The quality of your product is definitely a key factor determining your company's success.
But is this the only one?
No. You must also consider how your brand name is perceived by your target audience.
Tesla might build futuristic vehicles using revolutionary technologies…
Coca-Cola might deliver the most flavorful drinks on this planet…
Ikea might create high-quality furniture at affordable prices…
However, these brands are world-renowned due to the positive perception the consumers have about them. And this is what we call positive “Brand Equity”.
In this post, we will understand the intricacies of this popular marketing concept along with the role of Digital Asset Management solutions in maintaining it.
What is brand equity?
It is the intangible value your brand holds in the eyes of your customers. To put it in simpler words, it is the measure of how customers perceive your brand. Their perception is often shaped by their experience with your brand.
For instance, if the customers are treated well during their interactions, they develop favorable perceptions, which then improves your brand equity. Similarly, poor customer experiences will bring down your brand equity, which is then difficult to reverse. In fact, according to Genesys Report a staggering 77% of the customers reported not hesitating in switching brands if they had a negative experience with the company.
Well known brands like Apple and Starbucks have developed strong reputation and favorable brand equity over the years of their existence. While Apple built its high brand equity with its innovation and design excellence, Starbucks’ positive equity is due to its stellar customer service and social responsibility.
But the million-dollar question here is how do you become an Apple or Starbucks of the world? How do you create strong brand equity for your business?
For that, it is important to understand the various factors that shape brand equity. Such as,
Factor 1: Brand Recognition
This is the ability of consumers to identify and associate your brand with a product. Brands with strong equity generally have high brand recognition. They do this by picking a unique and easily identifiable brand name, designing a communicative logo, and adopting strong taglines that can be instantly associated with the product.
For instance, 9 out of 10 people can recognize an Apple laptop when they see one, because of its logo and distinctive design language.
Factor 2: Brand Loyalty
Loyalty is the measure of stickiness of consumers towards your brand even after completing a purchase. It reflects the ongoing relationship between your brand and your customers.
Even though building brand loyalty requires you to work in a multitude of areas like providing exceptional customer service, building high-quality products, and running targeted marketing initiatives for brand loyalty programs. But, there is another battle-tested way to build brand loyalty - using visuals to narrate your brand's story. When consumers connect with your brand's narrative, they are more likely to form emotional bonds and exhibit loyalty.
For example, Nike collaborates with athletes who have compelling personal stories to tell. By featuring these athletes in their marketing visuals, Nike connects with its audience on a human level. The stories of athletes overcoming challenges, setting records, or making a social impact become integral to the brand's narratives. Ultimately, it creates a strong band of loyal customers.
Factor 3: Brand Recall
Brand recall is the ability of consumers to remember and retrieve your brand in their minds when considering a purchase. Brands that evoke positive emotions with the help of visual elements are more likely to be remembered favorably when users are contemplating a purchase.
For instance, Barbie, the popular fashion doll from Mattel, is often associated with playful color schemes. This evokes a sense of excitement and happiness, as they resonate well with children, their primary audience.
Factor 4: Brand Association
These are the attributes or values that get linked to your brand, such as quality, trustworthiness, or innovation. Visual elements have the power to link a brand with such qualities.
For instance, the elements within a logo, such as symbols, shapes, and colors, can evoke specific associations. A sleek and modern logo could convey innovation, while classic and traditional elements might suggest reliability.
Here are some brand logos and the values they are typically associated with:
Is brand equity the same as brand awareness?
Many confuse brand equity with brand awareness. This is understandable. They do seem to be similar. However, they are two very distinct concepts. While awareness is all about being recognized, brand equity goes a little deeper into the value and trust a brand carries. A brand can be well-known (high awareness) but may lack the positive associations and loyalty that characterize high brand equity.
For instance, a brand like Ryan Airlines has high brand awareness but has negative brand equity due to its no-frills approach to customer service. Most customers often perceive this as poor quality service.
How does brand equity affect ROI for businesses?
Brand equity has a key role to play in shaping your bottom line because when you have strong brand equity, you enjoy the following perks:
Price your product higher than competitors
Favorable brand equity empowers businesses to set higher prices for their products as compared to their competitors. As customers perceive their offering of superior quality and are willing to pay higher prices.
Let's understand this with an example. Coffee in itself is a commodity. Yet, a cup of coffee at Starbucks will cost you way more than the coffee served at a not-so-well-known local shop. Even when the coffee beans used by local shops are the same as the ones used by Starbucks.
This is because Starbucks has higher brand equity, allowing them to charge a premium. It, in turn, results in higher profits for Starbucks, as shown in their annual financial results. Annual revenue of Starbucks in 2023 was $35.976 billion, a staggering 11.55% increase from 2022.
Improve sales volume without spending too much on advertising
Brands with high brand equity benefit from word-of-mouth marketing, reducing the necessity for high-cost advertising campaigns. Here, the brand name itself becomes a powerful marketing tool as satisfied customers share their positive experiences with others, influencing their purchasing behavior.
For example, Airbnb, a popular home-sharing platform, allows you to experience a destination like a local. You can enjoy an immersive and authentic cultural experience by staying in a residential neighborhood rather than a tourist-centric area. The unique accommodation experience sets it apart from the traditional concept of staying in hotels, creating a memorable experience for travelers.
Avid travelers often share their experiences with their friends and family about their stay at Airbnb, encouraging them to book a stay. This word-of-mouth marketing helps Airbnb to attract new customers without spending too much on advertising.
Better customer retention
As we discussed earlier in the article, customer loyalty is a key component to build brand equity. When customers have a strong connection to a brand, they are more likely to repurchase and remain a life-long customers.
The Apple iPhone is the best example of how brand equity can drive customer loyalty even in a fiercely competitive smartphone market. The iPhone’s aspirational brand image contributes to its positive brand equity, which drives strong emotional connection with potential customers. Owning an iPhone is often associated with being part of an exclusive club, and people who identify with this image are more likely to remain loyal to the brand.
How to measure the ROI of brand equity?
Here are three ways in which you can measure the returns on your brand equity investments:
Measuring brand awareness
Measuring brand awareness is essential to measure the ROI of your brand equity. A high awareness shows that your brand has successful market penetration and that most people know about your products.
The familiarity with the brand ensures that customers will prefer your product over the competitors, helping you build high brand equity. Measuring brand awareness also gives you an insight into your brand's position in the market. Based on the analysis, you can further refine your marketing strategy and strengthen your brand's positioning.
Here are some of the metrics that you need to track for measuring brand awareness:
- Brand impressions
- Website traffic
- Social media engagement
- SERP rankings
- Customer feedback and reviews
Measuring brand loyalty
When you measure brand loyalty, you get a tangible value of consumer commitment and repeat business. This reflects the extent to which customers consistently choose your brand over alternatives, showcasing the success of brand equity initiatives. A higher brand loyalty shows a deeper connection with your brand. This results in improved customer retention, reduced churn, and a more predictable revenue stream.
Here are some of the metrics that you need to track for measuring brand loyalty:
- Net promoter score (NPS)
- Brand engagement
- Repurchasing levels
- Multiple product purchases
- Customer loyalty index (CLI)
- Revenue per customer
- Focus groups, research panels, or customer brand perception surveys
- Sales data
- Social media reviews and mentions
- Website search volumes on your brand
Measuring marketing and advertising
By measuring your advertising and marketing performance, you identify the effectiveness of your promotional strategies in improving your overall brand equity. Effective advertising increases brand awareness and influences people's perception towards the brand, and their purchasing behavior.
Here are some of the metrics that you need to track for measuring marketing and advertising performance:
- Ad campaign performance
- Video impressions and views
- Media coverage
- Email marketing engagement
- Social media ads reach and performance
- Paid search ads reach and performance
- Organic search views and page rankings
Brand equity and brand consistency: How are they related?
Brands with strong brand equity have one more common thread linking them. They have also maintained brand consistency over the years. If you conduct a brand audit, you will find that their messaging, visuals, and user experience across every channel are consistent.
Both brand equity and brand consistency are more closely interrelated than you think. Brand consistency fosters trust - When consumers experience consistent branding across various touchpoints, they are more likely to trust the brand. And we all know ‘Trust’ is a crucial element of brand equity.
Creating brand guidelines and adhering to them can definitely help maintain consistency. But unless you have a robust solution for seamlessly storing and accessing different brand assets, you will not be able to effectively maintain brand compliance. And this is where a Digital Asset Management(DAM) solution comes into the picture.
How can DAM solutions help protect your brand equity?
Brand assets like logos, images, videos, color palettes have a key role to play in representing your brand the right way to your target audience. Consistency in their usage builds a strong visual identity that customers can easily recognize and trust. Ultimately, your brand equity improves. A DAM platform is the most useful to achieve this. It does this by:
Consolidating brand assets in a centralized repository
In the past, logos, graphics, and other multimedia elements were often scattered across various platforms. This led to inefficiencies and challenges in maintaining brand consistency. A DAM system ensures that all brand assets are available in a centralized repository, making it easier for teams to access the most up-to-date and approved assets.
For instance, ImageKit offers efficient categorization and helps organize your assets in a systematic manner. This is achieved through a seamless creation of folders, subfolders, and media collections. Each of them perfectly aligns with your product catalog, campaign hierarchy, and organizational structure.
How does this help maintain brand consistency?
A DAM system becomes a single source of truth where all approved and up-to-date assets reside. This eliminates the confusion caused by multiple versions or scattered files across various storage locations. It also minimizes the likelihood of using unauthorized or inconsistent material, further maintaining brand consistency.
Improving collaboration among teams
Effective collaboration between different teams is very important to maintain brand consistency. A DAM system offers a fully collaborative ecosystem with controlled access for all the team members. External parties can also be integrated into your collaborative workflows with controlled access. Everyone can work together on the same asset without any scope for error or confusion.
Take, for example, ImageKit lets you bring together your marketing, design, technology, and other team members under one unified platform, each with distinct access levels. This ability of the system proves invaluable in executing business-wide projects. Within the media library, all stakeholders can directly provide feedback on digital assets, eliminating the need for cumbersome back-and-forth email or Slack exchanges.
How does this help maintain brand consistency?
With features like - sharing, sorting, approvals, editing, bucketing, tagging, etc., the DAM system ensures better collaboration. It also reduces risks due to miscommunication among teams and the usage of wrong versions of assets.
Offering Easy Search Capabilities
A DAM platform leverages advanced technologies like AI and NLP to improve the efficiency of the search process. Users can enter layered search queries and apply various filters to refine results.
For instance, ImageKit offers a robust search functionality that filters assets based on diverse criteria. These criteria include Tags, Size, Dimensions, Format, Privacy, Transparency, Upload Date, and Modified Date. The platform maps more than 10 parameters and allows users to combine multiple criteria. This feature adds an extra layer of specificity to searches, allowing users to create highly tailored search queries and easily locate the asset they need.
How does this help maintain brand consistency?
Robust search capabilities help access the right asset at the right time. Advanced DAM systems like Imagekit allow you to include versions in your search results, eliminating the risk of using unauthorized assets.
Now that you know how brand equity can help you improve your market share and the role creative assets play in building a positive brand image. It's time to streamline your media asset management workflow with the right DAM partner at your side.
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