Nothing like a popsicle on a hot day and a band-aid for a scratch. But did you know that Popsicle and Band-Aid are actual brand names and not product names? 

Shocking right? 

Well, that’s the power of building brand equity – your brand name becomes synonymous with the product name, and the best part? Your brand can live rent-free in the minds of consumers. 

But what is brand equity, and how do you make it work for you? Read on if you’re ready to become the next big thing.

What is Brand Equity?

Brand equity is the value your branding adds to your products, services and business. It’s a measure of the overall impact of your brand and its perception among consumers. Brand equity represents the difference in value between a branded and unbranded product.

While your brand’s public perception can be measured as a standalone, separate from other brands, brand equity takes your competitors into consideration. This means that when measuring brand equity, it is often related to other similar brands.

So, your brand equity is how much trust and value consumers place on your brand over other brands with similar products. 

There are two types of brand equity – positive and negative. Businesses with the former have larger market shares, more loyal customers, and more sales. All the good stuff happens when a company has positive brand equity. 

But if brand equity is negative, the reverse happens. Consumers have a hard time trusting the brand and sales tank. If nothing drastic is done to turn public perception, the business might eventually go belly up. 

Note that brand equity is an additional value that strong brand recognition brings. While it impacts brand equity, it is just one part of the equation.

Why is Brand Equity Important?

Building brand equity pays off in many ways over time. As your brand grows stronger, you’ll see positive changes, starting with how people recognize you. Consumers start to know who you are and remember your name. This familiarity breeds trust, which often translates into customers choosing your products when it’s time to buy. 

But the benefits don’t stop at just being recognized.

• Reduced price sensitivity

Brand equity is why Apple lovers count down to September every year and cue up to order the new set of iPhones regardless of price. When you’ve built brand equity, you give yourself the leeway to increase price without fearing a drop in sales. 

Why? Trust and prestige. 

81% of consumers need to trust a brand to buy from it, and when consumers trust your brand above others, they won’t mind paying premium rates for your products. They might even prefer it to paying cheaper for similar products.

• Increased sales 

The relationship between brand equity and sales is linear. As one increases, so does the other. That’s because 77% of consumers make purchase decisions based on brand name.

So, if you build positive brand equity and consumers associate your brand name with quality, you’ll make sales. 

• Increased market share 

It’s a no-brainer at this point that positive brand equity translates to more customers. Building brand equity strengthens trust among your current customers, ensuring they come back for more, and it makes it easier to persuade new customers to come on board because they already know something about your brand.

• Brand survival 

Let’s face it – business can be unpredictable. The economy can take a hit from inflation, poor policies, or a full-blown crisis. But companies with good brand equity often fare better. They’re more likely to keep some customers coming back despite the challenging conditions. Plus, if you make a brand blunder, like Google’s AI ad, you bounce back faster with strong brand equity.

It won’t make you immune to tough times, but it can help you ride out crisis more comfortably than less-known competitors.

How to Build Brand Equity

Building brand equity takes time; it’s not something that happens overnight. The good news? If you stick to your plan and keep at it, you might see positive results sooner than you think.

Want to boost your brand’s worth? Here are seven ways to get started: 

1. Define your brand

Brand equity starts from brand definition and recognition. The market is competitive, and building your brand begins with carving a distinct identity. 

Your brand name, visual identity, and positioning play a big role in building your brand identity. 

Some of the biggest brands with the highest brand equities have distinctive names and visual identities. Take Google and Starbucks, for example. 

Google’s iconic blue, red, yellow, and green colors are distinct and recognizable anywhere. The same goes for Starbucks’s green and white Siren logo.

With a unique brand visual and identity, it’s easier for consumers to spot your brand and purchase from you. 

2. Consistency is key

Brand equity takes time to build because consumers develop a perception of your brand through multiple brand experiences. 

All touchpoints between your brand and consumers are an avenue to provide a great brand experience. This includes customer service, in-person experiences, product quality, packaging, and delivery. Even social media interactions make an impact on the brand experience. 

Providing consistent brand experience across all consumer channels reinforces trust and positive brand equity. 

3. Tell your story

Don’t underestimate the power of a good story and its impact on marketing. Everyone knows that Microsoft was built from a garage, while the inspiration for Airbnb came from the floor of a real-life loft.

These stories create an emotional connection for the brands’ target audiences and show consumers the brand mission. Your story is essential for building the kind of relationships that add up to powerful brand equity.

4. Build brand awareness

Consumers need to know you exist before your brand can become a household name.

So, how do you get people to notice you? It’s all about smart marketing and a look that stands out. Remember when we talked about creating a unique logo and color scheme? That’s your visual identity. It helps people spot your brand right away.

Once you’ve done that, spread the word. Use social media, run online ads, collaborate with influencers, or support a cause you care about. These are all great ways to get on people’s radar.

Take Coca-Cola for example. Sure, they’ve got an iconic color and a catchy name. They’ve capitalized on this by supplying cafes across the world with branded parasols and tablecloths, effectively putting Coca-Cola everywhere.

5. Express your values

Defining your brand values can help you attract customers who think the same way. And when people connect with your values, they’re more likely to stick with you. This, in turn, boosts your brand’s value in the long run. Research has shown that 71% of consumers prefer to buy from companies that align with their values. 

Take TOMS Shoes, for example. When people think of TOMS, they think of giving. The company is known for donating shoes to a kid in need for every pair sold. This approach has won over lots of customers who care about helping others.

6. Provide exemplary customer service

Great customer service can make or break your brand. It’s how you turn one-time buyers into loyal fans.

Did you know that 88% of people start trusting a brand after patronizing it three times? That’s three solid chances to wow them with top-notch service.

So, how do you do it? Make sure every touchpoint is on point. Whether emails, phone calls, or social media chats, aim to leave customers feeling good about interacting with you. When people walk away happy, they’re more likely to come back.

7. Audit your brand

A brand audit is a process that allows you to analyze and measure your brand’s performance. Survey customers, reach out to members of your target market who aren’t your customers, and appeal for anonymous feedback on brand performance from internal stakeholders.

At the end of a brand audit, you should be taking one or a combination of these three steps: 

• Improving aspects of your brand identity and marketing 
• Discontinuing strategies that aren’t making any impact or have negative impacts on your brand equity
• Testing new strategies for building brand equity 

In a brand audit, you should look at your brand goals, identity, and activities. You should also gather and analyze data on consumers’ wants. Cross-reference your activities with consumers’ desires and make the right adjustments to improve your brand equity. 

How to Measure Brand Equity

Now that you’re implementing strategies to increase brand equity, you need to measure the impact of your efforts. And that’s where the problem lies. 

Brand equity isn’t easy to measure. It isn’t like marketing and sales strategies, which have defined KPIs. Brand equity can be measured by monitoring the performance of the metrics (sales and brand strength) that it affects.

The best way to know what consumers think of you, though, is to ask them. There are several ways to get the pulse of the consumers on your brand and your products. Some require some cost and preparation, while others don’t. 

If you’re low on budget, your review page is a free but reliable place to start. Read through reviews, both good and bad. 

Another free resource is your social media pages. You can try searching for your brand’s name online and reading through what pops up. Check platforms like Reddit and Quora for undiluted opinions. 

While these two options are great, investing in social listening tools like surveys will give you a wider range of honest responses. If you’re so inclined, you might also know why consumers see your brand the way they do. This information can help you reposition yourself to build a stronger brand equity. 

Wrapping Up

Brand equity is the measure of what consumers think of your brand. It’s a vital metric to monitor because it affects your market share, revenue, and sales. 

Smart businesses invest in building a strong brand equity more than trying new strategies to improve sales because they know that a strong brand equity will net in sales in both the short and long term.

Now you know all about how to build brand equity, you’re ready for the first step in launching your business. It starts with a unique brand name, so check out our Premium Domain Marketplace today: https://www.atom.com/premium-domains-for-sale/all