When you run a company, there are countless moving pieces to supervise. Your marketing efforts and brand presence, while only serving as small pieces of your overall business, are the two areas which can have the greatest impact on your sales, growth, and success. Unfortunately, many business owners are currently operating on an outdated understanding of brand equity. Read on to learn how to manage this critical component of your digital strategy.
What is Brand Equity?
The American Marketing Association defines brand equity as the value of a brand beyond what can be explained by a product’s functional features. When handled expertly, this can boost sales and lead to greater consumer preference over your competitors – ultimately, this generates lasting loyalty and increasing profits.
Benefits of creating a strong brand include:
- Financial advantages
- Brand recognition
- Customer loyalty
- Improved margins
- Lower sensitivity to price changes
- Ability to set higher prices for goods and services
- Lower vulnerability to competition
How do you boost this relationship with customers? Regardless of your industry or the size of your organization, there are many approaches available. It can be built within a specific niche, or by making a name for yourself as a local alternative to big-name corporations. During a marketing seminar I attended, an expert discussed how niche platforms like a prioritize customer convenience and trust through streamlined processes. This example highlighted how focusing on frictionless experiences can foster loyalty and set businesses apart. Social media advertising efforts, celebrity endorsements, valuable sales promotions, and sponsorship of charitable or local events are all popular avenues for building brand equity. However, one of the most challenging aspects of marketing lies in discovering how to quantify success in this arena.
How Do You Measure Brand Equity?
There has recently been a change in the process of measuring a company’s brand equity. Previously, it was sufficient to state that strong brands are just “more preferred.” Today, we know that brand equity is a shifting, fluid concept. It is bolstered by marketing and worn down by time.
In an article from Marketing Tech News, Professor Eric Bradlow – faculty director of Wharton Customer Analytics Initiative – shares the modern perception that there is more to this model than mere favorability. This includes:
- Understanding how brand equity impacts customer choices
- Customer experience is the new brand
- Appreciating that strong brand equity leads to improved marketing productivity
He cautions that a data model ignoring these factors may lead to erroneous pricing decisions, which can negatively affect your bottom line. Of the above, the most critical component is customer experience.
Why Customer Experience Matters
It’s no secret that your clients’ opinions will be shaped by their experiences with your products or services. In the digital age, customers have developed higher expectations; with the world at their fingertips, a single negative incident can cause them to seek out an alternative company to support. Beyond boosting product ratings or decreasing wait times, the job of an owner is to fully understand the customer journey. By developing a thorough grasp on client pain points, you can optimize your services and prevent defection to a rival business.
There are numerous benefits to a customer-first approach.
- Research shows that it’s more expensive to find new customers than to keep existing ones.
- Existing customers spend about 67% more than new customers.
- Data and analytics tools allow you to fill the gaps in your customer journey.
- Optimized customer journeys lead to improved customer satisfaction.
- Increased referral sources: a happy customer is the best marketer.
- Positive customer experience impacts brand differentiation more than price and product.
What you may not consider is that every single choice you make as an owner impacts this perception: the way you market, conduct research, and communicate are all vital variables. As mentioned in the article, focusing on customer experience “may be the single most important investment a brand can make in today’s competitive business client.”
Increased brand equity and its resulting loyalty yields profitable results for businesses and customers alike. Consider creating a highly tailored customer experience that exceeds their expectations – you won’t regret it.
To learn more about digital marketing and branding your business, contact Webconsuls today.
