How Branding Impacts Customer Purchase Decisions


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We talk about company brand so much in the world of marketing that the word can start to feel slightly meaningless. Every business has a brand, every business focuses on its brand, every executive knows that keeping the brand intact is a crucial piece of customer loyalty and retention.

But the word has become so common that we rarely talk about how exactly brand identity contributes to when customers decide to make a purchase – and when they decide to avoid a company.

Customers may make a purchase – or not – based on company behavior

Social media has changed the landscape for businesses. When a business makes a mistake – reacting poorly to a customer based on the customer’s marginalization, having a high-profile customer displeased with a product, or simply consistently being a jerk on social media – customers often react swiftly and decisively.

Hearing social media followers calling for a boycott is commonplace, and it’s rare that large scale boycotts are organized against national companies. But for smaller companies that depend on niche markets, it only takes losing a handful of customers to start to feel pressure to change their behavior.

Companies that want to succeed keep an eye on their social media, make sure to keep their customer service top notch to manage and mitigate any situations that do arise, and make sure to be honest and transparent when they fix the mistakes that inevitably occur.

Customers may identify with the story the brand tells

Stories are a huge part of brand identity. When we identify with a brand, what we’re really identifying with is what that brand tells us about ourselves. A certain type of person shops at Target, gets coffee at an independent coffeeshop instead of Starbucks, and goes online to buy from a big online retailer instead of heading out to their local market.

Companies need to think about their updated brand identity in terms of the stories they’re telling. The story should resonate with what the business knows about their ideal customer. For example, if a brand identity revolves around being a young, hip twenty-something but the ideal customer is a new mom in her thirties, there’s going to be a mismatch that will negatively affect business.

Customers may react more positively when they hear about a brand from friends

Social media is the new word of mouth, and customers love to talk. When a customer, especially a woman, needs a recommendation on anything from a service to a product, the tendency is to ask on social media. Friends will comment on what products and companies have worked for them – and which ones haven’t. These reactions are crucial for businesses.

The marketplace is full of alternatives to everything, and choice fatigue can set in very quickly. The simpler solution is to ask for opinions from experts – ask moms about strollers, ask swimmers about athletic swimsuits, ask makeup fans about particular brands or palettes – and then follow them.

This is one reason businesses need to work hard to create influencers in the marketplace, officially or not. Companies can make it easy to share purchases or reviews, encourage customers to tell their stories, and offer referral rewards for new customers. All of these strategies can make it more likely that a potential new customer will approach a brand with a positive mindset.

Customers may react positively – or negatively – due to relationships between brands

In a marketplace where businesses regularly partner up and create cross-promotions between companies, it’s important for businesses to consider what the relationship will look like to a customer.

If a company that prides itself on being low waste, for example, partners with a company that regularly uses disposable products and has a reputation for being wasteful, that partnership can be a disaster. This can be a problem even if the two companies on the surface look like a perfect match!

When considering this sort of relationship, it’s often a good idea to talk to customers themselves and get an idea of what they think of potential partnerships. Surveys, direct feedback, and A and B trials can all help determine what will get the best customer reactions.

Building a brand identity takes a lot of conscious work on the part of many different segments of a business. Knowing that the perception of a brand is going to have a significant impact on how customers make purchase decisions shows just how important a brand is. When companies start from their brand identity and then build outward to create online presence, customer service experiences, and more, they often find that their customers make more positive purchasing decisions over time.

Margarita Hakobyan
CEO and founder of, an online marketplace of local moving companies and storage facilities. Business women, wife and mother of two with bachelor's degree from the University of Utah with a concentration in International Studies and a Masters Degree also from the University of Utah with a degree in International business.


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