The importance of brand equity for industrial companies
Brand equity refers to the perceived value of your brand by the public. It is not so much an economic value as a perceptual value, although one cannot be understood without the other.
It is about all those tangible and intangible assets, perceived by consumers and/or audiences and which translate into positive or negative experiences, thus creating a mental positioning map of your brand with respect to others and in which it is in your interest to be well positioned. In this article we explain what you need to know about this concept and how to apply it.
What is brand equity?
Brand equity is the perceived added brand value of your company, derived from the perceived quality of our products or services, the customer experience in the interaction with our company and the corporate reputation perceived by our target audience and the general public.
This perceived value would be the result of the branding and corporate image actions carried out up to that point. It is of vital importance that the resulting value is positive, as the economic results of your company depend on it.
Benefits of positive brand equity
A strong brand reputation means new opportunities for growth, increased profitability and a clear competitive advantage, as consumers will be willing to pay more or less for our products, depending on whether our reputation is positive or negative.
It is also a very useful reinforcement when we want to enter new business areas, or when negotiating conditions with suppliers, in case we have a strong position in the market.
How to measure brand equity
To calculate the brand value, the following metrics should be taken into account:
- Financial metrics: We must identify the appropriate and Key Performance Indicators (KPIs). The financial aspect is important because from them we can extract the market share of our company. Among the most important online and offline metrics of our business, we could highlight revenue, business profitability, growth rate, investment and costs for acquiring and retaining new customers.
- Strength metrics: It is important to have constant brand reputation management. You should regularly monitor the health of your brand in terms of customer loyalty, brand image, social media feedback, accessibility and brand awareness and interest.
- Consumer metrics: Analyse customer buying behaviour and assess customers' emotional connection to the brand. To do this, you can use specialised survey software to monitor the results.
Tips for building positive brand equity
To start, measure your brand equity with a detailed audit of your company to find out the current state of your brand. This way you can compare your results with your marketing objectives set out in your marketing plan.
Secondly, gather as much information as you can about your social media audience, conduct satisfaction surveys, analyse comments, reviews or messages that reach you through digital platforms.
Translate and quantify all this information into qualitative numerical values on a scale of 1 to 5, so you can get an overall idea of what people think of your brand. At this point, you will get a detailed view of the points to improve and you will be able to apply tailored actions for each type of branding and/or communication problem.
Conclusions on brand equity:
- Brand equity refers to the value that a specific brand adds to a product or service.
- It is the positive perception or emotional attachment that consumers have towards a brand, which can influence their purchasing decisions and overall brand loyalty.
- It is created through consistent marketing efforts, positive customer experiences and overall brand reputation.
- Companies with strong brand equity often have a competitive advantage in the marketplace and can command higher prices for their products or services.