What is Brand Equity and Why Should You Build it in Your Business?
In this post I'm going to share some of the benefits of committing some quality time, energy and resources into building the Brand Equity of your business.
There are many misconceptions about branding and brand equity. Some people believe branding is just about design.
Ask the average person to define a companies brand and they will start describing the company logo.
Unfortunately there are many business owners who also don't fully understand the depth and breath of branding.
Yes the logo is one representation of the brand as it does the work of visually identifying a product or service related to the company. But if you just stop there you're not branding - you’re tagging.
Admittedly, the origin of branding came from placing a mark or symbol on cattle, to identify who they belong to, but the practice of branding has developed immensely since then.
It's not very difficult to place an image on a product and call it a brand. It's a bit like printing some visuals on a T-shirt and claiming to have a clothing line. There is much more to Branding than names, fonts, colours and graphics.
From developing a brand mission statement and vision, are brand strategy, establishing a brand voice, and defining a brand promise.
It is not a process that can simply take place in the office while trying to juggle all the other tasks involved in running your business.
Creating a sustainable, iconic brand can take weeks, months and even years of brainstorming and whiteboarding, reviewing and redesigning, scripting and rewriting and split testing in different customer segments.
It is very easy to get a brand wrong.
We will never know or be able to number the amount of brands that have been developed and failed miserably, never seen the light of day in the marketplace.
But those companies that understand the correct process of branding can be clearly identified just by looking at those brands which has stood the test of time. And even looking at those younger brands (less than 20 years old) that have quickly risen to the top of their industry and stand head and shoulders above their competitors.
So What is Branding?
Building Brand Equity goes much deeper than the Imagery and design elements involved in branding.
It explores the emotions and feelings you want to invoke in people when they come into contact with your brand and business.
It's about creating an experience for the user / customer.
It's about influencing how you are perceived in the marketplace and what people will come to expect from your products and services.
What the Text Book says
Wikipedia, the free online Encyclopedia defines Brand Equity as follows;
“A phrase used in the marketing industry which describes the value of having a well-known brand name, based on the idea that the owner of a well-known brand name can generate more money from products with that brand name than from products with a less well known name, as consumers believe that a product with a well-known name is better than products with less well-known names."
The investing education and trading simulator, Investopedia defines Brand Equity as follows;
"The value premium that a company realises from a product with a recognisable name as compared to its generic equivalent.”
In the Real world
If you can create Brand Equity for your products, your consumers will perceived them as being better or more valuable and will be willing to pay more for them than for the same products from your competitors
Your Brand can be one of the most valuable assets your company has, Why? because if you can position your brand as the market leader, customers will buy your products over your competitors.
Once your existing customers become "Brand Loyal", they will begin to market your products and services to new and potential customers for you. Going from Customers to raving fans.
That is why it is so important to get your business branding right from the beginning.
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One thing I have found to be sure, is that the determining factor in the creation of positive or negative Brand Equity is in the hands of the customer.
You can say what you want about your brand.
Your tagline and slogan can be loaded with positive and endearing wording, but if this does not translate to a positive customer experience, this will damage and decrease your Brand Equity.
Just think about the worst experience you've ever had with a company.
You could have been kept on hold for 15 minutes when trying to sort out an issue with your Internet provider, only to be told that there is nothing they can do.
You could have had to return a faulty product back to the supplier, only to be told that you'll have to pick up the bill for the delivery.
If you left that provider because of such a negative experience you had with them, would you suddenly return to them as a paying customer simply because they had a new logo?
I doubt it?
I know very easy it is to get consumed in the process of building and developing your own business, products and services, and forget to look at things from the customer's perspective.
So when you're in the process of developing your brand for your own business, always try to remember your own customer experiences.
Getting it right
If done correctly, your brand should be the embodiment of your business.
Your brand should have its own personality that reflects the personality of the company.
Your brand should have its own voice that speaks in the language and tone of the business.
Your brand should represent the values held by the company.
Logo’s can be redesigned and updated, colour pallets, graphics and fonts can change, but the perceptions and opinions in the mind of a customer is very very difficult to reset.
As I mentioned in my post What Is The 3V STRATEGY and How Can Your Business Benefit From It? , The first V in my 3V Strategy stand for Vision, which focuses on developing and building Brand Equity in your business.
If you start with this as the core of your business development strategy, you will have a strong brand, with the potential of building positive and valuable Brand Equity that will set you apart from your competitors, and secure and sustainable further for your company.
How to do it
Here are a few things you can do to begin create brand equity for your businesses products and services.
Making products and services memorable
Making the user / customer experience enjoyable
Include a Social / Sharable element in your products and services
Make them easily recognisable
Aim for superior quality over your competitors.
Do something your competitor is not doing.
Ensure your and products and services are consistent and reliable.
Build a customer community around your business.
Allow customers to co-create products
Encourage user feedback through your website and social media channels
Invest in brand development to see profit margins and market share increase
Creating Brand Equity is strategically crucial, but can be very difficult to get right and if you get it wrong, the cost can be detrimental, even fatal to your business.
There are experts you can hire who have developed strategies and tools to help your business get it right.
If you don’t do anything else - to develop Brand Equity in you business, simply respect and value your existing customers, provide them with outstanding customer service, and they will tell others how great your business is.
Have I miss anything?
I want to hear from you!
Is your understanding of Brand Equity different?
Do you take a different approach to developing Brand Equity?
Do you have any questions about anything in this post?
Please share and discuss below.
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