Why is brand equity so important?
Brand equity is the value of your brand. It’s what you can leverage to gain a competitive advantage, increase customer loyalty, and grow your sales.
Your brand and how it is viewed in the world, plays a huge part of determining the types of customers you attract, the amount you are able to charge for what you do, and ultimately how loyal your customers are to you.
So what is brand equity?
Brand equity is the difference between what consumers are willing to pay for a product or service and the cost to provide or manufacture it. It comes down to the margin you receive and how high or low it is in comparison to your competitors. The higher the margin you can charge and still achieve enough sales to cover your operating expense, the more value you have in your brand. Brand equity can be a powerful tool for increasing profits, but it’s important to understand where that value comes from.
Brand equity is based on how much value consumers place on your brand compared with other similar products or services in your market segment. If you’re selling coffeemakers at $50 apiece, but there are dozens of other brands selling for less than half that price–and some people still choose yours–then you have high brand equity: Your customers see something special about what you offer that makes them willing to pay more than they would otherwise (i.e., “I don’t care if this costs me $25 extra per month; I love my Keurig machine”).
So how do you build brand equity?
Brand equity is the value that a brand creates for its customers and shareholders. It’s not something you can just create; rather, it must be earned over time through consistent branding efforts that serve the needs of your customers. Here are three things you should consider:
Build Your Brand Story – A brand’s story helps you build its equity by connecting with customers on an emotional level. Your brand story can be anything from a simple slogan to an elaborate origin myth; it doesn’t have to be factually true or even consistent (just ask any superhero). In fact, consistency is good when establishing a strong identity but not so much once you’ve established yourself as an authority in your field–and this is where authenticity comes into play. If you want people to remember your product or service over others’, then tell them why they should choose yours instead: because it makes them happy; because it solves their problems; because they know that whatever happens next will be OK because they own one or they work with you.
Build Your Customer Loyalty – Build customer loyalty by consistently delivering on promises made in your marketing campaigns (and beyond). This means providing excellent products or services, as well as offering outstanding customer service whenever possible. Deal with tough situations promptly and remember that not only is the person in front of you watching, but so is all their friends. This doesn’t mean that you need to give in on everything, but make sure you deal with your customers the same way you expect to be dealt with. Make sure your employees understand how important good customer service is and don’t be afraid to reward them when they go above and beyond.
Protect Your Brand from Poor Marketing – Protect your brand from poor marketing decisions by hiring experts who understand how best to market your business online–and offline! You’ll also want these experts’ help when deciding which social media platforms are best suited for reaching out directly with offers of special deals on products/services directly related only. An outside perspective on your business is valuable and a marketing professional will ask you the questions, you have never thought of asking, because you are “inside” your business and from there it is tough to see what others see from “outside” your business. A different perspective can make a huge difference.
To sum up, brand equity is a crucial part of business success. But you can’t just create it. You must build it and market it too! The good news is that if you have the right tools and strategies in place, then building your brand will be easier than ever before.