Who doesn’t instantly recognize the curves of a Coca-Cola bottle or the Apple apple?! But the strength of a brand goes far beyond that, and this is where the concept of brand equity comes in.
I’ll explain exactly what it is and some factors that influence your brand equity in the quest to achieve your business goals. Come with me!
What is Brand Equity?
Brand equity is the brand’s assets, that is, the brand’s value based on what it represents — whether in reputation, credibility or objective and subjective connections —, reflecting how consumers perceive, feel and recognize it.
Although a brand is an intangible asset, its reputation influences purchasing decisions and determines many aspects of a company’s long-term financial dynamics, including “what it’s worth” in a potential sales opportunity.
Therefore, when a company invests in building its brand and is successful in this process, it generates a value that can be translated into accounting and financial terms — what we call brand equity!
And, contrary to other definitions, which treat brand equity as an “impression” or “something that cannot be measured in numbers” — in much of the content found here on the Internet —, I tell you:
Brand value is, in fact, a financial value.
The ABA (Brazilian Association of Advertisers) itself defines brand equity as:
1. Financial or market value of a given brand. In other words, the monetary, “tangible” value of an intangible but real asset, which is the main factor responsible for the difference in the value of financial and logistical assets and the total value of the organization that owns the brand.
2. Market power (franchise) of a given brand. In other words, how much value the brand adds to its “physical” assets (formulation, legal protections, captive clientele, distribution, etc.).
In this way, companies that recognize the importance of cultivating good branding and generate positive perceptions, trust and brand loyalty, for example, also create a competitive edge against the competition and consolidate their position in the market, strengthening brand equity!
For example: an Apple smartphone is sold at a much higher price when compared to other competitors.
However, if the brand were removed from the product, the market value would certainly be lower, as part of it is justified by the brand that is added.
Did that make sense? So let’s move on to the next topic:
Brand attributes and their relationship with Brand Equity
When I think about how a brand builds its value in the market, the importance of brand attributes immediately comes to mind — which, in addition to defining the brand, also say how it is perceived by consumers.
Some important ones are:
- Quality;
- Reliability;
- Innovation.
When a brand is consistently associated with positive attributes, it builds a strong, positive image. This image is one of the main components of brand equity!
It is as if each attribute were a brick in the construction of a fortress that protects and enhances the brand in the competitive market.
And when we think about strategies to increase brand equity, strengthening these attributes should be at the top of the list.
It’s a surefire way to ensure that your brand is not only recognized, but also respected and preferred by consumers!
Brand differentiation
In the sea of options available today, what really makes a brand stand out in the consumer’s mind?
Differentiation can also come from less tangible elements, such as Customer Experience, communication style or even corporate social responsibility.
Imagine a clothing brand that not only offers high-quality pieces, but also practices sustainability in a transparent and effective way.
This attribute could be the difference that puts it ahead of other brands in the hearts of conscious consumers!
Those who have distinctive elements have the upper hand to capture the public’s attention and interest, as well as create a lasting brand memory!
And when a brand becomes memorable for something positively distinctive, its brand equity grows.
With unique and distinctive attributes, customers are keen to choose one brand over another, not only because of its products and services, but because it represents a specific value that resonates with their own beliefs and desires.
At this point, I want to highlight the need to communicate this differentiation very well through Content Marketing!
After all, when done correctly, it not only informs and engages, but also transforms perception and strengthens the brand’s position in the market.
So your brand must tell fascinating stories that enchant your audience and present what makes it unique and valuable!
Consumer Loyalty
Consistency is one of the essential keywords to win consumer loyalty.
When the company delivers the promised attributes, it builds a relationship of trust and loyalty with its audience!
And, in a reality like Brazil, where 60% of consumers say they buy certain products from a specific brand, having a loyal base will help strengthen brand equity.
This means you don’t need to spend as many resources to convince the consumer to buy again, because you can add value to your product or service through your brand.
Consider, for example, your favorite smartphone brand.
If you’re like me, once you find a brand that meets all of your expectations—whether they’re related to product performance, customer service, or even company values — you’re likely to continue choosing that brand in the future.
This is because consistency in delivering these attributes builds deep trust. And once that trust is established, it turns into loyalty!
Consumer loyalty is like a treasure for brands, especially considering that consumers not only continue to buy, but become brand advocates, recommending the products or services to friends and family.
Additionally, brands with high loyalty tend to have stronger brand equity. This is because consumers are willing to pay more for products or services from a brand they trust and prefer.
A clear indication that a brand’s brand equity is robust is when, for example, consumers choose that brand repeatedly, even when faced with cheaper or more convenient options.
Emotional associations
In addition to tangible characteristics such as quality and value, the emotional bond between brand and consumer is also part of building trust.
It’s fascinating to see how some brands seem to have a special place in our hearts, almost as if they were part of the family!
Have you ever wondered why this happens? Much of it is due to the brand’s personality and positioning, which are capable of creating deep emotional connections.
And of course, these emotional associations are not the result of chance!
They are carefully cultivated through consistent brand messaging, advertising campaigns that touch our hearts, and communication that goes beyond the product to speak to deeper values, aspirations and desires.
These emotional bonds are powerful in driving brand equity, because they lead us to develop a loyalty that transcends purely rational considerations!
Did you know that 83% of Brazilian consumers prefer to buy from companies aligned with their life values?
That’s right, and 65% of them said they had stopped buying from a company after it “betrayed their beliefs”!
Furthermore, when emotions come into play, we become less sensitive to small slip-ups or changes in the market.
This not only protects existing brand equity, but also extends it, making the brand virtually immune to competition in certain aspects.
Something very much worth considering!
Perceived value
Perceived value is a concept that goes far beyond the price itself!
When customers feel they are getting more value for their money—whether through exceptional quality, innovative design, or positive social impact—they are more likely to develop a deeper, more lasting connection with a brand.
And the company is perceived as more attractive not only in their eyes, but also in the eyes of potential investors, it’s worth mentioning!
In other words: for any brand that wants to maintain a competitive advantage and build or maintain strong brand equity, it is essential not only to deliver quality products and services.
It is also necessary to ensure that all aspects of the brand contribute to a perception of high value, positioning itself as a preferred choice in its niche!
As a consumer, when I feel like a brand offers me something truly valuable, not just in terms of the product but in the entire experience, that’s when it earns my trust — and, of course, my feedback!
How to assess the value of your brand
Assessing brand equity is a challenging task! But understanding the value of your brand is crucial for long-term development.
There are approaches and metrics that can provide important insights. Here are four of them:
- Benchmarking: compares your brand’s strategies with your competitors, to identify strengths and areas of opportunity through indicators such as market share, sales growth and brand recognition;
- Market research: used to understand consumers’ perceptions and opinions about your brand. Through questionnaires, interviews and statistical analysis, it is possible to obtain information about the image, customer satisfaction, loyalty and willingness to recommend;
- Satisfaction survey: this is a way of measuring the experience with your products or services. The NPS, for example, is used to evaluate quality, service, ease of use and other aspects that provide a clearer view of customer satisfaction;
- Recall survey: assesses the degree to which consumers recognize and remember your brand. Questions such as “What brand comes to mind when you think of X service?” help measure how your branding strategies are performing.
Brand Equity, Innovation and Customer Experience
The process of building and maintaining brand equity does not exist in isolation: it is linked to innovation and Customer Experience!
What I mean is that the way consumers perceive a brand is often defined by innovation.
At the same time, when it has a strong branding strategy, it gains more space for experimentation and acceptance by consumers.
In turn, each interaction shapes their perception and influences their loyalty and engagement.
Therefore, companies that prioritize Customer Experience strengthen their relationship with consumers and consolidate their place in the market.
And it’s impossible to talk about innovation and Customer Experience without mentioning Apple again!
The brand is not only a pioneer in many technologies, but also stands out in the way it presents its products and services.
The Apple device experience is often described as intuitive and elegant, which is reinforced by Apple’s stores, which are designed to maximize this experience by allowing direct interactions with its products in a welcoming environment.
Another company that stands out in these issues is Amazon:
The retail giant has revolutionized the online shopping experience with its ability to offer convenience, speed and a wide selection of products.
This care not only increased their brand equity, but also set new standards of customer service that other brands now aspire to achieve!
For companies looking to improve their brand equity, the key is to not just introduce new products or services, but to ensure that each innovation significantly improves the Customer Experience.
By doing so, brands not only meet the current needs of their consumers, but also establish themselves as visionary leaders in their respective markets!
Show the value your brand has!
We’ve reached the end of our journey on brand equity, and I hope you’ve felt inspired to look beyond the logo when thinking about the value of your brand.
Strengthening it, building emotional connections and offering good experiences to your customers needs to be part of your business strategy!
If you liked what we discussed so far and are looking to further deepen your knowledge about Marketing, Branding and many other subjects, visit the Enjoy Minder blog!
And if you want to count on all the expertise of my team to understand more about how to consolidate your brand in the market, click here and speak to an expert!
