How strong is your company’s brand and why is brand equity so important? Brand equity is the value of your brand. How do people view your brand? Whether you have a good or bad reputation can make all the difference in the success—or failure—of your business. Companies of all sizes, not just large companies, need to understand the benefits that can be had when they take the time to improve their branding. Keep in mind that branding is about more than just logos and color schemes; it is about the overall “feeling” that your company brings to mind when people hear your name.
Below, you’ll find some of the biggest advantages that come from having strong brand equity.
Ease of Recognition
When you have a strong brand, you will be building customer recognition. Brand consistency across all customer communication helps. The more often a customer sees your company logo, colors, taglines, and expressions, the more familiar they will become. Without recognition, there will not be as many sales. Some of the world’s most instantly recognizable brands include Apple, Coke, and Nike. Their slogans and taglines, the look of their products, their logos, and their brand messaging all work together to create the brand image.
While not all companies will reach worldwide audiences, the goal of creating a strong and consistent brand to increase recognition should always be kept in mind. You want people to see your logo on Twitter, on a product, or in advertising and have your company instantly come to mind.
When they recognize your brand, there is a greater likelihood of them buying from your company. Having positive brand equity can help make it easier for you to grow your business in your main market, as well as in new markets.
Strong Brands Help Differentiate from the Competition
All companies have competition. You might be providing similar products and services like many other companies today, but this doesn’t mean that you are exactly the same as those companies. You aren’t a cookie-cutter copy, but how do you differentiate yourself from the competitors? It happens with branding. Your branding can position you in a way that makes you different from the competition, even though you might be offering similar services and options.
In these cases, people aren’t just coming for what you offer. They are coming because they recognize your brand and have come to trust you. The brand, whether it’s the look of your products, the packaging, or your story, is what helps you stand out from all of your competitors.
The last thing you want in today’s competitive world is to be a wallflower brand that blends in with all of the others. Strong brand equity means you can stand apart from others and get noticed. This is what will help your company to stand on its own rather than getting compared with all of the similar companies in the market.
Strong Brands Can Create Emotional Connections with the Customers
Emotional branding can help to improve your brand equity, as well. This type of branding is all about creating a connection to your company that helps to separate it from the competition. Creating emotional connections can increase customer loyalty, which means it often becomes easier to retain customers.
Companies can create more of an emotional connection with customers in a range of ways. It could be done through the story of the company. What is it that makes the company unique and where has the company struggled and overcome difficulties? What causes are important to the company?
Storytelling in your branding and marketing can go a long way in getting people engaged with the brand beyond just the products and services offered. Great storytelling can create a psychological and emotional impact. This is something that your company should consider when trying to grow brand equity. Some of your ads and content should tell a story. Hit on the pain points of customers that you’ve helped. This creates empathy with your brands in the eyes of many customers, and this can often lead to bigger sales.
However, you don’t want to overdo it with the emotional angle. People are looking for honesty and do not want to feel as though they are being manipulated into buying products and services from your company.
Charge Premium Prices
One of the other top advantages of strong brand equity is the ability to charge more for the products and services you offer. When people view your brand as being better than others, they are willing to pay a premium for your offerings. Consider Apple, for example. The phones, computers, and tablets sold by Apple are usually far more expensive than other brands. Yet, whenever there is a new iPhone release, people flock to the device no matter how much it might cost.
Even when brands have identical ingredients, as is the case with many items you’ll find in the grocery store, people often opt for the brand names they know. Even though the products might cost more, the brand equity makes people think that buying the brand name is the better option. This is even true when the products are not just functionally the same but have the same exact proportion of ingredients. Over-the-counter pain medication is a good example. People are willing to pay more for Tylenol or Advil even though the store brand has the same ingredients. Plenty of other luxury brands can serve as examples, as well, including Prada, Rolex, and Rolls Royce.
If you want to charge a premium for your products and services, you need to have strong brand equity. This is one of the main reasons that many companies work so hard to develop and strengthen their brand.
Better Negotiating Power
When you have strong brand equity, you will find that you often have greater negotiating power, as well. When you are working with distributors, manufacturers, and vendors, having a valuable brand is a benefit not only to you but also to them. When they see that you have customers that are happy and willing to buy your products, they want to work with you. They want your products on their shelves. This will put you in a good bargaining position, which can lower your costs. You will also find that positive brand equity means that you will have an advantage when it comes to negotiating with investors who want to put money into your business.
Develop Credibility for New Product or Service Introductions
If your company is like most others, you won’t have just one product or service. You are likely innovating and creating new items that you want to sell to your customers. When you have strong brand equity, you will find that it becomes easier to roll out new products. This doesn’t mean that the marketing department can relax, of course. It simply means that some of the hard work has already been done.
People who already know your brand will be more willing to consider new offerings from your company. They already trust your company and it becomes easier to convince them to buy. Once again, Apple products are a perfect example of this. When they come out with new products, people are willing to buy them because of the branding. People know that there is a good chance they will be getting a quality product.
Strong brands increase customer loyalty and customer loyalty equates to more sales. It also means that you are likely to have more word of mouth marketing, courtesy of those happy customers.
Attract and Retain the Best Employees
This is an advantage that many people don’t consider when it comes to strong brand equity. Most of the time, businesses think about their customers first when it comes to their branding. However, it can also help your current and future employees. When you have a brand that is clear about its mission and values, it makes people want to work for the company. They will be proud to associate with your business.
Think about some of the biggest brands and the type of talent that they are able to retain. It’s not just that they tend to pay well, but they have the type of power and reputation that people are looking for in an employer. A great brand will help to keep the employees you have, as well.
This could mean better talent coming in at all levels of your company. It will also mean that you have less turnover, which helps to reduce costs. Even though this isn’t the first thing that comes to mind when it comes to brand equity, it is a benefit to remember.
Improve Financial Performance
Ultimately, the goal is for your business to grow and for your financial performance to continue to improve. The stronger and more recognizable your brand becomes, the easier this will be. Powerful brands often find it easier to expand their business to other states and even other countries, and often the brand reputation will follow them. They will have a base of customers ready to buy from them no matter where they might try to sell. For this reason alone, it’s worth putting in the work to strengthen your brand further.
Armor Against Negative Exposure
No matter the size and reputation of the company, there is always a chance that there could be mistakes made that would tarnish your brand image. However, when you have a strong brand, these mistakes will often be forgiven by the vast majority of your customers. However, this doesn’t mean that you can simply ignore missteps made by the company and hope that the ensuing negativity will simply vanish. Companies need to be proactive about putting out additional messages that clarify their position, make apologies, etc.
Having strong branding can act as some shielding against problems that would potentially cause severe damage to a brand with negative equity. It’s one of the advantages of strong brand equity that you hope never comes into play, but it’s nice to have some extra protection in the event that it does.
Customer Experience is an Important Part of Brand Equity
Something to keep in mind when it comes to building strong brand equity is the experience your customers have when dealing with your brand. Building a stable base of loyal customers is difficult. Losing those customers is easy. If the customers receive poor service, poor products, or have other negative interactions with your brand, their loyalty will evaporate no matter how long they have been a fan.
Companies that want to foster a strong brand need to be sure that they have more than just their marketing on point when it comes to branding. Part of the branding process needs to be providing excellent customer service. Being responsive to customer needs online and offline is essential.
Interestingly, when you have customers that are generally happy, they will continue to buy from you. However, only some of them will become true brand advocates that talk about your products, leave positive reviews, and go above and beyond to support your company. Unhappy customers are far more likely to be vocal about their disappointment with your brand. They will leave bad reviews and will talk negatively about your brand on social media. If your brand is strong enough, it can weather these problems, as discussed above. However, with too much negativity, it could start to tarnish your brand. Companies should always strive to provide their customers with the best service possible. It doesn’t mean that the customer is always right, but it does mean you should try to placate them where possible.
Increase the Longevity of Your Company
You want your company to succeed, but without strong brand equity, it won’t be easy. However, when you take the time to work on strengthening your brand, along with your products and services, your business can see long-term success. Of course, you have to work on improving your brand.
You want your brand to be consistent across platforms, and you want to have excellent online and offline brand communication. Provide your customers and potential customers with quality, relevant content, be genuine, and maintain an active social presence. Provide a great customer experience, as mentioned above, and it will strengthen your brand equity.
Creating a Strong Brand is Worth the Effort
As you can now see, having a strong brand is essential for any business today. Although it can take time and effort to create brand equity, it is well worth it. Just keep in mind that the work is not a one-time effort. You need to continue to work to improve and maintain your brand going forward.
Creating a strong and consistent brand can be made easier when using a digital asset management solution. These platforms allow for all of the assets to be gathered into a single location for easy access. Version control ensures that the team knows whether they are working with the latest version of the access or not. Brand managers will want to consider the benefits of using a DAM system if they do not already have one in place.