Suppose you are looking for an economical phone. Will you go for the latest iPhone? No, right? But what if you are looking for a phone that is targeted for a specific market or that offers better customer experience than any budget phone? In this case, your first choice might well be the latest iPhone even if it’s quite expensive. The attraction that people feel towards a particular brand is known as brand equity.
Let us elaborate on what brand equity means. Knowing what brand equity is will help us in understanding why it is important and how to achieve it.
What is brand equity?
There are hundreds of thousands of companies. Not every company is a brand. There are some companies that are perceived differently by the customers. Some brands are there that has more emotional appeal than other brands. The appeal that each of the brands gets from its customers is known as brand equity. Brand equity is generally applied to businesses. However, in some cases, it can also be associated with a particular product.
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If you want to know more about your brand equity, it is better that you carry on with surveying your targeted customers. Whether your customers find your brand to be trustworthy or if they are familiar with your brand can be known through surveying. Social media is a great place to start with the survey to know what position your brand stands in. however, there is one thing that you should remember. Don’t get confused between branding and marketing. The focus of branding is to increase brand awareness, recognition of the brand and establishing brand equity. On the contrary to this, marketing is about increasing conversion rate that drives sales.
What is the importance of brand equity?
Brand equity is important for your business because it helps your business by making it recognizable to your customers. As a result, their purchase decision is influenced by your brand equity. Brand equity helps your business grow as you don’t have to spend as much in sales anymore and yet the customers invest in your products because they trust your brand.
And as people become more familiar with your brand and products, they tend to come back to your brand whenever they need something that you offer. To get started with building your brand equity, you fist need to measure your brand equity. So let’s get into finding the ways of measuring brand equity.
Measuring brand equity:
If you don’t know what your brand equity is, how will you set a benchmark that will help you in improving the same? So, let us find out the different ways that can help you in measuring your brand equity.
- Brand awareness: brand awareness is the first step to brand equity. If people don’t know what your brand is about, there is no way they are going to invest in your products or services. However, what is better than people knowing and recognizing your brand? Let me help you out. The best thing is when your target audience can’t have a conversation without mentioning your brand name when they are speaking about your industry.
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One of the most effective ways of measuring brand awareness is through ‘conversation share’. Conversation share is counting the number of times your brand name is being used by your target audience on an everyday basis. You can check out forums or survey groups, social media mentions with or without hashtags, search volume for your products or services or brand, your website traffic etc.
- Customer preference: Believe me when I say that customer preference is very important when you are measuring your brand equity. Preference is something for which customers can even travel to a certain place to get hold of the products that they wish to purchase. Do your customers agree with the fact that your product provides uniqueness?
Are your products easily available to your customers? Are your customers willing to pay higher than your competitors for your products or services? Are your customers loyal towards your brand? Answering these questions will give you a rough idea about the preferences of our customers.
- Financial standard: Your sales performance can tell you more about what your brand’s financial standard is. There are certain indicators that you need to check out. The average transaction value for your products, the average lifetime of each of the customers, the rate of your growth sustainability, the price premium over your competitors – these are the factors that can help you in measuring the financial standard. Is each of these standards increasing in number? Well, you are on the right track then.
Apart from the three metrics above, there are also some other segments that can help you in measuring your brand equity. If you offer your product or service through distribution channel, your local representatives play an important part in shaping your brand equity. How your customers perceive your product or service will largely depend on the experience they have in local outlets. You can check out focus groups, have surveys, check out the rate of adoption of your product or service, etc. to measure how the local market is performing for your brand equity.
Similarly, there are output metrics, competition metrics that help you in measuring the rate of customer acquisition or sales lift or sales on products that are promoted by your company etc.
How can you build brand equity?
If you ask me the question above, my answer will be – through customer interaction. It means that every small interaction that you have with your customers will help in building your brand equity. Now, the term interaction can be used multiple ways. Suppose you are promoting your brand through advertising – be it digital or physical. While that is creating brand awareness, the way your local marketers support your brand also plays a role in building your brand equity.
To be specific, every in-the-shop experience along with the outbound communication that your customers have is responsible for building your brand equity. There are two ways that you can build brand equity for your company.
- Building a brand on a national level: The brand managers that you have mostly don’t have any control over execution of local marketing. However, these managers can control the way your brand performs on national level. If you use conventional methodologies that are known to provide best results in marketing, chances are that your brand will be known as a brand in national market.
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As a part of your national level branding campaigns you can get started with telling your brand story. You can also take feedback from your customers on national level to improve the messaging of your brand. This is the perfect time to improve the positioning of your brand as well. No matter what you do, your target should be to maintain consistency when it comes to creating campaigns. These steps are small steps but will provide you great results in creating brand equity if followed religiously.
- Improvement of local market performance: So, let’s assume that you have done your national level campaigns and have started to gain the attention of your target audience. People see your commercials on television channels and they visit the store to buy your product. Now, their in-store experience will play a huge role in deciding our brand equity. If your customers will get warm and welcoming experience in the store, the customer will instantly feel connected with your brand. So, it is extremely important to pay attention to how your management team performs when it comes to providing good customer experience.
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The next thing that you should keep in mind is to provide good user experience. By user experience I mean that people should not only be satisfied while using your product or service. There are many companies that are performing satisfactorily. So, make sure you provide something extra, something more than just satisfactory performance. If you are selling body soap, you can come up with a better packaging or fragrances that no other companies are offering. Whatever you do, make sure that you keep on offering excellent service in the store so that the user expectations get fulfilled in reality.
- Innovate without being irrelevant: There is one thing that can play totally contradictory roles in your business. The one thing is being repetitive. If you keep on releasing same product or service over and over again, you may just bore your customers to death! Similarly, if you don’t repeat your products or services and launch a new product or service every once in a while, you will never gain the trust of your customers. So, what can you do? If your answer is to maintain balance, you are absolutely right.
You have to strike the absolute balance in being innovative and being repetitive. As I mentioned already, coming up with new product or service routinely will leave your customers confused about your brand. On the other hand, you also have to keep on innovating something new in the same category to make sure that your customers don’t get bored.
Do you need help?
Building brand equity is important for any and every business no matter how small or big it is. If you want to make your brand recognizable, you should get started with building brand equity. There are different ways that you can apply to get started with building brand equity. But before getting started, it is always best to measure where your brand stands in the market. The process of measuring and building brand equity may seem complicated if you are not really familiar with the methods. That is why I suggest taking professional help.
Nico Digital is a company that helps you in building a brand from the basic. The experiences marketers working under the banner of the company have helped many brands establish their equity successfully over the years. We have helped a brand measure its brand awareness and improve its performance on a national level. If you have any question about how we can help you, feel free to contact us.