The key to really understanding how to build brand equity is to first get to grips with why positive brand equity is valuable to your customers and to you.
In this blog we cover what brand equity is, why in this current climate it’s particularly important, and finally we look at 5 ways you can build and maintain positive brand equity for your brand.
What is Brand Equity?
Brand equity is the additional undercover value that your products or services have, simply for the sake of being identified with your brand name.
The value of a brand is impacted by a number of intangible factors, including customer loyalty, goodwill, trust, reputation, and name recognition.
Why Is Brand Equity Important?
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. It’s also, a promise of the emotions that will be experienced by consuming this product or service.
Let’s take sportswear as an example. Brands with a strong brand reputation, such as Adidas or a Nike can easily charge double or triple for their products than companies with a weaker brand image and reputation.
This is one of the most clearly recognisable effects of brand equity, but it’s by no means the only one.
3 Major Benefits of Positive Brand Equity
Despite being an intangible and rather abstract concept, your brand adds direct value to your product or service in three basic ways:
1. Brands ease consumer decision making
When the human brain recognises a certain brand, it automatically uses that stored knowledge to help them 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 for each purchase. 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 if the Vsmart is a little cheaper, you would probably end up buying the Huawei.
It is unlikely that afterwards you’d have second thoughts about your choice since you would directly identify the brand Huawei as a more reliable brand.
If someone were to then ask you why you decided to buy the Huawei instead of the Vsmart, 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. This is frequently the case.
The reason for this is the existing link between high positive brand equity and the perceived quality of the product. 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!
This perceived quality is all the more important in the current climate. In our Consumer Trends 2023 blog, we covered how consumers are opting for durable, quality and timeless products to make sure their purchases last for as long as possible for both economic and environmental reasons.
3. Brands provide emotional benefits
No matter how rational we perceive ourselves, part of our purchasing decisions will always be tied up in our identities. The emotional benefits derived from a product or service can be just as important as the functional ones.
It’s no coincidence that lifestyle brands are successful. People don’t just buy into a product or service; they buy into the lifestyle that it represents – something that provides them with an identity and a sense of belonging.
For example, let’s assume that a bag does not give consumers the best quality per pound paid (a one would be a more rational choice), but it transmits aspiration, social status, luxury and glamour. It is not only the product itself that interests the consumer, but the emotions it evokes, and in this particular case, the prestige that accompanies such a purchase.
In many instances, the true competition doesn’t take place on websites or on store shelves, but in the consumer’s heart.
How to Build Brand Equity: 5 Tips
Increasing brand equity is a question of reaching the hearts and minds of your customers, and the way to do that is to consistently create positive experiences each time they encounter your brand.
You must work really hard for their experience to be positive, whether they’re simply seeing your content on social media, making a purchase or reaching out to customer service
Here are 5 tips on how to build brand equity:
1. Clearly define your brand identity
What does your brand stand for? Tell a story behind your brand that will leave a mark an impression on people’s lives. Make it clear to your audience what your brand represents, and where it comes from.
This includes creating a clear mission, a consistent brand voice and compelling visuals.
Make sure that all members of your team are on board with your mission, and that those in marketing and customer-facing roles can effectiely communicate your brand identity.
2. Stay connected to your audience
Make the most of your CRM platform and regularly reach out to existing customers via email, newsletters, etc.
However, you want to avoid bombarding your audience with irrelevant messaging. Use Symanto for psychographic segmentation to target sections of your customerbase based on their personality types and deep values which drive their purchasing behaviour.
Social media is, of course, a must. But you need to be careful using it, as it could also have a negative impact on your brand. Here are some useful tips on how 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. You can read about how Adobe successfully used this technique it in this .
- Use social media advertising. Bigger social platforms such as LinkedIn, Facebook, or Instagram allow you to target specific audiences and tailor messaging to different segments based on demographics and behaviour.
3. Leverage your mistakes
If you make a mistake, use it as an opportunity to improve customer loyalty. Failing is not the problem per se. The real issue is not accepting responsibilities or providing the customer with a solution. Mistakes can provide great opportunities for customers to interact one on one with your team, humanise your brand and create a positive customer experience.
4. Provide great customer service
Great customer service involves attending to all of your customers as quickly as possible. But at times of high traffic (such as holidays) that’s not always possible.
Your next best option is to recognise and prioritise customers with a negative, emotional response. Natural language processing (NLP) technology, can automatically identify negative emotions such as anger or frustration in texts, and flag these as urgent to avoid customer churn and salvage customer loyalty.
5. Monitor your progress
Because of its intangibility, brand equity is a challenge to measure and monitor. However, with Symanto Insights you can measure factors that contribute to positive brand equity.
For example, you can measure brand loyalty by looking at how many people use positive emotional language when interacting with your brand on social media. You also get a brand recommendation score, which will show you what percentage of commentators in your dataset would recommend your brand to another person.
Ordinarily, these brand equity metrics require dedicated market research, costing you time and resources. However, with Symanto Insights you can get these scores in a matter of minutes based on your CRM data or data from social media, forums and reviews. You can even compare these metrics against those of your competitors to benchmark your performance, track your progress and keep your pulse on changes in your market.
Start Building your Brand Equity
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 it will provide you with very important benefits in the long run.
A crucial aspect of this process is to understand what your customers think about your brand, regardless whether it is true or not.
How do consumers 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.
To find out more about how Symanto can help you build your brand equity, get in touch with us.