What do Apple, Coca Cola and Nike have in common?
Strong and unmistakable brand equity.
These and other top brands have left such a pervasive perception on the minds of consumers that people attribute very specific values such as innovativeness, premium quality and accessibility to these brands.
Brand equity can be defined simply as the emotional and conceptual associations consumers have with products and services from a particular brand name.
Indeed, brand equity goes beyond financial performance to include those unique features that give a company competitive advantage and the ability to survive any bumps in the road.
In their most recent ranking of the 100 top brands based on consumer perception, FutureBrand explained, “Financial value and past performance are no guarantees of future brand…that organisations with the strongest perceptions by our measures have a quantifiable competitive advantage and are more ‘future proof’ than their peers.”
Brand equity is therefore largely steeped in consumer perception and the value they attribute to certain products and services.
STAGES LEADING UP TO BRAND EQUITY
To have a certain perception about a brand, consumers typically go through 5 stages:
Awareness- Consumers become aware of and know the brand
Recognition- Consumers recognise the brand amongst a sea of other brands
Trial- Consumers purchase and use the brand’s product
Preference- Consumers develop emotional connections to the brand after having a good experience with it
Loyalty- Consumers become repeat customers and perceive the brand to be the best and perhaps the only brand they can use to solve a specific problem.
Like other types of customer insights, measuring customers’ perception and connection to a brand often requires gathering and analysing a lot of data.
Each business has different factors they would want to measure to make conclusions about their brand equity. Overall, you would want to look at three overarching areas: consumers’ emotional attachment, their perception of your brand in comparison to competitor brands and lastly, your own financial figures.
HOW THEY FEEL
Data on the level of emotional connection and consumers’ knowledge about your brand can help you make assumptions about the value of your brand.
Businesses with strong brand equity elicit strong emotional connections among their users. It’s what keeps consumers queuing through the night outside stores to get the latest Apple product or new Yeezy footwear.
In a study conducted across hundreds of industries, researchers at consumer intelligence firm Motista found that the most effective way to foster customer value is to “move beyond mere customer satisfaction and connect with customers at an emotional level – tapping into their fundamental motivations and fulfilling their deep, often unspoken emotional needs.”
The researchers found that key emotional motivators fostered an emotional attachment to a brand. Some of these motivators include a product or service that makes customers stand out from the crowd, enjoy a sense of wellbeing, feel a sense of belonging, feel secure, be the person they want to be, succeed in life etc.
When you understand what customers feel about your brand, you are able to improve this by curating experiences that meet your customers’ emotional needs.
[easy-tweet tweet=”Emotional connection to a brand often goes hand in hand with functional connection”] When consumers have a functional connection with your brand, it means they associate your product or service with a specific function. For example, when people see an image that has clearly been altered, they say it has been ‘photoshopped’ even though software other than Adobe’s Photoshop may have been used to alter the image.
While consumers only subconsciously associate certain products with certain functions, being able to collect data on functional connection has several benefits.
First, it can give you a clear picture of whether your customers know how your product works or its purpose. Also it can give you insights into customers’ perceived value of using your product.
The insights you get could help you with other marketing strategies such as content development, advertising and branding to foster greater brand awareness and recognition, which are key components of brand equity.
HOW YOU COMPARE
One of the best or perhaps the easiest ways to gauge the value of your brand is to assess how consumers perceive your brand relative to your competitors.
When assessing how you measure up to competitors in your industry from your customers’ point of view, you could look at several metrics:
Cost: Cost is a major consideration for many consumers especially when choosing between similar products. However, it is not just about looking for the cheapest product; consumers align themselves with the brand that offers the best value in terms of quality and cost.
Preference: Gathering data on brand preference allows you to measure the extent to which consumers prefer your brand and their role as an advocate for your brand. Survey questions such “How likely are you to continue using brand A?”, “Would you recommend brand A to peers or family?” can aid in gaining insights into consumers’ perception of your brand within your specific industry.
Impact: Measuring brand impact takes a more quantitative approach and may entail assessing factors such as the price premium of your products or the average amount of your products which your customer purchases. Generally, the greater the impact a brand has, the more consumers are willing to spend on this specific brand.
Given that measurements of brand impact primarily focus on the cash expenditure on branded products, it also ties well to bottom-line metrics of brand equity.
Indeed, your financial records and performance trends can give you objective quantitative insight into the value of your brand.
The true value of your brand has implications for many aspects of your business including positioning, customer experience, engagement, branding and more. The keen understanding of this value lets you make informed decisions about all these aspects, which will undoubtedly reflect on your bottom-line.