Do you build or erode brand equity? And are you wasting an opportunity for the future?
Marketing can be full of phrases and metaphors that do not transfer across the business landscape. However, when we talk of brand equity, it is a phrase that the accountants among you will recognise!
What is brand equity?
Just as in our year-end accounts, brand equity can be described as the brands assets or liabilities that are linked to a specific brand. They can be identified by analysing four key areas, which are brand awareness, perceived quality, brand association and brand loyalty.
As the title suggest, it is important to recognise how aware your target audience is of your products and services. Does your company have good ‘front of mind recall’? In other words, if a potential customer was stopped in the street and asked about your market sector, would they name your company in the top three suppliers?
Brand awareness is often undervalued and marketing campaigns rarely fully capitalise on this entity. Remember, brand awareness can be both an asset and a liability!
Perceived quality has wide connotations. It is a source of competitive advantage, as consumers will pay a price premium and remain loyal if they perceive your product has a higher perceived quality than the products of your competitors.
This is the method of connecting consumers to the brand. It can be achieved in a variety of ways, whether it be through celebrity endorsement or product image, it is a deep rooted psychological connection between the individual and the product which attempts to make the link from an inanimate object to a product with a personality that resonates with the consumer.
This is at the heart of brand equity. Products or services that develop consumer loyalty can have significant brand equity. Apple is a good example of this. It’s small but very loyal following sustained the company through its downturn and provided the foundation for its recovery in recent times.
Building value in your brand
A brand can have significant value and can prove to be a financial multiplier. This can only be achieved if you have a clear strategy and understand how to build and protect value in your brands.