The value a customer places on a brand is defined as brand equity. Consumers are more than willing to pay premium prices or go extra lengths to make a purchase primarily because of this. Furthermore, an organisation with a high brand equity attracts the right talent and investors.
Brand equity is created as people become more aware of a brand and become more personally attached to it. This is ultimately what organisations hope to achieve and because brand equity grows over time and is based on customer interactions with a brand, marketers must develop detailed strategies to drive brand equity.
Long-term customer loyalty or charging a price premium over a no-name product can be used to determine brand equity. Alcohol beverages are a perfect example of this. During the lockdown in 2020, people bought alcohol regardless of how ridiculously high the price was. It wasn’t because of its scarcity but loyalty to the brand.
Customers purchase extended product lines from brand brands. People who buy electronic gadgets from the same supplier (Apple and Samsung users are excellent examples), new products are perceived just as favourably, and, finally, brand equity directly affects stock price, market share and son on.
There are clear benefits to establishing brand equity but it takes a significant amount of work and research to build and maintain this status. It all starts with conducting research into a target audience’s values and needs, as well as identifying what makes your brand unique.
Once in place, organisations should then:
- Create lasting impressions – Using exceptional customer service to shape customers’ perceptions and opinions of the brand.
- Forge brand loyalty – Deploying customer retention strategies.
- Establish brand awareness – Ensuring that customers know the brand’s products and services through various communication touch points, e.g. social media presence, CSR projects and sponsorships.
- Maintain positive brand perception – Customers who have a warm feeling toward a product are more likely to become loyal customers. Additionally, positive feelings such as excitement, fun, peer approval, security, trust and self-respect can be attributes that strengthen the brand.
- Clear brand messaging – Making the components that represent the brand is always recognisable to customers by communicating what the brand means and stands for. Marketers must ensure that brand campaigns run for a longer period of time for consumers to register messages and connect them to branded products.
- Consistency – Be consistent once the brand has been established. Using consistent typefaces and style guides is part of this by creating brand templates, guidelines, and CSI manuals which everyone in the organisation must adhere too.
These steps are critical because brand equity is based on the idea that a recognised brand that is well-established and reputable outperforms a generic equivalent. It is based on customer perception: customers are more likely to purchase a product that they recognise and trust.
Marketers must take the lead by taking steps to build and consistently measure brand equity to increase sales and prestige – both of which are required for a brand to be truly successful and improve its equity.