Giant logo on your shirt or bag? No problem – as long as it’s a brand you’re passionate about. When they shop, customers will typically encounter generic brands that they’re relatively with settling for and brands that they know and love. The latter are the ones they’ll go out of their way to get, the ones they’re willing to pay more for, and the ones that they’ll even freely advertise for.
For business owners, going from “I’ll settle for it” generic to an “I love this” brand is the dream. Not only does it mean you can charge more, but it means your customers will come searching for you, knocking down your door and lining up around the corner (or signing up for online wait lists) just to get their hands on what you’ve got.
How you get from A (generic) to B (beloved brand) is, of course, more difficult than it sounds. If it was easy, then being the it brand would actually be the generic thing to do! So, let’s look into exactly how you can strengthen your brand, and what “brand equity” can do for your business.
It All Starts with Brand Equity
A huge advantage over the competition, brand equity is that “x-factor” value that makes a product or logo recognizable – and covetable. Even when two products are absolutely identical, brand equity is what makes consumers reach for one over the other, and rarely without even examining the price difference. Usually more expensive than generic products, products with brand equity cost more for one major reason: so that the company can keep branding!
Brand equity is a positive feedback cycle; the more that a company builds, the more money it has to build even more brand equity in the future. This is exactly how companies like Nike, Kleenex and Tylenol have managed to become the industry icons they are today. As they invest more money in advertising and messaging, they become more recognizable. And, because they keep showing up again and again, they develop a reputation for being reliable – and with higher quality to boot.
How to Build Your Brand Equity
Developing brand equity is rarely fast or cheap. But, when it begins to accumulate, it’s one of the best predictors of success for businesses across industries. In order to start building brand equity, there are three main factors to keep in mind:
- Perception. The customer’s perception determines the amount of brand equity for any product. If customers believe the branding, then the perception is positive. While a company can control the brand and messaging, perception lies solely in the hands of the consumer.
- Effects. How your brand is perceived will elicit either a positive or negative effect. Positive begets positive, allowing your company to grow. Negative perception, however, is a business emergency – especially when you’re investing in building brand equity.
- Value. There are tangible and intangible values to consider when weighing positive and negative effects of consumer perception. Positive perception can improve tangible value, like profit, and intangible value, like overall goodwill. When a brand suffers from negative press or a scandal, both intangible and tangible value are likely to decrease.
Keeping these three moving factors in mind, you can begin to take actionable steps to increase brand equity for your business and its products. As you do, remember that one of the best ways (maybe the only real way) to develop brand equity is to build trust with your consumers. If this relationship is superficial or fake in any aspect, your efforts to develop brand equity will struggle to gain real footing.
The Four Steps to Developing Brand Equity
1. Start with awareness
Making sure people know your brand is the first and most fundamental step to developing brand equity. If enough people aren’t aware of your brand, then it’s impossible to build that essential brand power. Of course, as you work to create more awareness, it’s important that your audience is perceiving your brand in the right way. Being consistent, having excellent customer service, and sharing a compelling story helps to ensure that your audience is relating to your brand in a positive way. Another important way to start building more brand awareness is through ongoing relationships, which means staying in touch with your customers and finding unique ways to continue offering value.
2. Share your brand’s commitments and meaning.
One of the most essential aspects of building brand equity is giving your audience a reason why. Why do they want to give you their money? Why are you different? Why can they trust you? By sharing your story and what your brand is doing to make a difference, you can help develop a positive rapport with your growing customer base. In addition to general (and genuine) goodwill, your brand also needs to demonstrate its commitment to helping its customers, which means creating a product that is valuable and that actually meets and exceeds their needs. In other words, when people hear your brand’s name, what do you want them to think? The companies with the best brand equity are known for both their performance and their social commitments.
3. Create opportunities for positive perception.
Whether you’re trying to build brand equity or not, your audience is already judging you with their feelings, experiences, and emotions. The more positive these feelings are, the better. But, of course, if the perception leans towards the negative end of the spectrum, then there’s major work to be done. Keep in mind that positive perception almost always comes from a feeling of “warmth”, which means that, for one reason or another, people like your brand and they feel good when they think about it. Developing lasting brand equity is all about generating more opportunities for your target audience to have a positive interaction with your brand. Whether in the form of an advertisement, an email, or a how-to video, the more chances your customers have to remember why they love your brand, the more likely you are to reap the benefits of powerful brand equity.
4. Develop real relationships.
Building a community for your audience to actively participate in is another crucial step in developing brand equity. Thankfully, the internet and its myriad of social platforms has made this much easier, even for the smallest of brands. Developing real relationships is so important because it creates psychological and emotional bonds – ones that make your customers want to be loyal to you. The more you foster these relationships, the more brand equity you’ll start to generate.
But, remember that real relationships can’t be faked. This step takes work and passion. Trying to buy relationships or talk to people only to close a sale or build a list will only result in negative effects. If building brand equity is your goal, then being real and authentic with your customers is the only way to go. Some of the most successful brands have found that ambassador programs are one of the most effective ways for creating brand equity. Not only are brand ambassadors or influencers your biggest cheerleaders, but their enthusiasm for your brand is contagious. As an added bonus, because brand ambassadors were/are customers, they know exactly how to talk to other customers, making every interaction that much more authentic and genuine.
Measuring Your Growing Brand Equity
As you start spending more resources to develop brand equity, you’ll want to have a way to measure your results. Because developing brand equity is a long-term game, keeping your eye on these three metrics is essential for your overall success.
As your overall brand equity increases, so should your finances. If your marketing is working (and brand equity is growing), then you’ll be able to see things like:
- Increased market share
- Improved profit and revenue
- Positive growth rate
- Lower cost to retain and acquire customers
Long-term success for any business is determined by the overall strength of the brand. In order to determine whether or not your attempts to increase brand equity are working, you’ll want to look at factors like:
- Brand awareness
- Brand accessibility
- Customer loyalty
- Customer retention
- Online buzz
- Social media tags
The only way your business will succeed is if it has customers. Knowing how your audience is responding to your efforts is one of the best ways to understand whether or not you’re successfully creating brand equity. When tracking your consumer metrics, you’ll want to look at:
- Purchasing behavior
- Emotional connections
- Social media references and tags
Most consumers make a decision between one product or another in a matter of seconds (seven seconds, if we’re being precise). That means that, now more than ever, brand equity is one of the biggest determining factors of whether your company will survive, let alone thrive. If your audience recognizes your brand and instantly feels good, then you can officially say goodbye to the world of generic products and hello to unlimited success.