Products are made in a factory, but brands are created in the mind
A brand is a lot more than just a logo or a product. A brand acts as a promise to its consumers and prospects. It is a promise of real value and quality that consumers expect to receive along with the company’s product. But also, a promise of the emotions that will be experienced by consuming this product or service.
Brand equity represents the additional undercover value that your products or services have, simply for the sake of being identified with your brand name.
For instance, let’s think about sports clothing. If an ordinary sweatshirt´s price is 30$, it could be easily sold for double or triple the price if it was an Adidas or a Nike one. This is one of the most clearly recognisable effects of brand equity, but not the only one.
Despite being a rather abstract concept, your brand adds direct value to your product or service in three basic ways:
• Reducing the time to make the purchasing decision.
• Decreasing the sense of risk by perceiving the brand as a reliable one.
• Providing emotional satisfaction.
3 major benefits of strong brand equity
If people like you, they will listen to you, but if they trust you, they’ll do business with you
1. Brands ease consumer decision making
When the human brain recognizes a certain brand, it automatically uses the stored knowledge in order to make the purchasing decision.
Imagine a world without brands. We would have to analyse every offer and the characteristics of each specific product to choose the most suitable and convenient one during each purchase process. Most of us would refuse to add this effort to our daily shopping.
2. Brand equity reduces risk
Another important purpose of a brand is to reduce the consumer´s sense of risk when buying a product.
Imagine that you need a new mobile phone. You do some online research or go to a store and two identical phones are presented to you. The only difference is that one of them is a Huawei and the other one is a Vsmart. Which one would you buy?
Despite having the same features, and even being the Vsmart one a little cheaper, you probably would end up buying the Huawei one. It is unlikely that afterwards you would have second thoughts about your choice since you would directly identify the brand Huawei as a more reliable one.
If you would then be asked why you decided to buy the Huawei phone instead of the Vsmart one, you would probably try to find a logical explanation for your decision. But the reality is different: your purchase was not a logical one, but an impulsive one, as it frequently happens to most people.
The reason for this is the existing link between high brand equity and the quality of the product perceived. This is a common mechanism used by consumers to reduce their sense of risk-taking when buying a product. Even though that perception might be wrong!
3. Brands provide emotional benefits
In a world where the prices of basic and mass-produced goods constantly keep falling, the emotional benefits become more important.
For example, let’s assume that a Dior bag does not give consumers the best quality per pound paid (a Michael Kors one would be a more rational choice), but it transmits social status, luxury and glamour. It is not only the bag but the emotions it evokes in its consumers.
The true competition no longer takes place on websites or in actual store shelves, but in the consumer´s heart.
5 Tips to increase your brand equity
Define what your brand stands for, its core values and tone of voice, and then communicate consistently in those terms.
The concept of branding is something that belongs to the person who experiences you or your company. You must work really hard for their experience to be positive.
The first step to increase your brand equity is to build greater brand awareness. There are several ways to achieve this:
1. Tell a story behind your brand that will leave a mark an impression in people’s lives. Explain to your audience what your brand represents, and where it comes from.
2. Keep in touch with your audience via email, newsletters and other channels, but be careful not to neglect the way you communicate with them. Details matter!
3. With more than 3 billion users, social media is a must. But you need to be careful using it, because it could also have a negative impact on your brand. Here you have some useful tips you can use to “share properly”:
• Deliver quality content in order to create engagement with your audience and generate social talk. Avoid sounding like a sales robot programmed with “industrial” jargon. Communicate as if your brand was a real- life person.
• Involve your employees and get them to share your stories and create content on behalf of your brand. Adobe did the same with its employees, and it was a real success. You can read about it in this post.
• Use social media advertising. The greater social platforms such as LinkedIn, Twitter, Facebook or Instagram allow you to reach specific audiences and create a narrative around your brand in an affordable way.
4. If you make a mistake, use it as an opportunity to improve customer loyalty. Failing per se is not the problem. The real issue is not accepting responsibilities or providing the customer with a solution. Mistakes are great opportunities to create a positive customer experience.
5. Provide great customer service. If you want to learn more about how to deliver good customer service, visit our post Good customer service: reading between the lines.
Start building your brand equity
Your brand is the single most important investment you can make in your business
Brand equity is not something you can build in a single day. It requires a lot of effort and continuous work due to the changing preferences of the users and the market itself. But as we learnt earlier, it will provide you with very important benefits in the long run.
A crucial aspect of this process which will allow you to progress is to understand what your customers think about your brand, regardless whether it is true or not.
How do users perceive your brand? What do they say about it when you are not in front of them? These may seem tricky questions to answer, but with our Symanto Insights Platform, you will be able to answer them in a simple and intuitive way, in only a few minutes.
Request a free personalised demo and find out for yourself!