Why Brand Equity Should Be A Part Of Every Business’ Strategy
Brand equity has become a widely used term in the marketing industry over the past decade. Defined as a brand’s commercial value, or a brand’s ability to create a lasting and positive differential response in the marketplace, brand equity is more than just a buzzword or a marketing cliché. In fact, defining and developing brand equity should be at the forefront of any company’s business strategy, as it’s vital for effectively engaging with customers and stakeholders to drive brand loyalty, contributing to the further growth of the business.
Consistent, strategic branding leads to a strong brand equity, which means the added value brought to your company’s products or services that allows you to charge more for your brand than what identical, unbranded products command.
There are lots of examples of companies that have successfully grown their brand equity – Apple, Google, Coca-Cola and Toyota consistently rank at the top of the ‘world’s most valuable brands’ lists. These companies get their value from how they are perceived by customers; people are willing to pay a higher price and are more likely to buy or use their products and services due to their brand equity.
What is the value of my brand?
Determining your brand’s value can be tricky as it’s not tangible or measurable purely by numbers. High brand value, or equity, can mean that your brand is easily recognizable, or the first recalled when a specific prompt is given. It can be that customers are willing to pay a higher price for your products or offerings than they would for competitor brands, or that your brand is often among the first to be recommended when someone asks for a referral.
As entrepreneur and marketer Seth Godin put it: “A brand’s value is merely the sum total of how much extra people will pay, or how often they choose, the expectations, memories, stories and relationships of one brand over the alternatives.”
Building a high equity brand
It’s not only well-established brands that can benefit from brand equity. Start-ups must consider the value of their brand from the get-go, and are in fact at an advantage as they have the opportunity to develop their brand DNA from an early stage, enabling them to define their position and cut through in a crowded marketplace.
Defining your brand’s core values, image and messaging from the very start, and making sure your customers know them, believe in them and have a positive connotation to them, is crucial. But what it all boils down to is finding that point of difference – what sets you apart from your competitors? What qualities do your service or products have that you can’t find anywhere else?
How to maintain brand equity?
Once you find that differentiating factor, have clearly defined your brand’s values, and have successfully communicated it to your customers in a way that connects with them, it should take little effort to maintain your brand equity. But the reality is that as brands grow it is easy to lose sight of the initial core values. It is paramount that these values are not just an external proposition, but deeply embedded into the internal company culture. Research shows that 95 percent of the typical workforce does not understand their company’s strategy – how can you maintain a brand equity if you don’t understand the strategy?
Tools like StrategyBlocks 4.0 enables CEOs and other executives to turn strategic vision into tactical execution, easily sharing data across departments and business units, and cultivating company-wide involvement in strategic execution.
Ultimately brand equity equals customer brand awareness and customer loyalty, and the only way to maintain it is to live and breathe the brand and its values at all levels of the organization – both internally and externally.