There are many ways you can measure the success of a business. And while revenue growth is one of the main indicators that investors and the C-suite often look at, when it comes to turning a business into powerhouse brands like Google, Nike, and Instagram, there’s another important factor to consider: Brand equity.
In the article below, we will give you an in-depth definition of what brand equity is and an we explore how to build brand equity for your business.
Brand equity can be defined as a brand’s perceived value according to its customers.
If customers think positively about a brand based on their previous interaction with it, this is an example of positive brand equity. However, if a customer has an unpleasant interaction with your brand—whether it be the customer service they received or consistent technical difficulties with your product—they are less likely to use your business again and are also more likely to dissuade others from using your business if asked for their opinion. This is an example of negative brand equity.
Take the above image of a Coca-Cola bottle for example. Chances are, if someone asked you about Coca-Cola, you could describe the color of the can, a memory you have drinking it, or where you’ve seen it advertised before. This is an example of the power of positive brand equity.
Your brand equity can also be tied to many other metrics marketers and advertisers often look at when assessing the health of a business. These include:
While something like brand equity is hard to measure—and thus can feel less important than other company goals you may have—brand equity is an essential step in helping your business grow. Below are three reasons why brand equity is important:
A strong example of this can be seen in the ever-growing list of products that Apple has on offer. The tech giant originally started with desktop computers and have since expanded to a wide range of iterations of their computers (the iPad, iWatch, and iPhone) often leading consumers to wait in line for hours in order to buy these new products on launch day.
In order to make sure your customers see you the way you want to be seen, it’s important to first develop a brand story and brand personality. These elements are apart of your brand kit and will help you when making marketing and strategy decisions in the future.
If you’re just starting your business, you want to make sure that you’ve created a visual representation of what you want your personality to look like and feel like.
Whether that be in the color of your logo, the font you use on your labels, your social media posts and even your packaging. These smaller elements give your customer insight into who you are as a brand.
Design tip: For a serious and corporate personality opt for dark shades of blue and green, and stick to a simple, professional-looking font. If you’re opting to build on a fun and relaxed personality, opt for pastel colors and playful fonts.
Once you have a strong brand story and brand personality that you’re proud to display, the next step is building awareness around your brand and what you offer.
This is where marketing comes in.
Brand awareness can be defined as how familiar customers are with your brand, and how comfortable they feel with it. When trying to build your brand awareness, think about the elements of your business that customers interact with most, and how you can get them in front of potential consumers. These include:
Whether you add your brand statement to your Instagram Profile or provide more context on your Facebook About Page, providing the consumer with context allows them to assess whether your business is able to potentially fill their need.
An accurate way to understand your true brand equity is to open the lines of communication with your customers and clients.
Whether it’s enlisting a team of customer service representatives, sending out automated feedback forms—with an incentive for responses—or, activating a dedicated email address for feedback, spotting issues and then working to fix them quickly is one of the most significant ways you can build trust in your brand—and ensure returning customers.
Building and retaining relationships with your clients and customers allows a stronger bond to be created with the consumer. A growing relationship is powerful in terms because it leads to repeat purchases and a sense of loyalty to you.
Staying in regular contact with your customers can be as simple as a weekly newsletter, Facebook Live Q&A sessions, Instagram Stories, or even hosting an intimate event to thank your loyal customers.
So now that you’ve worked on building your brand equity, how do you know if it’s worked? Great question!
In order to know if you’re efforts have proven to be effective, it’s important to understand how to assess and measure the growth or decline of your brand equity. Below are some steps to measuring brand equity:
Surveying your clients and customers is one way to assess where your brand currently sits on the brand equity scale. Branding Strategy Insider suggests dividing your questions into two main categories: Functional association, and emotional association.
When assessing the functional associations of your brand, you are trying to see how your brand stands against other brands in practical, everyday settings. You’re also assessing the customer’s recall, and whether your brand is at the top of their mind when standing alongside your competition. Some questions to ask:
When assessing emotional associations, you are trying to discern how your brand makes people feel when they are using your product.
Branding Strategy Insider also suggests looking at your financial metrics when trying to measure your brand equity. By analyzing your financial situation—both the growth you have had internally and compared to your competitive set— you’ll gain a better understanding of how brand awareness has helped grow your business.
Aside from the growth of your business, taking time to invest in your brand’s equity also allows you to better understand the needs of your customers, and apply them through every stage of the sales funnel.