THERE’S NO BRAND VALUE WITHOUT CUSTOMER PERCEPTION – HOW TO BUILD YOUR BRAND EQUITY?

The greatest strength and role of branding lies in distinguishing a specific product, service, or company on the market. One of the most important elements of it is good Brand Positioning, the process of a specific brand building a suitable position in the minds of its target groups.

“A brand is considered to be positioned effectively when its main characteristics have been planted in the minds of consumers/clients as much, as they are able to differentiate it from other players on the market and their offers.” (Strategyscope)

Today, brands mean much more than a logo, beautiful packaging, or an engaging message. Brands have even become status symbols of lifestyle and social affiliation – their customers, users and clients define themselves by their phones, clothes and car.

It is a fact that there are almost no functional differences between many premium category products. Thus, the battle is mainly on the emotional battlefield to win the favours of customers, and then make them turn into loyal customers and raving fans.

Let's just think that owning a certain class and brand of car is an important means of expressing the position and status of a recognized businessman/businesswoman. Or if a stylish watch peeking out from under their suit, which negotiating partners know exactly how much the value of it – that's again a strong element of their personal branding.

The same is true for the younger generations in terms of their relationship with trendy and popular brands. They send out a strong message by showing off which gym they have a membership to or when they go to a party at the most popular nightclub in town and they take selfies about drinking a bottle of premium whiskey.

The global pandemic made brand owners, Marketers and other experts rethink their branding strategies furthermore, in certain cases the long-extended economic crisis forced them to reposition some or all of their brands.

But how do all of these have a direct effect on Brand Equity, and what factors influence it? And what does Brand Equity mean at all?

In 2022 we live in the era of human-centred brand and customer interactions. So, it's important to point out that Brand Equity is not built by advertising which is still hard to understand for so many brand owners! It’s not about how much money you inject into fancy advertising or different types of Social Media campaigns or whether you have put the face of a popular stand-up comedy star on the packaging of your product.

?? WHAT IS BRAND EQUITY

????????? Brand Equity enhances sales and other transactions and has a direct effect on brand loyalty and competitiveness, furthermore, the overall growth of the company.

????????? Brand Equity strengthens trust based on previous customer experiences and generates a stronger positive brand reputation through great customer reviews and distributed user-generated content.?People are not only more likely to buy from these brands, subscribe to their services, or attend their events because they associate positive emotions with them by seeing their logos on products or hearing their names, but they also recommend them to others.

????????? Brand equity is why other brands, service providers, or companies want to advertise with you! – e.g. Have you ever tried to count how many brand logos can you recognize on Formula 1 race cars or displayed on the football stadiums' advertising boards?

“Brand Equity is the commercial value of a brand derived from the customers’ perception. It refers to the value a company gains from its name recognition when compared to other equivalent brands. At the same time, it is much more than the brand recognition itself – it means the added value that a name carries.” (Strategyscope)

?? YOU NEED A BRAND EQUITY MODEL TO START BUILDING IT!

Building up Brand Equity is a complex process and it doesn’t happen overnight. It is important to understand that there’s no brand value without customer perception! Again, it’s always about them how they perceive your brand and not what you say about it.

One of the most widely known basic brand equity models is the so-called Customer-Based Brand Equity (CBBE) model defined by professor Kevin Lane Keller (“Strategic Brand Management” - 1997) and illustrated as a pyramid. It explains how to build a strong Brand Equity by dividing the pyramid into different levels where the company has to understand their customers and design their strategies accordingly.

STEP 1 – BRAND IDENTITY – This is the base of the pyramid answer the fundamental question:

• “Who are You?”
• This is the stage where you have to generate brand awareness.
• It’s all about how your company wants the target audience to perceive the brand and makes your brand set apart from your competitors through a set of visible elements: the logo, symbols, colours, images, website design, etc.

STEP 2 – BRAND MEANING – Once you have captured your customers’ attention, you have to define

• “What exactly do you do and How?” ?and provide more information about your products and services:
• the characteristics and performance,
• the features, looks and style,
• user-friendliness and reliability,
• the customer experience and
• the value for money.
• In this phase, you also have to make research and in-depth analysis of your ideal customers and potential clients in order to understand who they are and what are their problems and needs your product aims to solve.
• Brand performance and brand imagery are two important parts of the brand meaning – while extraordinary brand performance can establish such strong brand equity as Apple or Ferrari, brand imagery means the image that customers perceive the brand.

STEP 3 – BRAND RESPONSE – In general customers have expectations about a brand and when it meets it meets requirements it generates positive feelings and satisfaction about it. If your brand is able to go beyond the expectations of its ideal customers/clients, that makes them delighted and this is the point where they not only will give you great customer reviews on your website but will spread the word on the market.

STEP 4 – BRAND RESONANCE – This is at the top of the pyramid and at the same time the most difficult phase aiming to build a strong relationship between the brand and the customer. According to Keller, this is the stage where customers start to identify themselves with your brand or become psychologically bonded with it, meaning they become advocates.

This is a very important phase in terms of

• nurturing the “warm leads” and making them buy,
• initiating the customers who already bought from you to repeat the purchase or upsell to them and
• strengthening brand loyalty!

They will not only create user-generated content with your brand but will invite others to use them, join your community, participate in your events, etc. This is the point where they stick to your brand and they don’t want to stick to another one or a similar one because they are deeply associated with it.

Conclusions:

Building customer-based Brand Equity is a precise process that requires strategic thinking and actually setting up your strategy about it and also being committed. Start at the bottom by defining a great Brand Identity, then you make sure that customers get to know your brand and how your business serves them and finally create a successful brand which your ideal target audience likes, follows, supports, recommends and trusts.

In order to strengthen Brand Equity, you must consistently produce quality products and provide valuable services throughout the whole sales cycle and beyond, at all the touchpoints at which your target audiences interact with your brand!

Editor’s Note: Branding Strategy is a huge subject with several various verticals and aspects. Strategyscope will further continue to discuss this subject but doesn’t intend to replace Wikipedia and high-quality professional marketing resources either. Rather give you guidance, and share best practices based on real-life experiences and client cases while keeping you up to date.        

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STRATEGYSCOPE is the Marketing, Branding & Content Strategy Compass for your business boost. Each week the newsletter covers various topics within these 3 key areas to guide SMBs (Small and Medium-sized Businesses) Entrepreneurs, and Solopreneurs to fine-tune their strategies and utilize the potential of Marketing for their sustainable growth.

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