The Beginners Guide to Brand Equity

Building a company has never been easy. Even though the digital age has provided the market with countless tools, this is just as true as ever. You have more competition than in eras past, thanks in large part to the World Wide Web and globalization. Some things don’t necessarily change though. One of those is the importance of brand equity. If you want your company to succeed, you absolutely must understand this critical step of the process; it’s one you’ll need to invest in over and over again.

What Is Brand Equity?

Let’s start with the basics. It’s worth pointing out that the definition of brand equity varies depending on who you ask. However, most would agree that it has a lot to do with the actual value of a company’s brand. Instead of being based on dollars and cents, it has more to do with the public’s impression of the company. In this way, brand equity is both tangible and intangible. It encompasses the company’s products and services, but also the opinions of its market.

For a closer look at brand equity, let’s break it down into three very important features and define each of them.

The Tangible and Intangible

As we just mentioned, brand equity is tangible and intangible. The former would refer to the company’s price premiums and revenues, while the latter would be public awareness, opinion, good will, and influence.

The Positive and Negative Effects

When brand equity is positive—when public opinion is favorable and revenues are up—the company is going to benefit as a whole. Likewise, when brand equity is negative, the company is going to suffer. The health of the company and its brand equity are tied to one another.

Consumer Catalysts

It’s also essential that you understand that companies don’t actually build brands. Instead, that job goes to consumers. All companies can do is try to influence where their customers put the next brick.

Building Positive Brand Equity

Now that you understand the above, it’s probably fairly easy to understand that companies really, really want positive brand equity. Doing this involves a five-stage process that a brand has to go through. These steps are:

• Awareness: consumers become aware of a brand.
• Recognition: when consumers see a brand, they recognize it and know what differentiates it from other options.
• Trial: consumers try the brand.
• Preference: consumers prefer the brand and now become repeat buyers. Eventually, they even develop a certain amount of emotional connection to the brand.
• Loyalty: the ultimate stage is brand loyalty. This means that customers don’t just prefer a brand, but will actually go out of their way to buy it. They may pay more for it over a similar product or drive long distances to get their hand on the brand they demand.

Maintaining Brand Loyalty

Obtaining brand loyalty with customers is vital for the longevity of a company, but it definitely doesn’t stop there. The real challenge to brand equity is maintaining that loyalty.

Remember that brand equity is both the tangible and intangible, meaning that if you want to keep customers loyal, you need to keep an eye on things like:

• Public Perception: this includes what the public is saying about you and what your marketing team is saying to the public.
• Value: no matter how loyal customers are, they’ll begin looking elsewhere if your value drops below a certain point.
• Price: likewise, you can only charge so much for your product before customers decide they can’t afford to be loyal.

Now that you understand brand equity, it’s time to begin applying this concept to your company and start seeing better results from your market. Speaking of-- click below to get your free Beginners Guide to Inbound Marketing to complement what you have learned above!Sources:https://aytm.com/blog/research-junction/brand-equity-basics-1/, www.wikihow.com/Build-Brand-Equity