You may have one or several reasons for considering a branding exercise for your community.

Are you losing business from your own residents to neighboring towns and regions?

Branding, in concert with rejuvenating tired downtowns, can bring local residents back to the heart of communities and regions, because these areas reinvent themselves as "destinations" that appeal to both visitors and locals, offering key attractions, destination shopping and dining, all in a setting that is pedestrian-friendly and provides the animation and amenities they want.
Do you want to refocus away from some negative aspect of your destination?

If your region or town has no real image or a negative image in the mind of locals and visitors, then a new brand can divert their attention.  It is often the case that introducing an alternative image is much more effective than addressing a negative image head-on.
Is your tax base is eroding?

If your downtowns have empty storefronts, tattoo parlors and check cashing stores, your buildings are probably in disrepair and your tax base has fled to the big box stores next to the freeway. Branding will give you a central vision and concentrate efforts in building the critical mass of downtown districts that will bring in new retailers, and increase the local tax base.
Perhaps you want to bring your region or community together using a unifying vision.

If nothing gets done in your community because no one can agree on what to do, then you need a "big idea" that everyone can buy into. Branding your community can provide that "big idea" that is compelling enough to excite the locals and point them all in one direction.