6 Key Components Of Brand Equity For Business Growth

Have you ever asked yourself what the value of your brand is? That’s brand equity.  

Aside from choosing a memorable business name, brand equity is another thing you have to consider when growing your business. It might sound like just another marketing jargon that’s going around social media sites, opinion pieces, and blogs—but it’s more than that. 

Let’s dive deeper into what is essentially an asset for your company and its key components that will help you achieve business success. 

Brand equity is the added value that a consumer associates with a certain brand as a result of their perceptions of and interactions with the brand. Positive brand equity is produced by positive experiences. On the other hand, negative brand equity is produced through unsatisfactory expertise. 

It’s your customer’s awareness of your brand, perception of it, and their loyalty toward you over the years. Offering clients items that provide a memorable experience, exceptional quality, and highly trustworthy products may help build brand equity over time.

Brand equity is a reflection of how people think, feel, and act towards a certain brand. While these are purely intangible assets, their effect on market prices, profitability, and demand will be evident in your book of records. 

Brand equity is made up of several different components. Some of the most important ones you have to be aware of are: 

1. Brand Awareness 

The very first step in brand building is the most important one you’ll take. Brand awareness happens when a customer can recognise a brand and connect it to a product or service. This is the initial phase of creating brand equity since it takes time for customers to get familiar with a brand before it can begin to increase in value.

Just think about brands like Coca-Cola, Disney, Apple, and Nike. What do they have in common? They’ve all invested in brand awareness so much that they’ve come to a point where consumers can easily recognise their brand just by looking at their logo. 

To effectively build brand awareness, one of the most essential things you have to consider is proper advertising on relevant platforms such as social media and television, as well as eye-catching visuals, blogs, and case studies. Once you’ve built a good image of your brand, people will follow. 

1. Brand Association 

Have you ever linked anything with a brand you love? Maybe something along the lines of Tesla is electric or Skittles is sweet and colourful? That’s brand association. It’s the deep mental impression your customer has of your brand. 

This component of brand equity develops as a customer engages with a brand. To create a favourable association, brands should align themselves with something positive.

When a buyer thinks about a certain brand, they begin to recall its logo, its brand colours, the product or service it offers, their prior interactions with this brand, the store where they can buy it, and, in the social media age, they also recall the influencers who promote these brands. Building strong brand associations is crucial as it promotes repeat business and word-of-mouth advertising for your brand. 

1. Perceived Quality 

One of the most powerful influences on consumer buying behaviour is perception. The perceived quality of a product depends on factors such as performance, reliability, durability, compliance with specifications, finish, service, and fit. For a service, perceived value is influenced by responsiveness, tangibles, competence, dependability, responsiveness, and empathy.

Brands with a greater reputation for quality may afford to charge a premium. The premium can also be used in brand-building initiatives.

1. Brand Experience 

A customer’s collective experience with a product or service and the brand as a whole is referred to as their brand experience. It encompasses not just what you offer but also your customer’s pre-sale, sale, and post-sale experiences. 

When your customers have a positive brand experience, they will view your brand as superior to other brands and will thus unquestionably choose it over all other competing brands.

If you want to improve this component of brand equity, consider evoking positive feelings and emotions from your customers. When done successfully, this will result in brand-loyal consumers and ultimately raise brand equity.

1. Brand Preference 

When a customer will go out of their way to buy the brand they prefer, that’s brand preference. Even if it costs them more money and requires a little bit of effort to purchase, they will stick to their chosen brand. 

Brand equity is significantly influenced by brand preference. This component of brand equity is often a result of quality, service, customer loyalty, consumer choice, and effective marketing. 

1. Brand Loyalty 

The best way to guarantee repetitive sales and word-of-mouth marketing is by fostering brand loyalty with your customers. Even with price increases or decreased convenience, your brand will still see repeat business from your devoted clients. Loyal consumers avoid being swayed by the marketing campaigns of your rival companies, assuring continued usage of your brand’s products or services. 

With higher brand loyalty, you can essentially cut your company’s marketing expenses. You can also launch new products aimed at the same customer base. 

To wrap it all up, brand equity determines how valuable your brand is in relation to your customers’ knowledge of your brand, the associations they have with it, how they judge the quality of your products, and the degree to which they show how loyal they are towards it. 

Given its enormous influence on your brand’s capacity to maintain a competitive advantage over time, building and strengthening your brand equity is crucial now more than ever. For more tips and tricks on digital marketing, don’t forget to check out Aus Digital Media’s other informative articles.