Are you ignoring the critical value of your brand equity?
Brand equity is regarded as a good thing. Although there is often some fuzziness around what it actually is.
A quick Google search returned this definition: “...the commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself.”
That value that comes from perception can equate to customers and prospects preferring your offering. Making a purchase. And, in the best of circumstances, even advocating for your brand.
So brand equity is important. Unfortunately, the value of your brand equity is often difficult to quantify.
Which leads to situations like the one I encountered recently. A marketing leader – faced with belt-tightening at his organization – decided that they needed to cut ‘brand-related’ efforts until things got better. I always find this short-sighted. And try to point organizations to findings to consider before simply cutting all brand-related activity. For example, Insider Intelligence’s eMarketer reported that brand equity is the top purchase driver for consumers. The survey looked at the factors that influence decisions to choose a brand or item. The top answer was “A brand I already know and trust.” In other words, brand equity. It blew away all the other options like ads, salesperson recommendations, and even recommendations from friends/family.
Additional reasons to pay attention to brand equity
Brand equity plays a big role in people choosing your brand. We’ve established that. But what else does it do?
It builds trust and loyalty - it helps people believe in the quality, reliability, and consistency of the brand's products or services, making them more likely to make repeat purchases.
It can increase perceived value - people may be willing to pay a premium for products or services from a brand they perceive as having high quality, innovation, or a positive reputation.
It can boost word of mouth - strong brand equity often leads to people sharing their positive experiences, spreading word-of-mouth recommendations.
It can reduce price sensitivity - when brand equity is high, consumers may be less sensitive to price, making them less swayed by discounts or promotions from competitors.
It can elevate the emotional connection - offerings with high brand equity often have a strong emotional connection with consumers. This emotional bond can be a powerful factor in driving purchasing decisions.
It can make the brand more resilient - strong brand equity makes a brand more resilient to negative events or crises. Consumers are more forgiving and understanding, and the brand is better positioned to recover from setbacks.
It can help create differentiation - in markets where products or services are similar, people are more likely to choose a brand with strong equity over others because of the intangible qualities associated with it.
It can be easy to forget the power that brand equity has in gaining, retaining, and nurturing customers. Don’t let it become an afterthought. It is a hard-won asset. One that can have a big impact on those you hope to serve choosing your brand.