Building better brand equity: The strategies and ideas you haven’t heard
September 1, 2020|
It’s common to assume that if a product is of high quality, it will sell, and if it’s of low quality, it won’t.
That’s just not how it works, though. In fact, products that are objectively better (higher quality, more durable, etc.) than others often fail while inferior products succeed.
Why is that? It all boils down to one thing: brand equity. It could mean the difference between a customer buying your product or picking another.
Sounds pretty important, right? Let’s make sure you do everything in your power to realize the full potential of your brand.
What is brand equity?
Brand equity is directly related to how well customers trust a certain brand. Brand equity is a demonstrable value a company gets when putting a discernible brand name on a product. This value is swayed by consumer perception of a specific brand.
Brand equity is made up of a combination of elements, including customer perception and the value this perception brings with it. It makes sense, then, that a customer’s positive thoughts about a brand turn into direct benefits.
Which leads us into the reasons why a strong brand equity is so important.
Discover the many reasons why brand equity is important
There are numerous different ways brand equity is valuable. Here are three reasons that I feel best show why you need to strengthen and maintain equity.
1. Creates greater expansion possibilities
Brand equity adheres to the idea that the ‘rich get richer’, in the sense that once it rises, a brand expands their operations into new markets successfully.
The concept is simple: good brand equity makes it easier and cheaper to sell products. As such, a new line of products won’t take as much advertisement, research or promotion.
This has a direct correlation with the potential for expansion. If a company wants to expand into a new market, it will be a lot easier if their brand is of the highest quality.
The example I love to use for this is Apple. They’ve been successful with almost each new market they’ve tapped into – music, jewelry, television, etc.
Imagine that Apple decided to make a new line of workout gear. Even though it would be aimed at a new target market, there would be serious carryover thanks to the brand equity Apple has built up.
Potential customers would expect an innovative line of clothing from Apple, making it a lot easier and less of a risk.
2. Positively affects pricing potential
“Pricing is the final representation of your work.”
If a customer thinks the price of a product or service is reasonable, they may make a purchase. This is a fair statement to make.
However, brand equity turns the idea of a ‘fair’ price on its head. Similar products, no matter how equal in quality, are often priced differently.
The main factor in these more expensive products is the brand behind them. A good example of this in action is at the grocery market, where name-brand products go for sometimes twice the price of a generic offering, despite being the exact same thing.
This tells us that the higher we build our equity, the more reasonable it is to price our products and services at a premium. This in turn also increases revenue.
3. Boosts customer retention
“All of your customers are partners in your mission.” – Shep Hyken
Brand equity has a direct effect on customer retention, which in turn makes it cheaper to market different products and services (since sales will be made based on the brand anyway).
Harley Davidson, for example, sells luxury motorcycles. However, it’s a general truth that their customers purchase more than a motorcycle from the company.
They also buy any new parts, gear and apparel. On top of this, when they need to upgrade their bike, they go through Harley Davidson as well. Many customers even seek out and discover information about new products Harley comes out with.
It’s fair to say that Harley’s customers are extremely loyal. This brand loyalty means the customers don’t need some kind of expensive marketing advertisements to bring their current customers back. There is no more convincing that needs to be done.
This type of retention is truly powerful and speaks to the importance of brand equity.
With these benefits in mind, I’ll next move on to some of the unique ways to increase and strengthen your brand equity.
Unique, dynamic strategies to boost brand equity
Now comes the fun part: building up your brand equity. I’m going to provide a simple approach to bolster your own equity.
This should help get the creative juices flowing, and you’ll soon be visualizing your own brand in each of these processes.
These strategies will show you the possibilities of all the helpful tools working in unison and make it simple to imagine how you would fit into them.
Discover your audience. Build awareness.
“Who are you? (Who am I?)” – Elvis Presley
Though he was referencing something completely different, Elvis was actually asking the right question here for anyone looking to increase brand equity.
Brands reflecting on their identity are doing the right thing, but they’re missing out on such a huge part of this step – discovering their target market.
Creating awareness is all about being noticed by distinguishing yourself as something unique and positive. So, how do we go about doing this? We first need a deeper understanding of our audience.
This entails more than simply knowing your key audience demographics. It requires a comprehensive understanding that includes details such as their perception of your brand, how they arrive at purchasing decisions and how they enter into purchasing processes.
Once you’ve gathered this important information, it’s time to take action! Consider your overall brand image with this specific market group and decide if you should make adjustments.
Next, determine what needs to be changed: Your messaging? The product they’re thinking of buying?
These reflections and consequent adjustments are sure to get you onto the right track, and propel you into the next part of the process: improving upon your current product or service.
Consider customer perceptions and expectations. Adjust products or services accordingly
This part of the process boils down to how customers feel about your brand and what they expect from it. Be willing to make changes based on these expectations.
The customer is going to compare and contrast brands (yours with competitors’). They’ll also consider how useful the product your selling is to their specific needs. Finally, how much they trust you is a huge factor here as well.
So, how can we make positive adjustments based on our potential target market? Addressing all possible concerns before acting is key. I’ll break it down into two separate sections, customer perception of your brand and how it affects customers.
Customer expectations based on perceptions
First, consider the level of separation (even if only the perceived level of separation) your product or services have from your direct competitors. This is a factor of brand differentiation.
Next, examine your trustworthiness, authority and reliability. Then, measure how well you’ve marketed your product as something that meets the audience’s needs.
Finally, consider the character, excellence and quality your product displays.
With these considerations in mind, you’ll be able to make a powerful adjustment that boosts each one. Aim to create differentiation between you and competitors, increase your authority, focus your brand to meet customer needs and boost the quality of your product.
This addresses a large part of customer expectations, but now you need to focus on their internal expectations.
Customer expectations based on internal sentiment
When someone sees your product, they react to their perceptions listed above (you vs competition, brand authority, how you meet their needs, product quality). They’re also swayed by how well your brand sparks different emotions.
This is a lot harder to influence than their other perceptions, since it’s about their internal feelings, but it is possible. If your target audience wants peace of mind, create marketing strategies that calm their nerves. If they want safety, keep them safe, so to speak.
The next part of the process deals more with the effectiveness of the product and your image.
Delivering product efficiency and brand values consistently
Brand values represent the kinds of things you stand for. When building brand equity, consider how these values meet customer needs beyond a product or service.
There are two different ways to accomplish this. The first is through the service or product directly. For example, if you’re committed to keeping the environment healthy, a new product line that doesn’t use any eco-dangerous materials helps relay this value.
Another way to do this is through types of marketing and messaging. Using the above example, this could be done through an environment-friendly slogan.
Next, it’s time to tackle product efficiency, or how your product is able to meet the unique and specific needs of the target market.
Many different factors enter into this, including things like product longevity, style, pricing and more.
It’s easy to say that your product should meet all these factors. In fact, I’m sure most companies do. However, a more focused approach is needed.
By first identifying your specific customer’s needs, you can focus on improving product effectiveness in those areas.
Finally, the last part of this process that brings everything together is building a meaningful relationship with customers.
Creating and maintaining meaningful customer relationships
The final phase of this process is the concept of building relationships so that our customers feel deeply connected to us.
This goes far beyond simply a conversation or a repeat sale, though these are included. Also included are the feelings customers attribute to purchasing your brand, the feeling of involvement and social connection they link to you and their overall commitment to it, even when not making a purchase.
In order to create and maintain meaningful customer relationships, we need to look for ways to encourage them further in the areas they care about.
So for example, connecting with audiences on social media or other forums boosts their involvement. Incentivizing different purchases could encourage a repeat sale. Adding something special to a purchase could make it feel more unique.
In fact, when a customer is able to freely connect with a brand on social media, it raises the likelihood of them re-purchasing items by about 30%. Offering rewards, gamifying sales and extending other perks increases the chances of a repeat purchase by nearly 40%.
Think about the ways you could push for these relationship-boosting ideas.
Brand equity-building recap
In order to build your brand equity, it helps to:
1. Identify your audience and boost awareness
2. Adjust products based on customer perceptions
3. Maintain product efficiency and values
4. Boost customer relationships
You’re now ready to start increasing your equity. But how do you know if it’s strong or not? It seems rather abstract sometimes. Fortunately, I’ve tackled this issue in the next section.
How to evaluate your current brand equity
“We should always be ready to explore our positive and negative traits by evaluating our real self from time to time.” – Dr. Prem Jagyasi
Before we dive into the ‘how’, we first need to understand the ‘what’ we are evaluating here. There are competing ideas on how to determine brand equity. The best way going forward is to combine these processes into a comprehensive strategy.
First, there are methods like brand awareness that are more abstract. This contrasts with the concrete method of evaluating the financial value of the brand.
So, in order to strongly and sufficiently evaluate our brand equity, we’ll combine these unique methods and come up with conclusions for each.
1. Determine your brand awareness
Brand awareness is how someone reacts or internalizes emotions when they experience a brand element. This includes things such as logos, styles, color schemes and jingles.
Brand awareness is essentially how popular your brand is. This popularity gives you a good example.
The most direct method to measuring brand awareness is by measuring searches to see data about how a brand is performing. This process is typically supplemented by software systems like Ahrefs.
Though this is the most direct way, there are a few others with similar but unique value. These evaluation methods also require some estimation and aren’t always 100% accurate, but they’re still valid and widely-used.
The first method is through determining customer perception of your product. Do they have a clear understanding of it, including all its lesser-known functions and/or features? Are they generally satisfied with everything it offers?
Understanding the answer to these questions is key.
The second method involves exploring customer emotions about your product. Did they have a strong emotional reaction while they used your service? Did the purchasing process make them happy? Stressed? Frustrated?
If you’re able to research all three of the above evaluation methods, it will become pretty clear how strong or weak your brand awareness is.
2. Consider how well your brand does vs competitors
This evaluation phase explores the ultimate power your brand has to win over your customers purchasing power.
Essentially, you’re attempting to determine the customer inclination to select your brand. There are quite a few ways to measure this, as well.
The first is to evaluate the extent of your outreach overall. That is, how well does it connect with its intended audience and deliver the value it promises.
Most of this is decided based on convenience and availability. For example, it’s not hard to find an Apple store globally. Even if there isn’t one in your area, there are certainly Apple products inside other stores, markets and malls.
Next, look at how well you implement a unique selling proposition (USP). This is the ultimate way to differentiate from the competition.
A USP validates whether or not your product or service belongs within its current market. It gives reasons why a brand is different from competitors, expresses innovative capabilities, durability, value and more.
An example of a strong USP is from the American brand Death Wish Coffee. Their USP asserts that they are the “World’s strongest coffee”.
Partnered with the name, it’s clear that any potential buyer realizes the type of differences they’re getting when they buy a batch (highly-caffeinated!).
3. Learn the overall financial value of the brand
Finally, we come to our most direct, data-driven way to evaluate brand equity, and that is through the overall financial value it retains.
This is calculated based on a brand’s price premiums, revenue, scalability and more. A combination of these factors give companies a detailed appraisal of brand value and equity.
For anyone interested in numbers, this way of calculating brand equity will certainly feel the most comfortable. It is a concrete method, that when partnered with the other two methods, results in a strong understanding of overall equity.
Start increasing your brand equity
Putting out a great product or service is only half the battle. Though it’s important to create quality services, customer perception of your brand is just as valuable. Follow these important methods to keep your brand equity strong.
Remember that target audiences make quick decisions – keep your brand equity high so that they pick you.
Check out our complete branding guide to learn more.