Major Points From the Article
The 6 elements of brand equity have a synergistic relationship
Brand Equity is important in order to grow your business
Brand Equity can increase your profit margins and market share
There are 5 steps to take in order to grow your brand equity
We are exposed to thousands of brands every day. From the clothes we wear, the car we drive, the food we eat, the music we listen to, the electronics we use, and even the services we use, such as the barista at your local cafe. Brands are everywhere and typically stamped with the brand's logo.
Building a great business isn't just about providing a great service, a great product, speedy delivery, high profit margins, high sales volumes, or good marketing. It is also about the Brand and the Brand Equity behind it. In fact, building or re-building brand equity can turn a business around.
Consider our re-building brand equity case study for Columbia Pencils
Essentially, if your customers/clients think positively about your brand, they most likely will stay with you or make repeat purchases and will be more likely to persuade others to use your services/products. This is an example of positive brand equity. Similarly, the opposite is true too. If your customers/clients think negatively about your brand, they are less likely to use your business again and are also more likely to dissuade others from using your services/products. This is an example of negative brand equity.
However, what is the value behind the brand? This is what we refer to as Brand Equity, which at its core, has 6 elements to it. AND, if you grow these elements within your business you can raise your business from being generic to a premium business, commanding higher prices (and profit margins) from your customers/clients and you can capture more market share. It can also help with extending/diversifying your products or services, as people will already trust your brand.
So what are the 6 elements of Brand Equity? 1. Brand Awareness
If you were to walk down a street and speak with 1000 people, how many would say they know your business or recognise your logo? All of them, 100 people, 1 person, none? This is the type of question you need to ask yourself when considering brand awareness. Of course, you would need to factor in if they were in your target market, but brand awareness is one of the more important elements of brand equity. Having high brand awareness helps in converting sales as it can warm up the colder part of your market to eventually buy your service or product.
2. Brand Association
It's your logo, your jingle, your brand colours, and more... and what people associate with your brand. Take for example Hyatt Hotels, they are associated with luxury and comfort; BMW is associated with sophistication, fun driving, and superior engineering.
Brand association is anything that is deep-seated in your customer's mind about your brand and should be associated with something positive so your customers will also relate your brand to being positive. What is your brand associated with?
3. Perceived Quality
Does the product break all the time or is it durable to last decades?
Is your service slow, unreliable, and difficult to use, or is it fast, reliable and easy?
Regardless if it is or isn't, what do your customers or clients think about your product or service?
The perceived quality is your customer's perception of the overall quality or superiority of a product or service with respect to how it is used and the alternatives on the market.
4. Brand Experience
Brand Experience is a form of experiential marketing that incorporates a holistic set of conditions created by a business to influence the feeling a customer has about a particular product or service. A clear example of this is when you visit a retail store. The goal of the business is they want you to be in the store as long as possible as this will encourage you to make a purchase or make you feel welcome so you will want to return later. They accomplish this in many ways, but also with music... and music their customer demographic enjoys. It is subtle but it works in inspiring good feelings to those just browsing or considering to buy. Just think about when you have been out somewhere and the music stops or it is dead silent. You noticed because it created an unsettled feeling.
Another very simple brand experience used in the service industry is smiling. The projected positivity it creates makes the customer feel welcome and wanting to return.
5. Brand Preference
Let's imagine a product and there were five options from five different businesses. Each product has the same price and it does exactly the same thing. How would you choose which of the five products you would buy? You would consider the brand, right... as this is the only other considerable difference between the products that will help you make the decision. This is what we call brand preference and is a reflection of customer loyalty, successful marketing tactics, and brand strength.
6. Brand Loyalty
This is related to the consumer's behaviour and their tendency to continuously purchase one brand's product over another and is created by the business's capability to foster trusting relationships with its consumers. How often have you stayed with a brand, even though there is a cheaper option on the market?
So let's increase your brand equity...
You may have noticed reading this that some core elements overlap a little and this is because there is a synergistic relationship across the elements; one cannot grow without the other one following or growing too, otherwise, it will significantly impede them all.
How to Raise your Brand Equity?
Step 1: Consider your brand story. What story does your brand tell or need to tell in order to achieve the outcome you want. Once you have established that create...
Step 2: Consistent story. Make sure wherever your brand is seen that the story is consistent. If you are a high-end service then everyone within the business must provide the high-end service, and consistently.
Step 3: Push the brand. Once the story has been built and your story is consistent, increasing your brand awareness will elevate the business. Be it on your website, social media, news websites and more. What you do must be associated with your brand to help grow your brand equity.
Step 4: Feedback. To prevent myopic thinking seek feedback from your customers and clients on how they feel about your products and/or services. This will allow you to address issues and correct them.
Step 5: Build a relationship with your customers and clients. If they love you and what you do they won't leave you for your competitors.
Why is it Important?
Brand Equity helps in growing market share and in turn, this means higher profits and revenue. Even further it can make cold leads easier to convert, meaning higher sales for your business. If you are planning to grow your business or sell to exit, brand equity is important with real tangible value.
Just consider Vegemite, invented in 1922. Some will say it's disgusting, and others will say it is great and healthy, however, no matter what people say, Australians know what it is, have tasted it and we encourage our children and foreign friends to try it. It has very strong Brand Equity and this translated into real tangible value in 2017 when Australian Bega Cheese Group purchased Vegemite for $460 million USD. It's a recipe, logo, and name... but with exceptionally valuable brand equity behind it.
Brand equity will help elevate your business and will allow you to increase profit margins, increase sales, and win against your competitors. How good is your brand equity?
Within Emergent Works business growth services, we provide strategies to increase your brand equity and marketing campaign management services to strengthen the process. To get assistance with your business, simply email us at email@example.com or schedule a no-obligation discovery call here.