The brand equity is a value that is governed by different abstract factors through which consumers are sovereign to make or not to make a brand strong or not.
In order to get users to champion a brand and thus have positive brand equity, it is necessary to invest efforts in branding and communicationIt is through branding and communication that companies will be able to work on the perception of their brand and differentiate themselves from their competitors.
But customer trust is not the only pro of this need. There are others, such as opportunities for expansion both in product line and geographically and into new markets; competitive advantages and bargaining power with suppliers, distributors and manufacturers.
What it is and how to build it
The brand equity is brand equity, i.e. the value perceived by the consumer. Although the term value is mentioned, we are not referring to something economic, but is based on perception (although inevitably both concepts are related to a common goal).
We could define it as the value that additionally generates a brand to the own offer of what it produces. It is, in a way, the value that is perceived through experiences, emotions and opinions that different consumers express and perceive of the company. Therefore, the values of a brand must be the good reputationthe commercial aspect and the influence in a constant quest to make a positive impact on the customer.
This concept is based on three fundamental lines, which must be impregnated by means of campaigns that speak of all the values that the brand itself and the target consumers bring. Trust, reliability, consumer retention and loyalty are the ABC of its strategy. The three phases are as follows:
1. Brand perception
It is what the brand means to consumers, that is, the perception they have of a brand through advertising and the experience that is created with it. This is done through:
- Recognition. It is the result of a well-defined work of the branding of a brand. Consumers recognize certain attributes of the brand to have a positive impact on them. Familiarity is an important factor in this method.
- Knowledge. Knowing the meaning of the brand in the market, its values and beliefs and its affinity with them. The goal is to be in the consumer’s mind.
2. Perception factors
How consumers perceive a brand with its products and services can greatly affect how they will act when faced with it. These factors are based on:
- Consumer preference
3. Resulting values
In this aspect are the tangibles, which are those that can be measured, and the intangibles, which are what is related to the subjective, to the will and other factors that we cannot control.
How to calculate the value of the brand
In calculating brand value we have to take into account three key metrics: financial (with market share, derived revenues, profitability, pricing, etc.); strength (ability to survive in the face of market changes); and consumer (consumer buying behavior and perception).
On this basis, numerous researches have been developed to calculate brand equity, which can be grouped into three mechanisms:
- Brand Asset Valuator. This system analyses the brand’s distinctiveness among competitors, its relevance, respect and consumer understanding of it.
- Equitrend. It consists of the evaluation of three concepts: familiarity, which is responsible for measuring the opinions that consumers make about a brand and the level of knowledge of it through surveys; perceived quality, which consists of evaluating what consumers think of the brand, and satisfaction.
- Interbrand. In this case, three factors are considered: financial analysis, which measures performance; the role of the brand as an influence on the consumer; and the strength of the brand in generating loyalty and increased demand.
Measuring through social media
Today it is possible for us to measure branding through digital platforms such as social media. To achieve this, there are four aspects that allow it:
- Awarenessi.e. the power of the brand (number of likesviews, comments, shares, etc.). It is also studied if the brand reaches the target audience and if this strategy generates leads.
- Desirability or how necessary the brand is. This measurement evaluates the presence with positive reputation in networks through comments, opinions and mentions.
- Proximity. Determines whether the brand is attractive to the target consumer it wants to reach. It is measured by the number of times it is shared with their contacts, frequency, general interest, etc.
- Relevance. The value of the brand is measured and compared with what it is having as a result on the digital level.
Branding vs. brand reputation
Branding and brand reputation are, unequivocally, related, but they are not the same thing. The branding is the promise that a company makes towards the consumer market, and the reputation is based on how faithful the company has been to that promise, whether or not it has kept it.
A branding recognizable and solid branding helps to a powerful positioning in the market. Reputation also makes that brand an interesting source of income. Therefore, improving it should be an objective in the development of the strategy of branding.
In short, the thread is very thin between one concept and the other, but the two are intimately related The strategy that brings the two together will be critical to the company.
A brand strategy is key to the present and future of the brand. With an eye on the consumer, the efforts we make should be aimed at a positive perception and a growing loyalty always.