What Is Brand Equity?
Branding is more than a name, term, design, or symbol; it is all about creating differences, being unique, and creating an emotional connection with consumers. Your company’s brand is its identity, but it is also the emotional connection that consumers associate with your company. It’s the way they feel, the experience they expect to have, and the unique qualities that differentiate your company from other company’s in your industry.
As marketers, we can work long hours strategizing a plan for how we want our brand to be perceived, but when it comes down to it, our brand is only as strong as our customer’s opinions of it. When a brand has its own personality, ignites feelings within, and establishes a relationship with its consumers, it is considered to be a powerful brand. This is because its customer’s perception and experience define a brand. As a result, a customer is more likely to believe their own experience with a brand before they trust an advertisement. This is called brand equity.
Brand equity is defined as “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.” It is the social value or perceived worth of a brand. Brand equity is a concept or a framework for understanding the value of your brand from the consumer’s perspective and its relationship to how you differentiate yourself from your competitors.
Brand awareness plays a huge role in brand equity. Consumers are more likely to purchase or spend more on an item that they recognize as a strong, favorable brand than a brand they are unfamiliar with. Take Apple, for example. Apple products have many similarities when it comes to their features, and many companies make and sell products that are the same as or closely resemble Apple products for half the price. However, despite the cheaper pricing, consumers still would rather purchase a more expensive Apple product than a more affordable off-brand product. This is a result of brand equity, consumers trust Apple, they know what to expect from their products, and they enjoy the experience. Because of Apple’s loyal customers and strong following, they are able to price their products at a premium level specifically because they know their customers are loyal and will buy their products regardless of the price.
Strong brands accelerate business growth. If you are looking to improve your brand equity, you need to strategize a plan to create favorable responses from your consumers and generate a positive brand image. The stronger your brand equity is, the less the demand for your brand will vary with changes in price. Contact me for a consultation so I can help you achieve your branding goals.