7 Key Elements to Build a Stronger Brand Equity
Brand equity is the value gained from customer perception of a brand name rather than the product or service of the brand. It may be positive or negative—if customers hold a brand in high regard, it has positive brand equity. Conversely, a brand with negative brand equity constantly under-delivers, falls short of customer expectations, and creates negative word-of-mouth.
Marketers must closely monitor customer engagement and sentiment to develop positive brand equity. Businesses can use marketing tools to track customer behavior, perceptions, engagement, and loyalty to assess positive and negative impacts on brand value.
Essentially, there are seven key brand elements necessary to build brand equity, generate leads, and sustain long-term growth. Each one contributes to the overall value of your brand, and evaluating these elements can help you determine where you need to focus your marketing strategy and efforts.
1. Brand Awareness
Brand awareness is a vital component of brand equity. Brand awareness occurs when a customer recognizes a brand and associates it with a product or service. Awareness is the initial stage of establishing brand equity since customers must first be familiar with the brand before it can start generating value.
Creating brand awareness can be difficult, especially for startup businesses, but there are several ways for you to reach customers. Search engine optimization (SEO), social media marketing, and referral programs are all popular methods brands use to get customers to engage with and remember the brand. Understanding target audiences and customizing marketing content to their specific interests or behaviors can make each engagement more memorable.
2. Brand Association
Brand associations refer to the mental connection a customer forms between your brand and an idea, image, emotion, experience, person, interest, or activity. These connections can be positive or negative—heavily influencing purchasing decisions.
Companies want to create positive associations that are positive, simple, and immediate. For example, when you think of athletic shoes, Nike is one of the first brands that springs to mind. When you need information or answers, you Google it.
Brand associations build over time through repeated and consistent brand experiences. Celebrities and influencers can also help generate brand awareness through their platforms and high-profile commercials like Super Bowl ads.
3. Perceived Quality
Perceived quality is critical in building brand equity and is one of the biggest stimuli on customer purchasing behavior. Perceived quality is the sense of excellence a customer has about a product, service, or brand based on its ability to meet expectations. More importantly, perceived quality has the potential to spread its measure of excellence to other aspects of the brand, consequently boosting brand equity.
Features, durability, performance, conformance, and reliability are among the aspects that determine the perceived quality of a product. On the other hand, the perceived quality of a service depends on factors like communication, competence, credibility, empathy, and responsiveness.
4. Brand Experience
A customer’s interactions with a product and the brand as a whole constitute their brand experience. It encompasses not just the product but also their pre-sale, sale, and after-sale experiences. When a customer has a positive experience with a brand, they will view it as superior to other brands and, as a result, choose it over competitors.
Brand experience defines how customers feel about a brand, fostering brand loyalty and increasing brand equity. Brands can elevate the experience by evoking positive feelings from customers and designing emotionally engaging customer experiences.
5. Brand Loyalty
Brand loyalty is another crucial element of brand equity that businesses want to cultivate. Customers who continue to buy from and positively engage with your brand are valuable assets to your brand equity. These customers use, wear, share, and promote your brand to their family, friends, and followers—spreading a positive sentiment around your brand.
To capitalize on brand loyalty, you can create incentive programs to boost brand engagement and reward your top customers. These initiatives may cost your business money to implement, but it is more cost-effective to retain an existing and loyal customer than to acquire a new one.
6. Brand Preference
Brand preference refers to a customer’s decision to choose a particular product over a variety of identical items offered on the market for the same or a lower price. Customers will go out of their way to get their chosen brand, even if it means spending more money and exerting more effort.
Brand preference has a considerable impact on brand equity. Quality, service, customer loyalty, consumer choice, and effective marketing contribute to brand preference. Brand preference is the result of customer bias toward a brand, which may have stemmed from emotional responses to brand proposition and marketing approach.
7. Brand Compliance
Your brand represents who you are as a business, what you stand for, and the story and message you share with your customers. Customers place a high value on consistent brand presentation—and brand compliance guarantees that your message remains consistent regardless of the number of channels and partners involved.
Brand compliance adds value to brand equity by providing consumers everywhere with a reliable experience. By unfailingly exceeding your customers’ expectations, you form deeper relationships and strengthen brand equity.
Conclusion
Building brand equity is a time-consuming and challenging undertaking. But identifying and developing a niche product or service, establishing a recognizable name and logo, and cultivating a loyal customer base can reap financial rewards.
Creating brand equity is also more than just a way to generate short-term sales. It is also a means to build long-term value. Therefore, prioritize brand equity because it significantly impacts your brand’s capacity to develop and sustain a competitive advantage.
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