How to Build and Measure Brand Equity
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When running a large business, it’s essential to grow your organization with your customers in mind. By putting your customers first, you establish an advantage over your competition. And that’s what we’re talking about when we talk about brand equity.
With positive brand equity, you facilitate the long term growth of your business. Therefore, a strong brand means that you’ve achieved credibility with your customers.
By building brand trust, you can command higher pricing and boost your lifetime value with each customer. You can turn your business into powerhouse brands like Google, Nike, Apple, Facebook, and more.
In this article, we provide detailed points on how to build and measure your brand equity.
What is Brand Equity?
Brand equity is defined as the value of your brand based on customer perception and experiences. This makes your brand superior or inferior to others. For instance, if a customer has received pleasant experiences with your brand, then it has a positive brand equity. However, if a customer has unpleasant experiences with the brand, people are less likely to use your brand. This leads to a negative brand equity.
4 Ways to Build Brand Equity
1. Build Brand Awareness
We’ve heard of people who call themselves, “a Samsung person,” “Apple person,” or “Chanel person.” This is what brand awareness does for a product. It helps you become that top-of-mind brand when customers research products to purchase.
Brand awareness among your customers doesn’t happen overnight. On the contrary, strong brand awareness is a result of consistent effort and focus in attaining and maintaining loyal customers. If you raise awareness through a few advertisements, you won’t get far. Not only will the advertisement focus on the brand, but it will lack impact.
When you’re building brand awareness, try to think of the elements that customers will recognize when looking for your goods and services, and how they interact in the way you intend.
Picture 1. Brand awareness is the first step towards building and measuring brand equity
Ways to do it:
Whether you’re adding it to social profiles or websites, your logo is the company’s face. It is a symbol that customers use to identify your brand.
Consequently, you want your customers to instantly connect to your logo on sight with the memory of what the company provides. Therefore, use the same logo and image to make your branding consistent.
Your website is where customers go to visit when they hear of, or are reminded, of your brand. Moreover, it is a space where you communicate your brand personality and story.
First impressions do matter for both good and bad. A positive first impression fosters a bond of trust with the customer. A negative first impression leads to biases and social prejudice.
This is why good web design is essential. For instance, if you run a nonprofit organization, consistent website design for nonprofits creates uniformity for your brand. Having the same functions, symbols, and animation throughout your website will help users easily navigate the site.
Product or service
Brand awareness is what drives potential customers to purchase your products. In your brand awareness efforts, make sure your product solves a problem or fulfills a need for your customers.
Email or newsletters
Email or newsletters allow your business to communicate with customers who have expressed an interest in your company. Through this mode, you can also disseminate information, building relationships and trust with your customers.
89% of marketers believe that social media has been “very important” and “somewhat important” for their business.
Picture 2. The importance of social media strategy
Implementing a social media strategy will improve brand recognition since you’ll be engaging with a broader audience.
2. Develop a Strong Brand Personality
Imagine a brand to be a person. How would that person behave or speak? In this way, brand personality helps to facilitate communication with the customers.
Customers can relate to traits he/ she has with the personality traits of the brand. For instance, the Apple brand. Apple is known for being sleek, stylish, and premium. A customer who loves stylish and premium phones can connect to Apple because of the elegant trait associated with it.
Therefore, brand personality helps to build an emotional connection with the customer. If you want to be well known, and create a brand identity for your business, follow these simple steps:
Research your audience
Just like any other business, it’s essential to research your audience. In this way, you can’t target a product to preteens the same way you target a product to mothers. Knowing what your customers want is vital to the success of your brand.
Know what to avoid
To create a real identity, brands have to spend time and effort to find out what works. This is because your brand is your promise, and you must build it thoughtfully. If you make these mistakes, your brand might falter:
- Copying your competitors
- Giving customers mixed messages
- Lack of consistency
- Taking feedback from the wrong sources
- Not focusing on first impressions
Monitor your brand identity
It’s challenging to understand the effectiveness of your efforts in the marketplace without monitoring your brand. So, brand monitoring lets you determine how good or bad your business is performing, based on data.
Use brand monitoring tools such as Google Analytics, surveys, comments, and more to get a sense of what people say about your brand. This will help you respond accordingly to your target market’s reactions and build a good reputation with customers.
3. Communicate With Your Customers
When it comes to making an impact with your brand, it’s essential to focus your attention on the visuals such as logo, web design, and graphics. While these are key elements to building your brand, it is equally important to communicate with your customers.
Communication is a way to show customers that you understand what they mean instead of what they say. Your communication speaks volumes about your brand. It should be authentic and consistent.
Customers want to know that your brand solves their problems by being able to answer their inquiries. Therefore, use customer service representatives, feedback forms, and more to handle customer issues. This builds brand trust and ensures returning customers.
Picture 3. Authentic and consistent communication
4. Build a Strong Bond of Loyalty with Your Customers
These days, It takes more than just quality products and services for your customers. In the age of the internet, if a manager said the wrong thing on TV or in a newspaper, it can have a negative impact on your brand.
Alternatively, treating your customers poorly can attract negative attention and chase potential customers away. No amount of funding or celebrity endorsement can buy back the trust and loyalty of your customers.
To create customer relationships and keep them strong, you must do all you can to leave a good impression.
Ways to do it:
- Treat your customers as people
- Make communication as simple as possible
- Make honesty your policy
- Exceed expectations
- Ask for feedback
- Show appreciation
Now that you’ve built your brand equity, how do you know that your efforts have proven to be effective? This is why it’s so important to measure your brand equity. Here’s how to do it.
3 Ways to Measure Brand Equity
1. Financial Metrics
Financial metrics are closely related to sales and performance. By analyzing your financial situation, you’ll have a better understanding of your brand’s monetary value. You need to know your brand’s financial metrics so that you can secure marketing budgets to continue growing.
These are ways to measure brand equity through financial aspects:
Market share means understanding how you measure up in your market compared with whomever you’re in competition. How easily can you retain and attract new customers? If you’re in the grocery business, you’re not going to compete in the same market as a pharmaceutical store. Your market share can be divided into your customer segments, product segments, and geographical markets.
Price premium is when the product’s price is significantly higher than similar competing products because the customers perceive the product or service as a higher quality. Measuring these price points indicates your brand’s financial power.
Transaction value is the price paid for your goods or services. This metric shows how well your brand maintains and grows its customers and is one of the key metrics in measuring brand equity.
This trend illustrates whether the brand will get enough profits from a customer throughout their entire lifecycle with your brand. Lifetime value metric is important because it will help you know how much you’ll earn from your brand.
Growth rate provides you with important information about your brand’s value as it helps you understand how to grow it over time.
2. Knowledge Metrics
When you measure brand equity, knowledge metrics determine how popular your brand is among c
ustomers. Surveying is one way to access the consumer’s awareness.
These can be classified into two categories:
Functional associations refer to how well your customers know your brand in practical everyday life.
For instance, if one gets a cut, they’ll likely use a Band-Aid to cover up the wound. People recognize and recall the Band-Aid brand because its products are known for covering minor abrasions and cuts.
Data gathered from functional associations help you better understand how customers use your products in a way that you intend. Also, you can know what customers expect from your brand.
Information gathered from emotional associations help you know how customers feel when they use your products or services.
3. Preference Metrics
Consumer preference is a factor that affects a consumer’s buying decisions. It is the reason customers go to great lengths to buy an expensive product they like. Aspects of preference can be measured in terms of:
Brand relevance – The extent to which customers agree your brand provides value as opposed to other competitors.
Accessibility – The ability to provide your target market with goods and services.
Emotional connection – The ability to form emotional connections with customers is key.
Value – a measure of how much your customers are willing to pay for your products.
As you grow your business, it’s equally important to grow and measure your brand equity. As you do that, ensure that you put your customers first in everything you do. Strong brand equity is achieved when customers trust your brand and remain loyal to it over time.
Dan has hands-on experience in digital marketing since 2007. He has been building teams and coaching others to foster innovation and solve real-time problems. Dan also enjoys photography and traveling
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