has shown that successful branding can generate as much as twice the profit. Where does that money come from?
1. Name recognition
Talk about a striking appearance. Not only that of the handsome neighbor, also that of successful companies. By using a recognizable brand identity and certain colors, the attention of a large group of people will be attracted and curiosity will be aroused. This leads to an increase in your brand awareness.
A good example of a company that has gained a lot of brand awareness this way is Coolblue [2]. They transport their stuff in eye-catching blue-orange buses, which often feature a statement in their quirky tone-of-voice. "Bus. Right." Striking, recognizable and inviting to take a second look.
At a later stage, name recognition will lead to prominence in the potential guest's mind: you will become top-of-mind. This is how you ensure that this guest walks into your place next time.
"Out for a bite tonight? Let's go to the Brown Horse!"
Especially in times when supply exceeds demand, name recognition is essential to attract new guests.
2. Higher prices through total experience
Moreover, good branding contributes to the overall guest experience. Total experience is enormously important within hospitality 2.0 and guests nowadays expect every one of their senses to be stimulated. This emergence of total experience is not only reflected within the four walls of a hospitality business, but in every moment of contact between hospitality and guest, off- and online. In this way, branding can influence the entire customer journey.
One catering establishment that capitalizes on this trend all too well is catering establishment The Daltons. In every contact moment with the guest, they provide a true 'Daltons' experience, known from the comic strips of Lucky Luke. Hamburgers are named after Western heroes, hot dogs have names of cities in West America and when you walk into the establishment, you feel like you are in a real western saloon . Eyes a little bigger than your stomach? Then get a genuine western takeaway package.
Most expensive hamburger in the world | "The Golden Boy" from The Daltons in Voorthuizen.
The benefit for the catering business itself, lies mainly in the prices. When you create a total experience, you can charge more for your products. After all, guests are willing to pay more for a tasty dish when they feel they are part of an experience. Indeed, as hospitality hero Wouter Verkerk once stated:
"Guests mainly pay for what's not on the bill." [3]
Time to invest in service, added value and experience, then!
3. Loyal guests
Once a concept has captured a distinctive place in the guest's mind, the relationship-building moment begins. This is the moment when guests become loyal to your brand and transform into true fans. They will return to you from then on and even recommend their friends, family and neighbors to check out your business as well.
"Having a bite to eat out tonight? You should really go to the Brown Horse!"
Higher prices, combined with a growing number of new and returning guests, will ultimately ensure that your sales will grow. The word "eventually" is very important here, given that this is a long-term investment. So, in the long run, you will only see a clear result of the investment in branding. However, a direct ROI calculation for branding is difficult and often 'wet finger work'. However, software programs working on making this data more and more transparent. So keep an eye on it!
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Source reference:
[1] The Underlying Dimensions of Brand Orientation and its Impact on Financial Performance, Gromark & Melin. Accessed September 14, 2022. https://www.researchgate.net/publication/263114286_The_Underlying_Dimensions_of_Brand_Orientation_and_its_Impact_on_Financial_Performance [2] Coolblue knows exactly why it has such a good brand image, Marketingfacts. Accessed September 14, 2022. https://www.marketingfacts.nl/berichten/coolblue-weet-precies-waarom-het-zon-goed-merkimago-heeft/
[3] Guests pay mostly for what's not on the bill!", Wouter Verkerk. Accessed September 14, 2022. https://wouterverkerk.nl/gastvrijheid/gasten-betalen-vooral-voor-wat-er-niet-op-de-rekening-staat/
