Do you know how much your brand is worth? One key measure is brand equity - the value that consumers see in your brand. Shweta Jhajharia explains what brand equity is and how to improve yours
The value of brand equity
The brand equity of a business comprises all the associations, emotions and experiences that come to mind when a consumer is exposed to the brand. What kind of bond is there between you and your customers? The stronger that bond, the higher your brand equity.
And what does strong brand equity get you? It can get you widespread recognition.
As a side effect of success, some brands even manage to become part of our everyday lexicon. Think about someone sipping coffee from a thermos, but dreaming of a Bacardi and coke, while using a biro to write a reminder on a post-it note to buy a new hoover.
Learn about the importance of creating a strong, distinctive brand identity - including your business name, logo and website - when starting your business from the Start Your Own Business podcast.
Boosting your brand equity
There are many ways to build brand equity. Your communications, your product performance, your customer service, even your brand name can strengthen or degrade your brand equity.
Here are four ways to ensure your business is focused on the right sort of brand equity development.
1. Quality products and services
This is the backbone of your brand. It's vital that you deliver a quality product to your consumers if you want repeat purchases and good word of mouth.
Unfortunately, businesses in every industry make the mistake of releasing products just to appear innovative. Releasing a product that hasn’t been fully tested and doesn’t match the performance expectations of consumers can erode brand equity.
2. Competitive analysis
A strong brand is a brand that can adapt to market changes. To be such a brand, keep an eye on industry trends and your competitors’ activities.
An effective way to build brand equity is to target a niche: meet a specific need that no-one else is currently satisfying. This radiates both innovative thinking and great understanding of your consumers. Being admired and respected is the hallmark of strong brand equity.
3. Consistent brand image
When you understand the market and your place within it, you need to communicate that to consumers in a consistent and engaging manner.
Your products and pricing are hugely important, but so are other aspects of your business. From your brand name and straplines to your social media activity, every part of your business that comes into contact with customers and potential customers must be refined to ensure it is highly targeted.
Establish your brand image from the start, and model your business accordingly. If you operate in the premium sector of your industry, be classy. If your product or service is about putting a smile on people’s faces, be fun.
Be consistent. Consumers know what they like, and they like what they know. Be in control of what they know.
4. Listen to customers
Brand equity resides in the minds of your customers. Listen to them.
Coca-Cola: Here’s New Coke.
Coca-Cola: Sorry about that. Anyone for Classic Coke?
Coke listened to customers and remedied the mistake. But they could have avoided it altogether, by asking consumers if they actually wanted the world’s most popular fizzy drink to taste different.
Understanding brand equity is important, no matter what stage your business is at. You must create a positive image in consumers’ minds if they are to become repeat customers or a part of your referral strategy. If you achieve this, your brand will strengthen and you’ll see real growth.
Written by Shweta Jhajharia is principal coach and founder of Growth Idea.