When someone steals your intellectual property or pretends to be affiliated with your brand, it hurts your company in numerous ways. For many business owners, the first thing they think of is lost sales. After all, you’ve worked hard to build up your brand and reach customers, and it’s clearly working if they’re making purchases. When those purchases accidentally go to the competition, though, your efforts are in vain.
This is a serious issue, but it could almost be worse for you if your brand is diluted when someone makes an inferior product. You know that yours is better and your customers are unhappy with the knockoffs — which you had nothing to do with — but this still harms your brand’s recognition. This is known as the cheapening or dilution of your brand and your reputation.
The customers may never know what happened
The big issue here is that customers themselves may not dig into the specifics and the details. They believe that they have purchased a genuine product. When it does not work as advertised or performs at a much lower level, they blame your brand. They have no idea they bought a product that you did not make.
If this happens often, customers may become wary of purchasing anything you make. They’ll complain about the “inconsistency” of your products or they will worry that the real products are actually fakes.
This can really harm your business if you have a luxury brand. These brands are worth so much because of the name recognition. You need people to see your products as luxurious, desirable items because that’s why people buy them — and why they pay a premium price. If the knockoff products turn your brand into a common joke or a brand that people simply do not trust, this does irreversible harm.
What can you do?
As you can see, someone copying your business or your branding does much more than just cost you in initial sales. It’s a much bigger issue than that, and it can have a financial impact for years to come. Make sure you are well aware of the steps you can take to protect the brand you have worked so hard to build.