Brand equity is a simple set of measures that explain and predict the market reality for your business.
The importance of brand equity for a company is enormous. It defines if people return for your products or services. Besides, the higher the brand equity, the higher your prices may be.
You can see the statistics of the highest metrics in 2022. Thus, let’s take a closer look at these metrics and how to check them. Let’s start!
First, we reveal to you the brand parameters that determine brand equity.
They are fourfold:
- Brand awareness
- Perceived quality as the foundation of a brand’s reputation
- Brand association includes anything that is not directly related to the brand’s products
- Clients’ loyalty
One can test the result by summing up the four listed dimension metrics. Keep reading to know that!
There are the following brand equity marketing tools an entrepreneur can use to improve brand equity. We will go through them now and suggest an algorithm of action.
Awareness: Make your Brand Recognizable
That tip seems obvious and expected. Indeed, you have to promote your company, service, and goods to increase sales and profits. Yet, this advice goes far beyond some target ads or city street posters. That is about how other people of different groups value you.
To calculate that measure, one should collect answers to questions:
- Do people know that product?
- What hints give them to recognize the product?
- Do they find that on the product shelf?
That takes time and effort to give the perfect result back. But use different communication channels: e-mails, social media, and tests on the streets.
You can involve dedicated software development services to assist you with outsourced software testing services to analyze the performance of your digital assets, apps, and client-related software.
Whether the percentage of excellent or negative answers does not oblige you, here are some ideas for improvement.
Corporate Identity
That is your brand’s face helping the client to identify the company among hundreds of others. Identity works to increase the recognition level and affects success. It is suitable for advertising campaigns and sales conversion.
To improve brand awareness, think about the elements. Customers will recognize them when searching for your products and services. Consider the creation of a brand book.
A brand book maintains a single image of your brand, regardless of who is working on it. This will be easier to delegate tasks to designers, marketers, and copywriters. With the brand book, you will be sure that the logo in the ad will be the right color.
Only in this case will the brand book reflect the company’s style and not dictate artificial rules. And save the company time working with colleagues, partners, and contractors.
For example, you know what McDonald’s looks like. It has possessed itself like internal happiness. That image works for already grown people. Then, look at the G.bar, the Ukrainian franchise of beauty salons. It was founded in 2015 but is well-recognized among girls for its unique philosophy and excellent services. Look at that style, and you will always find the salon among other beauty sphere representatives.
Perceived Quality: Work for your Reputation
In a broad sense, quality stands for superiority or advantage. Further, the perceived quality notion refers to a judgment of the consumer. It is different from the goal or actual reality. Thus, you should find out:
- What do people think of your product?
- How do they select what to buy and choose you?
- Will they trust your product without trying it?
That is an abstraction of a higher level. Sure, it means the best rating that people give on their feedback. Then, consider brand assets. Those are about patents, certificates, brand recognition, and awards. It is a perfect approach to collaborate with other influential brands or stars for the consumer.
Do Effective Positioning
The worst-selling product targets “everyone” and no one simultaneously. To win a place in the market and create a unique image about yourself in the minds of consumers, you need to create a precise brand positioning. Develop a specific company image that conveys the values and advantages it offers.
Products without positioning fall into a large group of unknown and incomprehensible offers. Consider the British cosmetics Bodyshop. They claim they are eco-friendly and use natural components. You can see the revenue of the Bodyshop in Statista. They are constantly growing, and people trust they do high-quality products.
Measure Clients’ Loyalty Level
The strategy is relevant when focused on a specific segment of people. As a rule, they can be distinguished by a set of parameters or one individual property, as when setting up targeted advertising. The strategy is suitable for niche products that produce a product with specific properties for a specific group of people.
Use MBE Technique
In 2001, Korean scientists Yo and Donthu developed a method for assessing brand equity. That one conceptualized the ideas of D. Aaker and K. Keller. It measures all four dimensions. Its peculiarity is that it evaluates brand equity measurements by self-report questions. Three questions are designed to assess loyalty.
- Do I consider myself loyal to brand X?
- Will brand X be the first on my list of choices?
- I will not buy other brands if brand X is in stock in the store.
The survey or questionnaire is conducted on a representative sample. The simplicity and ease of the MBE method allow it to be carried out within the framework of the omnibus and telephone surveys. Here, we all have a list of trusted companies.
For example, when we prefer one store over another, we return. It is valid for all marks, small or big. For example, the TOTÉ. That is a Ukrainian brand that offers stylish and modern looks. Whether you love it once, you will come for the new collection.
Brand Association
That parameter speaks for itself. What first thought comes to people’s minds when they hear about your company? Create a brand card to find it out and use the knowledge correctly.
It will contain all the BAs, distributed according to the strength of connection with the brand. Using the map allows the brand manager to prioritize work on each of the BAs, as well as correctly emphasize BAs in creative materials.
Identification of the presence of BA. The most popular method for detecting are surveyed:
- Closed surveys (the respondent chooses the words that he associates with the brand understudy)
- Open surveys;
- Laddering is a specialized technique for in-depth interviews (Meshkov, 2010);
- Semantic networks (a technique for compiling a network of associations).
The method depends on where your audience is most active. If social networks are well developed, you should ask there. Then you get and analyze statistics.
For example, people hear about cutting-edge solutions for home safety. They see ads claiming that it is the first wireless technology that sends notifications to house owners and police.
Besides, you can adjust that to work for your needs. You can cut off the electricity and retrieve it remotely when you need it. Thus, when you come to the selection, you will choose Ajax among the less-known options.
Let’s devote a few minutes to the right approach to the mentioned interviews.
Interview clients
Get feedback from people about your company’s work in the form of a number – it is needed for calculations. You can’t ask people if they’re generally satisfied with how the company works.
Many will answer yes to such a question, and you will get biased results. For the information to be helpful, you should ask one question: “With what probability from 0 to 10 are you ready to recommend our company to your surroundings?”. The answer will be the number we need.
You can survey in different ways:
- Call all customers
- Send an SMS and ask to send a number in the answer
- Make a mailing list
- Ask on social networks
The more clients you interview, the more reliable the result will be. Interviewing everyone is unnecessary, but the sample should be large enough to avoid bias.
A small company needs to interview at least 50% of customers; a large company will need 10–20%.
Calculate Index
Write down all the answers and, based on them, calculate the NPS using the following formula. Divide all clients into three groups:
- Supporters (score 9-10 points)
- Neutral (score 7–8 points)
- Critics (score 0-6 points)
Then we proceed according to the following scheme. We divide the total number of supporters by dividing them by the total number of respondents and multiplying by 100.
For example, you interviewed 1000 customers with 400 supporters. Divide 400 by 1000 and multiply by 100 to get 40%. For example, you have 150 critics. So, we get 15%. Now we calculate NPS, subtracting the percentage of critics from the supporters. In the example above, we get 25%.
The only unambiguously bad index value is negative. If NPS is less than zero, the company has more critics than supporters. Customers do not come back and spoil your reputation.
Final Word
To sum up, keep tracking your current indicators. Try increasing awareness, loyalty, brand associations, and perceived quality parameters.
Work on creating an excellent customer impression of what you do. Discover that topic better, use the knowledge in your routine, and look for a skilled team.
We wish you good luck in your endeavors!