Have you heard about brand equity? It is the value which your customer associates with your brand. A positive brand equity is important because it can influence your bottom line substantially.
What does brand equity influence?
A) Premium pricing
When you have a positive brand equity you will be able to ask for premium prices. People will be willing to pay more for your product because they know that they will get what they require from your product.
By having a positive brand equity, people will choose your product or service over your competitor’s even if the competition is undercutting you on price.
B) Marketing cost reduction
When people associate positive emotions towards your brand, and they have had a great customer experience, they will share the word about your brand with their friends and family. People will want to be associated with you and will help you to promote your brand.
C) Increased negotiation power
When it comes to manufacturers, vendors and distributors, you will have more power if your brand is positive. These partners will want to work with you because they will know that you will be able to make the sales and they will get their money. They will also be more willing to negotiate with you to get your business.
D) Expansion opportunities
You will be able to expand your operations into other geographical regions or you will be able to add other products or services to your business. Because your consumers are aware of how great your brand is they will be willing to try out the new offering or be happy if you have moved into their geographical region.
Now that we are aware of the advantages of a positive brand equity, how do you go about creating it.
How ti Improve your brand equity
There are four areas to look at when you want to improve your brand equity.
1. Brand awareness
Making your consumer aware of your product is the first step in creating brand equity. This is influenced by your logo, font, colours, and advertising. When people can associate your brand with a certain product or category, like we associate an apple with quality computers and the Coca Cola label with great tasting cola. Then we can move on to association.
2. Brand association
Brand association is influenced by the experience your customer has through the whole sales experience. Where your staff helpful? Did the product do what you promised in your advertising? Did you fix the problems they may have experienced quickly? All these aspects affect the emotions which your consumer associate with your brand. When these are all positive then you are well on your way to creating a great business.
3. Perceived quality
You may have the best product with the highest quality but if your consumers don’t think so then you are going nowhere. When people perceive that your product is better than your competition’s then you will be able to offer a premium for your product. You will also be able to add to your product line and people will be willing to try it out because they believe you produce excellent quality products.
4. Brand loyalty
The final aspect of brand equity is brand loyalty. Will people always choose your product even when faced with other brands of the same product? When people return to your product every time then you have loyalty. They will choose your product even if the competition is cheaper. They will also be more forgiving if you make an error. They will also do free advertising for you by telling their friends and family about what a great product or service you give. This is what you aim for.
By working on these areas to improve your brand equity, you will be well on your way to creating a great offering that everyone will be wanting.
Proudly brought to you by NSBC.