The world of branding constantly evolves from how you can effectively boost your brand awareness to how you can reach your target audience and keep them around. However, a little something called brand equity can help you maintain your image and keep your brand in consumers’ minds. If you haven’t heard of it before, let’s dive into what it is, what are its elements, its importance and how we can effectively build brand equity.
What is Brand Equity?
Is it something related to finance? Well the short answer is no, it’s not related to finance. And the long answer is: brand equity refers to the value or perception of a certain brand. It’s what makes you think of a specific company when you see its logo or hear its name. A lot of aspects can contribute to a good brand equity. For instance, its products and their quality, its brand recognition and how it uniquely delivers what it offers. Basically, what makes it desirable and how it makes consumers feel. To get into it in more detail, let’s take a look at the different elements that make up brand equity.
Elements of Brand Equity
Brand equity encompasses several key elements such as:
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Brand Awareness
Brand awareness refers to the extent to which consumers recognize and are familiar with a brand. It’s the first step in building brand equity, as consumers can’t form preferences or trust a brand they don’t know. Basically, a brand’s reputation is built upon brand awareness. Once consumers are aware of a brand, familiarity builds and this leads to the influence of their preferences and trust. To generate said brand awareness, a brand would have to strategize how they market themselves to make them as visible as possible.
For instance, when you repeatedly see ads of a particular brand as you scroll through social media or repeatedly walk by a poster or billboard of theirs, their name or image is bound to stick in your mind. All those strategies are also a way to communicate the brand’s values to attract the right consumer.
Source: Ads of the World
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Brand Associations
Brand associations, as the name suggests, is what consumers associate your brand with, in terms of attributes, values, or characteristics. They help reflect a brand’s identity and shape how consumers perceive a brand. Depending on how consumers perceive a brand, it can differentiate and position the brand in the market, allowing it to stand out. Moreover, they create positive attitudes and feelings toward the brand, making consumers more likely to choose it over others. Brand associations also serve as the basis for brand extensions. This allows a brand to leverage its existing reputation and consumer trust when they want to introduce new products or services.
Take Google as an example, their brand equity is strong and they’re well-trusted mainly as a search engine but also for their other offerings such as Gmail and Google Assistant. These services act as a digital personal assistant and they’re perceived as reliable, accessible and user-friendly.
Source: Google Apps
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Perceived Quality
Perceived quality is a component of brand associations and it relates to how consumers perceive the quality of a brand’s products or services. Positive perceived quality, along with other associations like brand reputation and values, can significantly influence a brand’s equity. Brand associations, including the perceived quality, provide consumers with a reason to buy, whether it’s the unique features or the emotional connection they offer.
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Brand Loyalty
Brand loyalty represents the extent to which consumers are committed to a brand. This not only means when consumers are repeat buyers but also when they become brand advocates by spreading positive word-of-mouth. Loyal consumers ensure consistent revenue while fostering a sense of trust and reliability between consumers and a brand. Attracting new consumers also becomes easier when brand loyalty exists. This is because consumers love to see positive reviews or feedback from other consumers and this is what contributes to whether the brand is perceived as trustable or not.
Importance of Brand Equity
Now that we have a clear understanding of what brand equity is and what contributes to it, let’s look into why it’s important for businesses:
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Consumer Trust and Loyalty
Brand equity and consumer trust go hand in hand. When consumers trust a brand, they are more likely to become loyal, repeat buyers. Trust is what can ensure long-term relationships between a brand and its consumers. It’s the bridge that connects a brand’s promises to the actual consumer experience.
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Market Differentiation
In today’s highly competitive marketplace, standing out is a significant challenge. Brand equity helps a brand differentiate itself from the competition. When a brand has a strong and positive reputation, it becomes the obvious choice in the eyes of the consumers.
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Price Premium
Strong brand equity allows a brand to charge premium prices for its products or services. Consumers are often willing to pay more for a brand they trust and perceive as high-quality. This premium pricing not only increases revenue but also reinforces the brand’s perceived value. This is why consumers are willing to pay for an Apple iPhone rather than a more affordable yet equally good option.
Source: Apple
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Resilience During Crises
Brand equity serves as a shield during times of crisis. When a brand has built a strong relationship with its consumers, they are more forgiving when the brand encounters challenges or negative events. This resilience can sort of handle the damage and boost recovery.
How Can We Build and Nurture Brand Equity
Building and nurturing brand equity requires a strategic approach and consistent effort. Here are some key strategies:
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Consistency in Branding
Consistency in branding is one of the most crucial strategies. Brands should maintain a uniform image, messaging, and brand elements across all platforms or marketing. This consistency helps in reinforcing the brand’s identity, preventing dilution and confusion.
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Consumer Experience
Positive consumer experiences are essential for brand equity. Brands must deliver on their promises and go the extra mile to ensure consumer satisfaction. Handling complaints and feedback effectively can also turn negative experiences into positive ones. Consumers love to see brands that genuinely care for its consumer experience.
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Marketing and Advertising
Effective marketing and advertising play a significant role in building brand equity too. Strategies that promote and enhance the brand’s reputation should be devised. A few effective ways to market or advertise include storytelling and fostering emotional connections. This can create lasting impressions in consumers’ minds.
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Monitoring and Measuring
To ensure that brand equity is on the right track, it’s crucial to use metrics and key performance indicators (KPIs) to assess its growth and impact. By regularly monitoring and measuring these aspects, your brand can make data-driven adjustments to your strategies. For instance, when running Facebook Ads, we should analyse specific metrics according to the objectives you desire to get.
Bottom Line
Brand equity is more than a feeling or perception, it represents how valuable your brand is and it indirectly leads to increased revenue. By understanding the types of brand equity and recognizing its importance, businesses can strategically build and nurture their brand equity, leading to increased customer trust, market differentiation, premium pricing, and resilience during challenging times. However, if you’re still struggling to boost your brand equity, our seasoned experts at CR8 Consultancy are always ready to offer advice and consult. You can go through our services or better yet, give us a call!
Boost your brand equity today! Give us a call.