Establishing Brand Equity

Brand equity is the value of your brand for your company. It’s based on the idea that a recognised brand that’s firmly established and reputable is more successful than a generic equivalent. It’s based on customer perception: customers will tend to buy a product they recognise and trust. When a brand is recognised and trusted to the point that the customer recognises it and feels a deep psychological bond with it, your brand equity is valuable indeed.

Here are four steps towards building your own brand equity.

1. Build greater awareness

You need to make sure your customers recognise your brand identity when they’re looking for goods or services, and that they perceive it in the way you intend. There are several ways you can do this:

• Using the same logo or image to ensure your branding is consistent
• Great customer service
• A heart-warming story behind the brand
• Keeping the brand in front of your market
• Providing ongoing value
• Keeping in touch via email or newsletters
• Tap into social media and share blogs, tweets, Facebook groups, Instagram photos

Word of mouth, positive customer experience and targeted marketing all help you develop greater brand awareness.

2. Communicate brand meaning and what it stands for

There are two things to bear in mind here: how well your product meets the needs of customers and its social and psychological aspects. A company that produces a useful product, and genuinely commits to social or environmental responsibility will attract customers and employees who share those values. And who will be sufficiently connected and enthusiastic to be advocates. IKEA, for example, has invested in sustainability throughout its entire business operation: 50% of its wood is from sustainable sources, 100% of its cotton is Better Cotton standard and 700,000 solar panels power its stores. With feel-good eco-credentials like these, spending a Sunday afternoon assembling an IKEA flat pack seems more a pleasure than a chore when the product comes from such a reputable brand. 

3. Foster positive customer feelings and judgments

When customers have a warm feeling towards your product, they’re more likely to become loyal customers and pass the word on. Judgments are made about a brand’s credibility, capability, quality, relevance to need, and superiority over the competition, so it’s important to maintain the integrity of all of these. Positive feelings can be excitement, fun, peer approval, security, trust, self-respect.

A brand that can maintain positive judgments and feelings is onto a winner. For example, the Apple iPad: did you think you needed one before you saw one and appreciated its capabilities? Now, for many of us, it’s our computer, games console, TV, radio, alarm clock, mobile bank, messaging service… we love our iPads.

4. Build a strong bond of loyalty with your customers

This is powerful, yet the most difficult aspect of brand equity to attain and maintain. Customers have formed a psychological bond and feel attached to your brand and make repeat purchases. They may feel part of a community with fellow consumers and act as your brand ambassadors by engaging in social media chats on Twitter, Facebook and Instagram, online forums and even events. Brand equity connection that borders on customer evangelism is valuable.

Measure brand equity

There are three core brand equity drivers that you need to track: financial, strength and consumer metrics:

1. Financial metrics

The C-suite will always want to see a positive balance sheet to confirm that the brand is profitable and viable. You should be able to extrapolate from the data market share, profitability, revenue, price, growth rate, cost to retain customers, cost to acquire new customers and branding investment. You can use solid financial metrics data to demonstrate how important your brand is to the business and secure higher marketing budgets to continue growing.

2. Strength metrics

Strong brands are more likely to survive despite change and deliver more brand equity, so it’s essential you measure its strength. You’ll need to track awareness and knowledge of the brand, accessibility, customer loyalty and retention, licensing potential and brand ‘buzz’. As well as surveys that use open text questions, social media monitoring will be able to give you a picture of how your brand is known and loved (or not).

3. Consumer metrics

Companies don’t build brands, customers do, so it’s essential that you track consumer purchasing behaviour and sentiment towards your brand. Track and measure brand relevance, emotional connection, value and brand perception through surveys and social media monitoring. The right text analytics software that can interpret open text comments is particularly useful here to gather sentiment and suggestions.