How to Harness the Power of Brand Equity | Entrepreneur
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In today’s fast-paced world, consumers are bombarded with countless choices and endless information. The result? A growing emphasis on brand equity as the deciding factor in consumer decision-making. With 81% of consumers needing to trust a brand before purchasing, it’s clear that startups must prioritize brand equity to achieve success.
As an entrepreneur, understanding and harnessing the power of brand equity is essential for the long-term success of your startup.
This comprehensive guide will walk you through the ins and outs of brand equity, its importance, and the practical steps to build it. We’ll also share inspiring examples of companies that have successfully built their brand equity to stand out in the crowd.
Related: If You’re Not Thinking About Brand Equity, You Should Be. Here’s Why.
The importance of brand equity
In a nutshell, brand equity refers to the perceived value of your brand based on consumer experiences and perceptions. Brand equity is an intangible asset that you can think of as a beacon, shining brightly amidst the chaos of the marketplace.
The stronger your brand equity, the brighter your beacon shines. This attracts prospects who trust and value your products or services. A brand with strong equity enjoys a plethora of benefits, including:
- Higher profit margins due to premium pricing
- Improved market share through brand loyalty
- Expansion opportunities into new products and markets
- The ability to leverage brand equity as an intangible asset
- A competitive edge in the market
Remember, strong brand equity is a lasting resource that will stand with your business through thick and thin, giving you a resilient competitive advantage that beats all odds and keeps your sales moving.
Related: How to Build Brand Awareness and Loyalty
How to build brand equity
To unlock the power of brand equity in the digital world, you should consider these actionable strategies that leading brands have applied successfully to build their equity-
- Define your brand identity — Establish a strong brand identity by determining your core values, mission statement and unique selling points. Identify your brand’s personality, tone and voice to guide your branding decisions.
- Develop a robust visual identity — Create a cohesive visual identity that reflects your brand’s personality and values, including logo, color scheme, typography and design elements. Ensure consistency across all marketing materials, such as websites, social media profiles and product packaging.
- Increase and maintain consistent brand awareness — Ensure your brand is recognizable among competitors by implementing tactics like using a unique company logo and color scheme that reflects your brand image and sharing the authentic story behind your brand.
- Convey your brand’s values — Consider how your products and services address customer needs and tailor your messaging accordingly. Take cues from successful brand positioning and emphasize your brand’s commitment to social and environmental causes, as these are increasingly important to modern consumers.
- Embrace authenticity and transparency — Prioritize honesty and transparency in your business practices and communication. Share your brand story and journey with your audience to build trust and establish an emotional connection.
- Focus on building relationships and reinforcing customer loyalty — Cultivate strong relationships with your audience by providing exceptional customer service and high-quality products or services. Encourage engagement through social media contests or surveys to foster a sense of community around your brand. Offer loyalty rewards and recognition to encourage repeat purchases and referrals, ultimately strengthening your brand equity.
- Ensure a consistent brand experience — Maintain consistency in your brand experience across all touchpoints, from websites to social media to customer service interactions. Align your messaging, tone and visual identity across all channels for a cohesive and memorable brand experience.
- Foster and sustain positive customer experiences — The “halo effect” is a phenomenon where brand strength and loyalty lead to positive associations that contribute to brand equity. To capitalize on this, ensure customers feel secure and comfortable with your brand by building trust and credibility. For instance, Starbucks creates positive experiences by offering comfortable environments for socializing.
Measuring brand equity
How do you know if your brand equity-building efforts are paying off? This is a bit tricky because measuring brand equity involves assessing and quantifying the intangible aspects of your brand. However, there are a few methods that can help you gauge the effectiveness of your brand equity, providing valuable insights into the overall health and strength of your brand-
Measuring financial and product value — Assessing the financial and product value of your brand can be an excellent indicator of brand equity. Financial value can be measured through increased profit margins, premium pricing and overall revenue growth. Product value can be evaluated based on the success of new product launches and the performance of your products compared to competitors. Strong financial and product value often signals robust brand equity.
Conducting a brand audit — A brand audit is a comprehensive examination of your brand’s current market position, assessing its strengths and weaknesses compared to competitors. This process involves analyzing your brand’s identity, messaging, target audience and marketing strategies. By conducting a brand audit, you can identify areas for improvement, measure the effectiveness of your branding efforts and determine whether your brand resonates with your target audience.
Monitoring customer feedback and satisfaction — Customer feedback and satisfaction are critical indicators of brand equity. You can gain valuable insights into your brand’s reputation and perception by actively monitoring customer feedback, reviews and satisfaction levels. Happy, satisfied customers are more likely to be loyal and refer your brand to others, leading to higher brand equity.
Tools such as customer surveys, social media monitoring and review platforms can help you track and analyze customer feedback, providing you with actionable data to improve your brand equity.
A good example that illustrates the profound impact that positive brand equity can have on a company’s success, regardless of the business type and size, is Starbucks. Starbucks holds the title of the world’s most renowned coffeehouse, boasting a highly recognizable green and white logo that doesn’t even require the company name. With operations in nearly 80 countries and over 32,000 stores worldwide, Starbucks owes its success to a powerful visual identity, a compelling brand story and a commitment to putting customers at the heart of its business.
By understanding and implementing effective strategies to build brand equity and consistently measuring its impact, you can create a strong brand that drives business success and long-term growth. Also, remember to apply the brand equity measurement techniques strategically.
Yes, these methods do not provide a direct measure of brand equity, but they offer valuable insights into the overall health of your brand, which can help inform your branding strategies and efforts in the future. Start working on building and optimizing your brand equity now with the discussed strategies, and watch your startup flourish in a competitive market.