If you want to see how to measure your brand equity, give our consumer intelligence platform a whirl.
Customer experience and brand awareness are the two key factors if you want to earn brand equity…
Customer experience
A customer-centric brand puts the customer at the heart of their business, using consumer intelligence to understand what they want and need. Customer experience metrics will help you measure the performance of your CX. Whether it’s a consumer’s first touch with your brand, navigating your website, making a purchase, or talking with customer support.
73% of consumers say that a good customer experience influences their brand loyalties. And, the more expensive a product, the more they’re prepared to pay. “While every industry sees a potential price bump for providing a positive customer experience, luxury and indulgence purchases benefit the most from top-flight service."
Our Brand Love Story 2021 shares the 11 methods that’ll inspire consumer love and increase brand awareness, leading to a strong brand equity. Take a look!
Brand awareness
Do consumers see your brand first? Your tagline, tone of voice, messaging is unified so that you’re instantly recognized, even with the launch of a new product? What values are associated with your brand? Does your CSR strategy promote the environment, diversity, equality, sustainability?
This article will explain what brand equity is and why it’s important. Also, we’ll look at some brands that have achieved a strong brand equity, and how to measure it.
Table of contents
- What is brand equity?
- Why is brand equity important?
- What is negative brand equity?
- How to build brand equity
- How to measure brand equity
- Brand equity examples
What is brand equity?
If I say cola, what’s the first brand you think of?
Coca-Cola?
Why, when there are so many other brands of cola out there? Google cola and the only brand that appears on page one is Coca-Cola.
This brand, and there are many others, have built such a strong brand equity, that they dominate their market, and have become synonymous with this product.
Ever see an ad for a Ferrari on TV?
The definition of brand equity is the level of positive value that a consumer perceives in a brand, compared with another brand. How do you feel about a brand when you see it? When offered a drink in a restaurant, rather than say sparkling water, do you say Perrier?
Brand equity.
When you’re looking to buy a new phone, tablet, or laptop, you already know you’re going for Apple, regardless of cost. It’s a brand you’re familiar with, you trust. You may not have even used an Apple product before, but its brand equity is so positive, they won you over.
Why is brand equity important?
Profit…
If your business has great brand equity compared with the rest of your industry, you can boast a large, loyal customer base and eager brand advocates. You’d be top dog.
So valued are you by consumers, you can charge premium prices. Customer churn will be significantly reduced, and who cares what your competitors are doing, right?!!
Your products virtually sells themselves, so winning new customers is taken care of. Plus, as long as you continue to deliver on value and promise, you’ll spend less - production, advertising, etc. Additionally, if you’re launching a new product, it’ll be accepted quickly as trust in your brand has already been established.
What's negative brand equity?
A PR crisis can reduce or kill the value of your brand, damaging your brand equity.
I'm not going to point fingers, but we all remember horror stories of big name brands getting caught up in public relations nightmare.
While it's possible to recover from a PR disaster, it can do lasting damage. Ideally, you should be prepared for when/if - we're all vulnerable - it happens.
Brand equity is about consumers who want to buy your brand, and they won't be happy to buy your products if you're caught up in a scandal.
I'm going to throw in my PR Crisis Guide so you can get a crisis management plan in place. It explains the 11 steps to be prepared, plus there's a free eBook, templates, crisis tools, and more.
How to build brand equity
The bonuses of a strong brand equity are many. Increased order value per customer resulting in higher profit margins. Improved brand reputation and less ad spend - if consumers flock to your brand, you'll be able to spend less on advertising.
But building brand equity isn’t a one off project. It has to be maintained. You’ll have to find what makes your brand unique, and use consumer intelligence to understand the values and needs of your target audience.
Have a purpose behind your brand
I’m going to break a marketing rule now - promote the benefits, not the brand - is not always the best thing to do.
Yes, you want consumers to understand how your product will help them solve an issue, but you also want them to know the purpose behind your brand. For example, Apple and Samsung push hard on their brands. Why? Because it means that they can add to their product lines without having to change their entire marketing strategies.
Messaging that resonates with consumers
Again with the consumer intelligence, it’s important to test your brand’s positioning with your target audience. Are you solving their problems? How are they reacting and what are they reacting positively to? Is your messaging personalized for increased engagement? You can’t flood your channels with content and pretty pictures without looking at the data, and learning what consumers are reacting to.
Drive brand awareness
You should boost awareness for your brand and business. Demonstrate your values rather than the number of funky features you offer. Build a genuine corporate social responsibility - CSR - strategy. Be customer-centric and put customers at the heart of your business.
Be customer obsessed
Social media has given consumers a voice, and they’re talking about you. It’s no longer you defining your brand, consumers are recommending you, or complaining about you.
Involve your customers in product development, sharing reviews, etc., so they know that you care about what they think. If you get negative comments on social media, don’t ignore or delete them, respond and try to help.
Journey to 360° customer-centricity.
A positive customer experience drives revenue, increases retention, reduces costs
“Today’s consumers expect brands to meet them where they are, with empathy, and a shared set of values. Conversational Intelligence is the key to unlocking meaningful customer relationships by understanding what customers are saying, where they are saying it and why.”
Cara Buscaglia | Chief Innovation & Insights Officer @ Talkwalker | State of Conversation 2021 Report
Give consumers the best customer experience, so they’ll keep coming back for more.
Be consistent
This means everything - tone of voice, style guides, brand image, design, etc. Your brand will lose recognition and trust if you keep changing its personality or characteristics.
How to measure brand equity
Having established what brand equity is and why it’s so vital for your business, you’ll need to be able to measure and prove your results. You’ll learn the ROI of your campaigns, measure brand awareness, association, and more. Your analysis will concentrate on business impact metrics - customer retention, price, and/or consumer impact metrics - sentiment analysis, customer preference, consumer intelligence.
Let’s check out the six brand equity metrics…
Sentiment analysis
How do consumers feel about your brand and products, compared to your competitors? What emotions do they feel when they see your brand? Positive sentiment will prove a strong brand equity.
Wendy’s burger, every time! Starbucks all the way! Nike or nothing!
Towards the end of 2020, Impossible Foods - plant-based products - became available in supermarkets in Hong Kong and Singapore. While conversation around the launch was relatively low, compared to the rest of the world, sentiment was consistently high.
Sentiment analysis for Impossible Foods and its products over 30 days.
Source - Market Pulse
Brand awareness
More than consumers knowing your name, brand awareness also demonstrates the popularity of your brand in the market. When consumers are talking about your brand and products - conversation share - this indicates awareness. Use consumer intelligence to measure and prove how much brand awareness you’re generating. Include…
- Customer reviews - Google, G2, Amazon, Yelp, Tripadvisor
- Brand mentions - social media, blogs, press
- Surveys and focus groups
- Search volume for brands and products
- Foot traffic to your store/website
Preference metrics
Measure your brand’s competitive position in the market, and how it compares with your competitors. This will determine consumers’ preference patterns, and establish why some prefer your products and are happy to go out of their way or spend more money with your brand.
Use the same metrics as those for brand awareness, along with sales data, and analyze for your competitors too. If your brand equity is strong, you’ll have more loyal customers than your competition.
- Brand value - how much consumers are willing to pay for your products and services
- Brand relevance - how many consumers agree that your brand provides unique and specific value, compare with your competitors
- Emotional connection - how successful your brand is at creating emotional connections with consumers to strengthen brand loyalty
Financial metrics
Measure your brand’s monetary value - market share, price premium over competitors, revenue generation, average transaction value, customer lifetime value, profit volume, rate of sustained growth.
- Market share - calculate your sales over a certain period and divide by the total sales in your industry, for the same period.
- Company value - take the tangible assets from the overall value of your business, to find the brand equity.
- Revenue potential - what’s the revenue potential for your brand and how does it compare with your current revenue?
Competitive metrics
What’s the brand equity of your competitors? The strength of their brand equity plays a part in yours, so you need to monitor and measure.
Competitive metrics will show you areas where your competitors are failing to meet consumer needs - below par customer experience, high prices, poorly received product, etc. You’ll also learn which of their campaigns were successful and resonated with your target audience. Include the following metrics…
- Customer acquisition rate - how much it costs your business to acquire a new customer - sales, marketing, PR, paid ads, customer experience, data, analysis.
- ROI of distribution channels - directs sales, retailers, exclusive distribution, wholesaler, channel partners, value-added resellers, selective distribution, etc.
- Sales lift - incremental increase in sales during a time-specific promotion compared with the baseline sales that would have happened during the same time, without a promotion.
Monitor your brand’s social media channels. Compare to your main competitors, to identify where they’re performing better than you, and work to improve.
If you’d like to conduct a competitor analysis, check out our guide.
Brand Audit
Performing a brand audit will help you understand how successful your brand is in your market. It’s easy to get complacent and assume that everything in your company is working as well as it could. You could be sitting on a potential disaster that an audit would reveal.
You’ll find inconsistencies in your marketing strategy. Pain points or poor customer experience efforts that could damage sales, traffic to your site, conversion rate, email open rate, and a whole lot more.
Conduct SWOT analysis to find the strengths, weaknesses, opportunities, and threats surrounding your brand.
Read How to conduct a brand audit for more detail and the 8 steps to a beneficial audit.
Brand equity examples
Awareness, value, consistency, uniqueness, CSR. The perfect brand equity mix. If only life were that easy. It takes time and effort to create a strong brand equity, and it has to be maintained.
Check out these examples of brands that have remained consistent throughout their existence. They have designs we all know, phenomenal brand awareness, and we’re happy to choose them over other brands. They’ve achieved success such that they’re leading in their markets…
Coca-Cola
As I said, if I offer you a cola, I’m confident that what springs to mind is Coke. That’s how popular the brand is. Coca-Cola isn’t just a fizzy drink. It’s become part of our lives. Part of our family. Whether it’s the shape of the bottle, the color, the tagline, the typeface. This $87+ billion brand is recognized all over the world.
The #ShareACoke campaign, launched in 2011, was all about relationships and personalization. Consumers were encouraged to share a photo of a Coke bottle with their name on it on social media.
Customers loved it, and the brand gained 25 million Facebook followers, with more than 500,000 photos shared that include the Share A Coke hashtag.
The campaign isn't going away soon…
124.6K mentions and 6.5M engagement rate, with the US and India leading the campaign.
Quick Search - #ShareACoke campaign was one of the most successful user-generated campaigns in the history of marketing.
Apple
You’re either an Apple person, or not. No one compares an Apple phone with another brand. There’s no middle ground. Apple concentrated on promoting its brand over its products, and building a strong relationship with its audience. Meaning that when it introduced new products, we accepted them unquestionably.
Nike
Nike has built a loyal customer base by promoting a favorable lifestyle, targeted messaging, and top quality products. Just Do It struck a chord with consumers - ages, genders, nationalities - as we connected with it to find our inner champion.
Inspiration and heroism is an ongoing theme with Nike’s messaging, and we want to be associated with that. Its brand awareness is so successful that if we see the swoosh, we instantly recognize it as Nike.
In July 2020, Nike launched the third film in its You Can't Stop Us campaign, with a video celebrating sport as an inspiration.
Narrated by Megan Rapinoe - the US professional soccer player - the split screen video juxtaposes footage of differently abled athletes - different genders and races. Demonstrating diversity in sport..
The first film in the You Can’t Stop Us campaign was released in March 2020 - Play Inside, Play for the World. May saw the second film, narrated by LeBron James, Never Too Far Down was intended to inspire athletes to believe that together, they’re capable of anything.
The May campaign received 120.3K engagements on launch day. The July campaign received 141.5K
24 sports, 53 athletes, 4,000 action sequences researched, 72 sequences selected.
Takeaway
If you’re looking to make a quick buck, sure, focus on profits. But if you’re looking to create a business that survives and thrives, you need to focus on your company’s brand equity. Your goal should be to make your brand the industry leader. To be better than your competitors. Brand awareness, top of consumers’ mind, market share.
I hope this post helps you understand the importance of strong brand equity, and goes some way to getting you started.
Collecting and analyzing consumer intelligence will be vital, so I’d suggest you take a spin around our platform. Sentiment analysis, visual analytics, influencer marketing, crisis management, are a few features that you’re going to need.
