Profitable Brands

As mentioned in our The Price is Right article, with great power comes great responsibility. As a strong brand you will realize profits due to your inherent pricing power. (See our article on Pricing Power to understand how it will make you more profitable)

First off, “profit” gets viewed as evil in some audiences. Obviously, this comes from skewed perspectives that have been jaded by a company wrongfully taking advantage of consumers and/or production. This naturally entails lying, cheating, negligence, etc. That unfortunately has tarnished “profit” simply due to association. This is bad profit.

Second, there is good profit. This is additional margin generated due to your excellence in performance and value creation. This is the profit we love. This is what allows brands like Disney, Apple, Costco, and others to go above and beyond in your experience with them. These types of profitable brands have increased their perceived value through their brands (our perception of them).

Now that we have clarified good profit from bad profit, let’s talk about why being profitable (the good kind) is a win-win. The beauty of having a profitable brand is that your business is generating extra cash flow due to the deserved increase of perceived value. Why is it deserved? This is because an increase in perceived value is warranted to having a cohesive, and well thought-out brand. This type of brand takes hard work, strategy, creativity, risk and discipline – elements that often translate to reward (cha-ching).

Profitable Brands Can Invest Back Into The Business

You see, as extra cash flow comes in you can invest even more back into the business. Here’s a couple ways this can be done:

It’s very much like compound interest. As you can imagine by doing these types of investments with a portion of your newly generated profits will create momentum that will further the profitability by these increasing the overall value even more so.

This is how brands like Apple (AKA one of the most profitable companies ever created) gain such a lead on the competition. Their entire experience from head to toe is at such a refined state due to these on-going investments back into the business and brand experience.

Good profit can be very beneficial for not only the business, but the team and buyer as well. As we’ve said before, with great power comes great responsibility. Being a brand that your audience looks to for guidance, recommendations, solutions, and more is a very big responsibility.