The role of marketing is to bridge the gap between what companies have to sell and what customers want to buy. In this constantly-evolving customer journey there are many factors the influence the strength or weakness of a particular product or service, that results in enormous growth or an epic fail.
As marketing strategies evolve and businesses oscillate between what they believe customers desire and what premium price they can charge those customers; there lies the Brand Equity. In other words, brand equity is nothing but the value of a brand. A good brand equity enables business to get better pricing and thereby generate better revenue for the company. Brands for the most part tend to be the most important intangible assets of a company. However if a company cannot calculate its brand equity how then can it work towards improving it with consumers or leveraging value for its stakeholders?
There are 4 schools of thought towards arriving at an effective Brand Equity Model.
Emotions: The Brand Equity Model devised by Kevin Lane Keller.
The concept behind this model is rather simple and focuses on emotions. For a marketer to build a strong brand, they must shape how customers think and feel about their product; deliver the right type of experience before, during and after the sale thus ensuring that customers have very specific thoughts, positive feelings, beliefs and opinions about the brand so that they can become advocates and evangelists for the brand.
In order to achieve this ideal brand equity, a business must create saliency with customers (i.e. customers identify with the brand and with the solution); create meaning / value for customers (i.e. provide real value performance - fulfilling customers’ need and imagery - Brand Tone of Voice and Messaging strategy); create positive response from the customer (i.e positive judgements, emotions and responses - how people perceive the brand) and create a lasting relationship with the customer (i.e resonance - the symbiotic relationship between the brand and the customer).
Recognition: The Brand Equity Model devised by David Aaker.
The concept behind this model is to leverage / harness recognition and is simpler than the Keller Brand Equity model because it sees brand equity as a mix of Brand Awareness, Perceived Quality, Brand Associations and Brand Loyalty.
In order to achieve ideal brand equity a business/ brand must have Brand Awareness (i.e. how well-known the brand is, is it remembered positively and how differentiated is it by the public); Perceived Quality (i.e. how consistently is the brand known to deliver good quality of product/ service); Brand Associations (i.e. when people ‘see’ the brand, what/ how do they ‘feel’ ? The brands known USPs, extensions and differentiators. Patents, Intellectual property etc. add to the brand value and competitive edge); Brand Loyalty (i.e. how loyal are your customers? Especially with confusingly similar competitive products and services).
Vitality & Stature: Brand Asset Valuator (BAV) Model
The BAV model focuses on the future rather than reflecting on the past. The model is built around 2 pillars - Brand Vitality (i.e. Differentiation - the ability to stand out from the competition and Relevance - how meaningful is the brand in the eyes of consumers); and Brand Stature (i.e. Esteem - the perception of quality and popularity of the brand in the eyes of consumers; Knowledge - how well recognised, remembered and preferred by consumers).
Every brand; be it a product or service solution has a lifecycle. It starts off as a ‘new brand’ that consumers don’t know much about (be it its differentiation or relevance or knowledge or prestige). Over time with money and effort, it understands its consumers and their pain points and slowly builds its differentiation and relevance. It evolves into a brand in development. Thought consistency and repetition, it builds its mettle to evolve into a leadership role with hundreds of thousands of customers. Over time, with new competitors, evolving customer needs, the brand slowly experiences loss, forcing them to reinvent themselves or develop innovative solutions and the cycle continues.
Customer Behaviour: Brandz Model for Brand Equity
This model is developed on 5 sequential steps conducted via consumer market research with the specific intention of understanding share of wallet of a specific brand in relation to the competitive landscape.
Presence (i.e. how familiar is the customer with the brand based on past trials and brand promise).
Relevance (i.e. does the brand’s product or service fulfill an existing customer desire or pain point).
Performance (i.e. does the brand’s product or service deliver to what it promised or what was expected by the customer).
Advantage (i.e. does the brand’s product or service offer something better or have an unfair competitive advantage over similar solutions available in the market).
Bonding (i.e. does the brand have an emotional and psychological bond/ advantage over other similar brands such that customers will not be tempted to compromise).
Ways to measure Brand Equity for your company:
For any business to truly calculate and track its core brand equity drivers there are 3 metrics that marketers must measure…
1. Financial Metrics
Having and relying on solid financial data (i.e. market share data, profitability, revenue, price, growth rate, cost of new customer acquisition, cost to retain customers, branding and marketing investments) to confirm that the brand is not just profitable but the business is viable is a critical element. Financial metrics allow marketers to demonstrate how important your brand really is to the business today and will be in the future.
2. Brand Strength Metrics
Market fluctuations and customer behaviour changes are common. A strong brand has a greater likelihood of surviving downturns. Tracking parameters include Brand Awareness, knowledge of the brand and its products and service lines, product accessibility, customer loyalty and retention, licensing potential, brand stickiness (buzz), social media performance and impact; these will give you a real picture of not just how well known your brand is but also how well loved your brand truly is.
3. Consumer Metrics
Companies create brands (at least brand building blocks); however it is the customer that builds a brand. Tracking customer behaviour's, sentiments and trends ensures that your brand stays relevant, continually builds emotional connections and creates value across both offline and online channels.
The 5 components that build remarkable Brand Equity:
Awareness: Becoming the ‘best kept secret’ does not help your company or your brand. If you want to succeed in the marketplace your brand must be out there.
Communicate your Why: Customers are attracted to companies that produce useful products, that are environmentally responsible and genuinely care about the wants, needs and desires of their customer.
Brand Perception: It is not enough to create a brand and advertise the same. Creating, managing and maintaining Brand Perception is critical to future growth and market success (i.e. understanding what customers believe your product or service represents).
Feedback: Positive or negative reactions from customers directly impact not just your company’s reputation but also the bottom line and future of your company. Go out of your way to foster positive customer feelings and judgement.
Value: Value exists in both tangibles like revenue and profit as well as intangibles like brand awareness, goodwill and advocacy. Ensure that Value is created and delivered consistently across all touch points during the customer value journey. Build a strong loyalty bond with your customers.
Conclusion: In today’s world of omni marketing channels, evolving marketing strategies and changing customer behaviours, businesses can only survive and thrive when their customers are happy. Customer happiness, while fleeting, can only be achieved by offering unique and quality products and services that in turn build a strong brand. As customers express new wants and needs, they look for better solutions (and brands) that fulfill those needs quicker and better. Over time, brand building and marketing efforts ultimately create and increase brand equity for the company. A strong Brand Equity not only ensures goodwill but also enables product and service expansion, while building customer loyalty and retention.
Related Reading: Ways to uncover your customers true pain points, Unleashing the power of experiential marketing, How Influencers marketing actually accelerates growth and sales
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