Brand equity: What is it and how to build it?

Brand equity: What is it and how to build it?

Have you ever wondered why some customers are loyal to a brand? Why do they buy anything that the company offers, no matter the price and quality of the product/service? The reason is brand equity, which is the value of the brand itself.
With the help of a leading web design agency in Melbourne, let’s break down everything you need to know about brand equity. Let’s talk about the role of brand equity in a business model and how to build it from the ground up.

What is brand equity?

Brand equity is the value that your brand brings to your company. It is an abstract figure calculated by social perception and branding strategy. Unlike any other financial asset, it is quite difficult to pin down an exact number. Nonetheless, brand equity still has an enormous impact on the bottom line of the business. There are an array of ways to measure it, including the price premium a brand can charge over a no-name product.

When your customers think positively about your brand based on their previous interactions, then this is called positive brand equity. However, if your customers have an unpleasant interaction with your company, whether it’s due to your poor customer support or website design, then they are less likely to buy from you. This is what negative brand equity is all about.

Why does brand equity matter?

If you take a look at the Apple brand, you will notice that you know a lot about the brand. Chances are, you can easily identify their logo, ads and products. This is the power of positive brand equity. It helps your business grow and create a deeper impact on other important metrics, including brand awareness, brand loyalty, brand preference and customer experience. Below are some additional reasons why brand equity is important:

• Brand equity results in an increased market share and value.
• It helps you deliver a positive customer experience.
• It often leads to easy extensions in your product/services.
• It helps you gain the trust of your customers.
• It improves your service or product offering.

How to build brand equity?

Brand equity is based on customer perception. When your brand is trusted to the state where customers feel a strong bond with it, your brand equity naturally increases. Here are the key steps you need to take when it comes to building your own brand equity.

2. Build and retain customer relations

By building and retaining customer relationships, you can build a stronger bond with your customers and increase repeat purchases. For that, you need to stay in regular contact with your customers. This means creating a weekly newsletter, attending Facebook Live Q&A sessions, posting Instagram Stories or even hosting an event to thank your loyal customers.

3. Run outside-the-box ads

To determine why people should choose your business, you need to think out-of-the-box. The best way is running highly targeted ads, especially if traditional advertising isn’t enough to produce good results. When your ads are memorable enough, they might leave a lasting impression on your customers and boost your brand awareness. It may even strike an emotional chord and boost customer satisfaction. For instance, the dating app Bumble knows how to use their social media content to engage their young users, who don’t like traditional advertising.

Knowing the role of brand equity is one thing and developing it is another. Even if you’ve got your marketing aspects right, creating a strong brand that resonates with your target audience is challenging. Since brand equity incorporates lots of emotional connotations, it is best to leverage the experience of a web design company.