For any organisation, brand equity is an important factor to consider because it influences the public’s perception of their business.
With that in mind, it is worth exploring the concept of brand equity and the steps you need to take in order to build it.
What is meant by ‘brand equity’?
In a world where people are often searching ‘brand equity meaning’ and asking search engines ‘What is brand equity?’, it is crucial to know what brand equity consists of before trying to build it.
Brand equity can be described as the way that customers perceive the value of a brand, usually shaped by their own experience of it. There are several elements that comprise brand equity, including awareness, reputation, differentiation, energy, relevance, loyalty and flexibility.
Why is brand equity important?
Branding equity is important as it makes all the difference when leaving a lasting impression, whether that’s positive or negative, on a customer. In simple terms, it plays a role in differentiating one brand from another, which either makes it desirable or undesirable to consumers.
A strong brand equity that is memorable and reliable can generate increased customer loyalty because consumers will put their full trust into the organisation. This can lead to a significant boost in revenue for businesses as consumers are more likely to make multiple purchases, which can also solidify their position in the market-place.
Alternatively, if a solid brand equity has not yet been established, a company is more likely to have a lower perceived value.
How to develop brand equity
To develop a good brand equity, businesses need to cultivate a strong and consistent brand personality.
Another part of developing brand equity is spreading it, which means growing your brand awareness in order to reach a wider demographic.
You will also need to be dedicated to continuously improving your brand equity, whether that is through collating and analysing feedback from customers or connecting with customers to gauge what they think of your brand.
Benefits of developing brand equity
Many people largely underestimate the power of brand equity in attracting and retaining attention to an organisation. However, it can be tremendously beneficial because it makes a brand memorable, easily recognisable, and highly reliable.
Not only does solid brand equity increase the profits of the brand by driving sales, but it also increases the value of the brand in the market and solidifies customer loyalty. It also cements a company’s position in its chosen sector for the long term by helping it resonate with target audiences. Furthermore, brand equity helps increase credibility for a business, making it more trustworthy and reliable in the eyes of customers.
How to measure brand equity
Brand equity is a test of the value and strength of a brand, and there are numerous ways to measure it.
To know how to measure brand equity, you need to use a variety of quantitative and qualitative methods. Quantitative measurement includes financial metrics like revenue and profit, while qualitative methods involve assessing factors like consumer satisfaction and brand perception.
It is important to keep in mind that measuring brand equity is a detailed process that requires mindful consideration of a range of factors. Your specific method of measuring brand equity may fluctuate according to the industry, target demographic, and business goals.
First, it is important to conduct brand evaluation, which entails gathering details on the total value of the brand as a separate monetary asset. This goes hand in hand with analysing metrics that measure the financial impact of a brand, including revenue, profit and loss.
You will also need to assess brand awareness, which gives us an indication of how well a consumer is noticing a brand in the market. Testing and monitoring the relevance of your brand is also crucial to determine to what extent it is resonating with consumers.
Want to build a strong brand equity?
It can be difficult to know where to start when building a strong brand equity, which is collaborating with the professional team at Rapid Agency is a smart first move.
Covering brand identity, strategy and rebranding, our impressive catalogue of branding services can be tailored to your unique vision.
Why not reach out to our expert team of creatives and strategists today to start building a solid brand equity that represents your business effectively?