Brand Equity – What is it and How Do I Build it?

Summary

This video explains the importance of building positive brand equity for businesses. Brand equity, the value a brand brings through customer perceptions and experiences, can significantly impact a company's success. Positive brand equity enables higher pricing, competitive advantage, and increased brand loyalty, which drives repeat purchases. Key strategies to build brand equity include raising brand awareness, creating strong brand associations, and fostering customer loyalty through quality content, excellent service, and engaging loyalty programs. Successful brands, like Apple and Harley-Davidson, develop emotional connections and communities around their brands, leading to long-term consumer trust and commitment.

Takeaways

• 📊 Brand equity refers to the measurable value a brand adds to a business based on consumer perception and experiences, and it can be positive or negative.
• 👍 Positive brand equity allows a business to set higher prices, gain competitive advantages, and attract investment, making it essential for any brand-building strategy.
• 📢 Building brand awareness is the first step in increasing brand equity. It ensures that customers are familiar with a brand's qualities, making them more likely to choose it subconsciously during purchase decisions.
• 🔍 Strategies for building brand awareness include SEO, hosting or sponsoring events, providing free content, and leveraging social media presence.
• 🤝 Brand associations are formed by consumer interactions, advertisements, product quality, and brand personality. These associations influence how customers perceive and connect with a brand.
• 🔗 Building a brand community, like Harley-Davidson's HOG group, enhances brand associations and fosters a sense of belonging, making the brand a part of customers' identities.
• 💖 Brand loyalty occurs when customers become repeat buyers and advocates for the brand, making it crucial to provide consistent value, excellent service, and authentic engagement.
• 🧮 It is more cost-effective to retain existing customers than to acquire new ones. According to the Pareto principle, 80% of future revenue often comes from 20% of current customers.
• 🏆 Loyalty programs, such as point-based systems (e.g., Shell's Driver's Club) and tiered rewards (e.g., Sephora's beauty insider program), incentivize customers to stay engaged and increase their spending.
• 📣 Hosting contests and engaging activities, even with no purchase necessary, can boost brand loyalty and awareness, increase social media engagement, and draw new prospects into the marketing funnel.

Q & A

What is brand equity?

Brand equity is the measurable value that a brand brings to a business based on customer perceptions and experiences. It can be positive or negative, depending on how consumers view the brand.

What are the benefits of having positive brand equity?

Positive brand equity allows a company to set higher price points, gain competitive advantages, increase the success of product launches, attract attention from bloggers and press, and convince investors that the business is worth investing in.

How does brand awareness contribute to brand equity?

Brand awareness is the first step in building brand equity. It's the extent to which consumers are familiar with the brand and its qualities. High brand awareness is necessary to drive more sales and increase revenue.

What role does SEO play in increasing brand awareness?

Search engine optimization (SEO) helps increase brand awareness by improving a brand's visibility in search engine results. Appearing at the top of search results can help consumers become familiar with the brand and its offerings.

Why are brand associations important, and how are they formed?

Brand associations are important because they influence how consumers perceive the brand. They are formed through interactions with the brand, such as advertisements, promotions, customer experiences, pricing, and product quality.

How can a company build brand loyalty?

A company can build brand loyalty by consistently offering value through high-quality products or services, providing excellent customer experiences, listening to customer feedback, and maintaining a consistent brand presence across all platforms.

What is the Pareto principle, and how does it relate to brand loyalty?

The Pareto principle states that 80% of a company's future revenue comes from 20% of its current customer base. This emphasizes the importance of developing brand loyalty, as loyal customers are more valuable and cheaper to retain than acquiring new ones.

What are some effective strategies for creating customer loyalty programs?

Effective strategies include point-based systems, tiered rewards programs, charging small fees for VIP services, holding contests, and providing incentives for repeat purchases. These programs encourage customers to return and make more purchases.

Why is consistency important for brand loyalty?

Consistency is important because it helps build trust. Consumers expect brands to deliver on their promises every time, and changing logos, tone, or offerings frequently can confuse customers and reduce brand loyalty.

How can social media contests increase brand awareness and loyalty?

Social media contests can boost brand awareness by encouraging users to follow the brand, engage with content, and share the contest with others. This increases the brand's visibility, engagement, and can foster loyalty by creating positive associations.