Why do we trust certain brands? Why are we willing to pay a premium for a product from a particular brand, when there are similar products available for a fraction of the price? What makes us proud to showcase the fact that we are using a particular brand’s products? One of the main factors that separates premium brands with loyal customer bases from their competitors is their brand equity.
In this article we will define brand equity, discuss how to effectively build and measure brand equity in your marketing, and consider a couple examples.
Brand equity is a term used in the marketing industry to describe the worth of a brand or its value. The value of a brand is determined by its customer based on their perception of and interactions with the brand. A brand’s equity would take into account all of the negative feedback and positive interactions it has with its customers to land on whether the overall feeling is positive or negative.
Brand equity is easily recognized in consumer goods like clothing, jewelry, and cars. The brand equity of a designer label selling graphic t-shirts is usually significantly better than the brand equity of a generic brand.
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This positive brand equity of a designer label allows them to charge a much higher price for a similar product. The designer label has already earned the trust of the consumer just by having their name on it. That is brand equity. Branding is a valuable asset that can help companies increase their sales.
Brand equity models are designed to help marketing professionals determine how to create value around a brand to ultimately build brand equity. Brand equity models can be helpful when crafting marketing campaigns.
A customer-based brand equity model is centered around the belief that a brand’s success is directly correlated to customers’ feelings, attitudes, and overall perception of the brand. Brands should have a general understanding of how their customers think and feel about them.
Keller’s brand equity model is the most widely known customer-based brand equity model. It has also been called the brand resonance model. Kevin Lane Keller is a marketing professor at Tuck School of Business at Dartmouth College, and he wrote the widely used text, Strategic Brand Management.
He believes that in order to build a brand with value, you have to mold how your customers think and feel about your product. Brands need to create experiences for their customers that make them think positively and feel positively about the brand.
Focusing on cultivating a strong brand equity starts with giving your customers positive experiences that will keep them coming back, make them want to recommend you to other people, and prevent them from shopping elsewhere.
Keller’s brand equity model has four steps with six building blocks and four questions to help brands achieve this. The questions asked in this model are often ones your customers will think to themselves when evaluating any brand.
The steps must be completed in number order, meaning you can’t complete number four without first completing number one. In step one, you’re just looking to make sure people are aware of your brand and that it’s recognizable to them.
In step two, you’re communicating what your brand stands for and what it means. In step three, your customers are responding to your brand by judging your brand’s quality, credibility, consideration, and superiority. In the fourth and final step, your customers feel a deep, psychological bond with your brand.
Brand resonance is the pinnacle of Keller’s brand equity model. It’s the last, hardest, and most desirable step to reach. You can’t achieve brand resonance until you’ve successfully implemented the other three components of the model. Brand resonance describes the emotional relationships customers have with your brand.
Building this relationship and cultivating brand resonance helps your customers feel a strong attachment to your brand. The goal is to create a long term relationship that keeps your customers coming back and also turns them into brand advocates. Brands that properly execute brand resonance are able to have their customers do their best marketing for them.
There are two main categories of methods to measure brand equity: quantitatively with numerical data, and qualitatively with emotions.
Data like sales numbers, website traffic, and social media engagement all come in a numerical format that is easy to measure and track. Evaluating your sales, how much your audience engages with you on social media, and if they like your website can help determine your brand equity.
Emotional, or qualitative, data is equally as important when determining brand equity. The feelings and emotions your customers have about your brand will help explain their purchasing patterns and how they’ve categorized your brand in their minds.
An important part of building brand equity is making sure people are aware of your brand. Making your branding and marketing materials consistent across all mediums is a great step toward building brand equity.
Your social media profile pictures, website graphics, and product packaging should all have cohesive logos, colors, and messaging. This helps create continuity in the minds of consumers, which makes your brand more recognizable.
After you’ve made your brand recognizable among your customers, you need to communicate what your brand stands for. What values does your brand have? Does your brand participate in any social justice initiatives? Answering these types of questions for your consumers helps them start to feel connected to your brand based on common values.
After you’ve made people aware of your brand and communicated your brand’s values, you’ll want to start creating positive feelings for your customers regarding your brand. This can come from a smooth purchasing process, wonderful customer service, or positive attention a customer receives when wearing your product.
Achieving the previous points we’ve discussed leads you to create a customer loyalty to your brand. This can be done through creating loyalty programs, sharing your customers’ posts to your company social media account, and online events for your top customers. Maintaining customer loyalty is one of the most difficult tasks that yields some of the highest rewards for companies.
Harley-Davidson is a great example of a company that has built and maintained brand equity and extreme customer loyalty over a long period of time. Customers wear clothing adorned with the logo, with even some of the biggest brand enthusiasts sporting tattoos of it. The brand has come to stand for freedom, power, and being an outlaw.
Harley-Davidson built their brand equity by creating a network of biker enthusiasts throughout the world. When bikers run into each other when wearing Harley-Davidson gear, it shows common ground for a love of bikes and a specific lifestyle. Their customers are very loyal, and they do a lot of advertising for them simply by sporting their products.
Another great example of a company that’s successfully grown their brand equity is Starbucks. They’ve built their brand around the customer with their commitment to making the perfect drink, serving communities across the world, and with the way they interact on social media. They are frequently interacting with their customers’ posts across all social media channels.
Starbucks has created a loyal network of customers that recognize the brand anywhere, know their favorite drink or product from them, and love to talk about their love of the brand with anyone who will listen. Their loyalty program and mobile app makes ordering easier for the customer, and encourages them to keep coming back.
Brand equity is a marketing term that describes the value of a brand. A brand’s worth is determined by its customers based on their experiences and thoughts on the brand. Brand equity is easily recognized in products like clothing, jewelry, or cars.
The positive brand equity of a designer fashion label allows them to charge a premium for a similar product sold inexpensively by their competitors. The designer label has already earned the trust of the consumer just by putting their name on the product. That is brand equity at its finest. Branding is a valuable and measurable asset that can help boost sales.
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Brand equity models help companies determine how they’re going to create value for their customers centered around their brand. Ultimately they help companies decide how they’re going to build brand equity. The most widely known brand equity model is Keller’s brand equity model. This model is centered around the belief that you have to shape how your customers think and feel about your brand in order to build value around it.
Creating brand equity begins by providing positive experiences for your customers that makes them want to come back and recommend you to other people. There are six building blocks to Keller’s brand equity model: salience, performance, imagery, judgements, feelings, and resonance. The steps have to be completed in order, with resonance being the final, hardest, and most desirable step to reach. Resonance is where customers form a deep, emotional bond with a brand. Following Keller’s brand equity model is a great way to learn how to effectively build and measure brand equity in your marketing.
Brand equity can be measured qualitatively and quantitatively. Numerical data like sales, website traffic, and social media engagement fall under the quantitative category. The feelings your customers have toward your brand fall under the qualitative category. Both methods are helpful in measuring, evaluating, and understanding brand equity.
Harley-Davidson and Starbucks are two examples of companies who have built strong brand equity over the years. To spark ideas for building brand equity, make a list of your favorite brands across a multitude of industries and start researching the things they’ve done to make you have such a good impression of them. We hope this guide to brand equity, how to effectively build it, and how to measure brand equity helps increase your brand’s value and cultivate a loyal customer base.