Building and measuring your brand equity and value over time is vital for success. Find out the difference between the two and how you can grow them here.
Brand managers are always going to great lengths to improve their company’s brand awareness. They know that this can help them reach more customers and take them even closer to becoming a household name. But what some managers forget is that they also need to have a good understanding of their brand equity and value too.
Awareness, equity, and value are closely linked along with other factors like brand loyalty and consideration. When you know your brand is performing well in one area, then this will be helping to support it in the others.
In this quick guide to brand equity and brand value, we’ll cover how you can measure and build them so that you can take your own brand to the next level.
Brand Equity Vs. Value—What’s the Difference?
Entrepreneurs and business owners regularly concern themselves with brand value. This relates to the whole financial worth of a brand, so there’s no wonder why all of the main players in a company take it very seriously.
Brand equity and brand value are closely entwined. When it comes to equity, it’s all about how well people think of a brand. If consumers regard it highly, then it will have positive equity. Conversely, a brand that consumers avoid and would not recommend is going to have negative equity.
The main difference between the two is that brand equity is customer-experience driven. How the brand is viewed by consumers will considerably affect it. As brand value is concerned more about the monetary value, it will be driven by financial factors.
Building Brand Value
There are a few ways to build brand value so that it becomes more financially stable and profitable. Here are a few that all brand marketing managers need to be aware of.
Stand out from the crowd. You need your target audience to see you before they notice any of your competitors. That’ll make it easier to grow your customer base no matter how stiff the competition in your niche may be.
Keep on learning. Build your knowledge so that you can become a thought leader in the industry, which should help bring trust in your brand.
Quality. You can’t compromise on product quality or else your customers might migrate to your competitors.
Innovation. If you are always bringing something new to the market, then consumers will always be interested in your brand.
Easy to use. Your products need to help consumers solve problems, not cause more for them.
Building Brand Equity
It’s also possible to build your brand’s equity; you just need to take the following steps.
Improve brand awareness. You want people to be aware of your brand so that they become very familiar with it.
Build brand identity. This is a great way to stand out in the market. If you are universal in your tone, voice, and use of imagery then it shouldn’t be too difficult for you to do.
Work on brand loyalty. This should come organically through word of mouth if customers respond well to your brand. There are other things you can do to give brand loyalty a little boost, such as offering incentives to returning customers.
Measuring Brand Value
Want to know how well your company’s brand value is doing? It can be measured in a number of ways including:
Awareness. If people know your brand and instantly recognize it, then it’s a sign that word-of-mouth marketing is working.
Perception. If customers view your brand as trustworthy and respectable then it reflects well on your overall brand value.
Intention to buy. If consumers want to regularly buy from your brand, then strong sales should help increase financial value.
Increased pricing leverage. This is one further sign that your company is becoming financially stronger.
Customer loyalty. More returning customers means keeping sales high shouldn’t be too difficult for you, leading to more profits.
Purchase frequency. Repeat purchases are another factor that can prop up your brand’s financial value.
At the end of the day, though, the biggest factor to look at is the company’s current market value. If this has gone up since the last time you checked, then it’s fair to say that the value appears to be growing.
Measuring Brand Equity
Similarly, it’s also possible to measure how your brand equity grows over time as well.
Shareholder view. We previously mentioned that brand equity is based on what your customers think about you. But it’s also important to take the shareholders’ view of you into consideration as well. If your shares are being sold off and shareholders are jumping ship, then it obviously doesn’t reflect well on your brand.
Finances. Even though finances are the main factor behind your brand value, they can also help you measure brand equity as well. If you are in a good financial situation then your customers must be pleased with the brand as sales are strong!
Consumer expectations. You can also gauge a lot by checking in with customer expectations. If they have set them really high, then it shows they think your brand is really something special.
Survey customers. You could always ask your customers directly what they think of your brand. If you do this on a regular basis with a tool like Latana, you will be able to map out patterns of your brand’s equity over time. In fact, if you use the survey tool on Latana, you will also gain some insightful data on your brand awareness as well.
Building and measuring both your brand’s value and equity over time is vital for success. Doing so can also highly other important factors too, including brand awareness and loyalty. Once you have a good overview of all these aspects of your brand, you’ll be able to better understand your brand’s health and what you need to do in order to make it even better.