Brand development and building strong brand equity is as much science as much as it is an art.
Gaining consumer trust for a brand takes time, but the work needs to start from day one, to integrate a few core principles in the brand development exercise.
What is brand equity?
Brand equity is the power or value of the brand.
It includes how the brand’s audience recognizes and remembers it, how they think and feel about the brand, and how loyal they are to the brand, sometimes even to the extent of being ready to pay a premium for it.
Difference between brand equity and brand awarenessBrand awareness is the extent to which the brand's audience knows that it exists, whereas brand equity is how much they love it, how strongly they feel about it. #brandequity #smallbusinessbranding Click To Tweet
This is how it works:
Step 1: A brand is launched
Step 2: The target audience starts to become aware of it
Step 3: They check out the brand, know more, and have some experience with it. Maybe they make some purchases
Step 4: The audience decides whether they will do repeat purchases and/ or follow the brand. If they build an affinity with the brand and decide to be loyal to it, then the brand has been able to build strong equity in the minds of its audience.
So brand awareness has to exist first, for equity to be built later.
Benefits of strong brand equity
When a brand has strong equity, it is already a level above its competition. These are some of the advantages it enjoys:
1. Customer loyalty
Customers are more likely to buy or invest in brands they feel more strongly about, trust, and like.
2. Premium pricing
When brands have strong equity, they can ask for higher prices from their loyal customers, knowing that their audience won’t easily switch to the competition.
3. Continuous growth
Not only are consumers willing to purchase from brands they value, but they are also likely to buy new products launched by the brand. Or even by from the brand when they’re traveling.
All these mean more income for the brand, and more growth.
4. Negotiating power
Brands with strong equity and thus more income potential may have the upper hand when it comes to making and negotiating deals with their existing partners or prospects.
5. Recruitment power
Brands that have strong equity and thus a good following, are more trusted by people in general, and can thus attract high-quality talent.
Brand elements to build brand equity
Essentially, there are 7 key brand elements that are required to build brand equity, and a strong identity to create traction, generate leads, and maintain sustainable growth.
1. Customer Focus
7. Fulfilment of the promise
1. Customer focus
“You can please some of the people all of the time, all of the people some of the some, but you cannot please all of the people all of the time” – John Lydgate.
A brand has to clearly identify who its target audience is, and focus on communicating with them. It has to match its core offer with the needs of this specific audience, communicate a clear message in their language, and provide a kind of experience that resonates with them.
For example, Axe became a multi-million dollar brand by clearly targeting ‘nerdy, insecure’ teenage guys and building the brand message accordingly (that all guys can look good and attract the opposite sex).
The core offer, positioning, and story of a brand have to be simple, clear, and easily understood. Recent studies indicate that the consumer attention span is decreasing, and that of an average internet consumer is 8 seconds (it’s 9 seconds for a goldfish!).
In a fast-moving world and marketplaces crowded with brands, it could be a big risk to hope that consumers will spend time to decipher the true offer of a brand, so a brand message has to be easy to decipher.
Almost every industry has various numbers of brands that offer relatively similar products. Needless to say, it is thus key to have a Unique Selling Proposition that makes a brand one more attractive for its particular target audience, even if the niche is extremely small.
The uniqueness is not always about the features of your product or service. It could also be in the delivery, the distribution, the environment, the price.
Domino’s USP of pizza ‘delivery in 30 minutes or less’ made it an immediate success in the USA, with the company valued today at >$1 Billion.
A study by the agency Cohn & Wolfe across 12 global markets on important brand attributes indicated authenticity to be a top priority, especially for millennials.
60% of consumers would purchase and recommend a brand they perceive to be authentic. So it is important for a brand to be honest, transparent, meaningful, true to its stated values, and overall, prioritize people.
In their paper on Brand Credibility based on various research, professors Tulin Erdem and Joffre Swait write that ‘Credibility is broadly defined as the believability of an entity’s intentions at a particular time and is posited to have two main components: trustworthiness and expertise.’
These elements affect both brand choice and consideration. So a brand needs to have a Reason-To-Believe on why it can claim particular expertise (i.e., why it has the ability to deliver what it states it can) , and it needs to continuously deliver on its promise in order to build up trust over time.
A brand interacts with its target audiences at multiple touchpoints, whether it be in retail, online, or customer service. And it’s important that the brand maintains the same tone and messaging pillar at each point, to create a consistent image subconsciously in the minds of the audience.
If it changes any of its aspects, like message, brand imagery, or service quality, from point to point, it will paint different pictures, the audience will get confused, and the interaction with the brand will decline.
A post in The Marketing Week indicates that Nike’s consistency of ‘Just Do It’ across channels helped it gain 25% market share and $8.3B in 10 years. And this consistency has to be maintained even at the smallest touch point with the consumer.
William Arruda has some good tips on how to include small details within brands.
7. Fulfillment of the promise
A brand is a promise, perceived as an experience by the customer.
A Gallup study indicated that consumers feel brands deliver their promises only 50% of the time. But the top companies deliver 75% of the time.
So to gain and retain strong brand equity, just keep your brand word.