Why is Brand Equity Important in Marketing?
Brand perception is more important than ever before. Today’s consumers have high expectations in regards to how a brand treats its employees, customers, and the environment. To stay ahead of the shift from focusing on product to customer, brands need to take a holistic look at their marketing initiatives, especially those that impact brand awareness.
Here’s how companies can use various marketing strategies to build and improve brand equity.
What is brand equity?
In marketing, brand equity is the worth of a brand in the eyes of consumers. In simplest terms, brand equity is a brand’s reputation.
When consumers think highly of a company, it has positive brand equity. This could be because the brand creates unique products and exceeds customer expectations.
On the other hand, brands can also have negative brand equity. Negative brand equity can be caused by low quality products, poor customer service, or failure to meet customer expectations.
Why brand equity matters
There’s value and profitability in having positive brand equity. Companies with positive equity are more likely to have an ever-growing list of leads and loyal customers. Positive brand equity is also beneficial in that it positively affects your bottom line by:
- Enabling a company to charge premium prices
- Increased product success
- Reducing ad and other marketing costs
- Increases market share
The bottom line is that consumers are often willing to pay more for a product if it’s sold by a brand that is well known and has a solid reputation. If your brand is trusted, consumers will make you their go-to brand.
Another reason why brand equity is so important is because it increases customer loyalty and customer lifetime value. Customers are more likely to try new products from a brand they are loyal to. They’re also more likely to buy more from you.
How to improve brand equity
The payoffs for establishing brand equity are ever-increasing. Building brand equity requires a lot of time and effort. It starts with thoroughly researching your target audience. Specifically, you need to understand their values and needs. At the same time, you also have to highlight what sets your business apart from competitors.
As you establish brand equity, companies must continue to spread brand awareness, reach new leads, and foster loyalty among existing customers. Some other tips for building brand equity include:
- Knowing your why
- Driving awareness
- Prioritizing customer experience
- Sharing your message using the right media
- Staying consistent
- Using criticism as a learning opportunity
- Listening to your customers
Taking the steps to build brand equity will serve your business well now and long into the future.
Final thoughts
Brand equity is one of the most valuable assets that a company has. Building and improving brand equity has a direct impact on your success. Positive brand equity allows you to gain industry recognition while also giving you a competitive advantage.
Don’t let your brand’s reputation fall to the wayside. If you’ve taken little time to nurture and build brand equity, it’s better to start sooner rather than later.
With positive brand equity, there’s no limit to your success!
