The term brand equity gets tossed around a lot among marketers and is often confused with brand awareness on some occasions. Leaving aside that confusion, Brand Equity is a crucial determinant of the perception of the brand by the audience and is very difficult to create unless you have a group of adept marketers like TheGo-ToGuy!, by your side. Let’s explore it in detail, why it is important for businesses and how can you measure and increase it over time.
What is brand equity?
A business has tangible assets which hold some monetary value. Similarly, brand equity is an intangible asset that holds some brand value in the market and the minds of the consumers. It is how well renowned and identifiable a brand is among consumers and the general public who could turn into consumers. That must have had your head spinning, so let me make it simpler for you.
Think of Coca-Cola, a coke brand. As soon as you see a coca-cola banner, image, ad, or even a logo, you know that it is a reputed come brand. That is a great example of brand equity. You don’t even need to describe the niche of the business or the actual product because the audience already knows that. Brand Equity is essentially how famous a brand or its product is and how the consumers relate to that brand. That being said, creating brand equity takes a lot of effort, even more than before because the competition is stiff and customer’s expectations are always on the rise.
Importance of brand equity
Its importance continues to be understated even today but here are a few factors that would change your perception.
- Bolstering ROI
It cements your presence among the consumers. As you become more and more relatable and recognizable, the less you have to spend on building expensive marketing campaigns and running sponsored advertisements, all of which consume a big chunk of the profits. Moreover, you save of these exorbitant costs at no extra effort thereby increasing your revenue margin.
- Premium Tier Products
Once you have established it, you can begin to charge premium prices for the same services and products. The consumers relate to your brand as the epitome of finesse and are willing to pay a little extra for having the brand experience.
- Seamless product roll-out
Brands with high brand equity can roll out relevant products or even explore a new niche and still hit the desired sales number. It compels a consumer to put faith in the product and associate his trust with it because it stems from the same brand that he loves. Even new consumers aren’t as skeptical as they would be if it were some other brand. It plays a pivotal role in decision making and whether to go for a product or service or not.
Components of brand equity
It comprises the following elements but can also differ from business to business.
Knowledge about the brand, its products, and services as well as the niche of the business is termed as awareness. It is how well a consumer can recall what the brand stands for.
- Brand Association
Brand Association is how many associations that a brand forms with its consumers, employees, celebrity endorsements. It gives a clear picture of who and what the brand associates with, and if done right, it can help you to create a positive image.
- Perceived Quality
Perceived Quality is the expectations that consumers set from a brand. The brand has to not only meet but also topple their expectations with each purchase as it is expected from them.
- Brand Loyalty
Brand Loyalty is an anchor for consumers who often reject the alternatives and prefer to procure and avail services from a brand, time and again.
Brand Equity Model
It determine the way in which your brand equity will be slowly constructed. There are numerous implementable brand equity models used by marketing experts, of which the following are the most effective. Keep in mind that the components vary across different equity models.
- Aaker Model
Aaker Model is developed by David Aaker, who defines brand equity as a group of assets and liabilities. His model constitutes brand awareness, brand loyalty, brand association, perceived quality, and proprietary assets as components.
- Keller’s Model
Kevin Keller’s model has a very deep approach towards brand equity and is among the widely popular brand equity models. The model stresses four major components that include, brand identity, brand meaning, brand response, and resonance.
Apart from these two models, the Brand Asset Valuator (BAV) Model and Brandz Model are also used to establish everlasting brand equity.
Measuring Brand Equity
Measuring something which is intangible is an arduous process. You may not get the refined results of measurement but can get a vague idea about the level of it. There are broadly two methods of measuring it :
Economical data used for measuring brand equity is data in the form of sales, revenue, ROI, HR data, etc. These are exact numbers that indicate how well a brand is doing currently and its growth or downfall over a period. Economical data cannot determine something that hasn’t happened yet.
Emotional data is slightly difficult to tabulate and represent. It uses the past experiences of consumers and how their decision impacted brand equity. Furthermore, emotional data can be used to draw projections about what the future holds for the brand at the current pace. Emotional data paints a clear picture of what the consumers expect from your brand and the trust that they place in it.
Brand equity is difficult to amass and takes years to build. It requires a different approach from the traditional sales bolstering approach as it focuses on associating value with a brand. It should be the number one focus for any business that is in for the long haul and is there to become more than a substitute brand.
About The Go-To Guy!
The Go-To Guy! is a creative branding and marketing agency that builds memorable brand identities, activates online presence, and brings brand engagement to help companies grow online, offline, and across multiple platforms