When it comes to being successful in business, a strong brand can make all the difference. Having a well-established presence in the marketplace often means a company can charge a premium price for its product or services, build customer loyalty, and make it more difficult for competitors to attract the same base because consumers perceive the products of well-known brand names as better than those of lesser-known ones. But what constitutes a strong brand? This is where brand equity comes into play.
Brand equity refers to the added commercial and social value that a product or service with a certain brand name has over the same product or service without the name. It comprises the consumer’s awareness of the brand, the associations they make with it, and how they perceive the quality of the brand. This added value can be positive or negative and can be influenced by factors such as brand reputation, customer loyalty, and advertising.
A company with high brand equity will have a distinguished reputation and name recognition among consumers, which can make it easier for the company to launch new products or expand into new markets. It can also serve as a valuable asset that can be sold or licensed to generate additional revenue. Essentially it’s important to have a prominent brand because it can have a significant impact on a company’s financial performance and overall success.
How to build brand equity
So now that the importance of brand equity has been established, how does one go about building it? The process of building brand equity requires a long-term, strategic approach that focuses on creating positive associations and experiences for customers. It is an ongoing effort that requires a combination of factors such as:
- Understanding the importance of brand equity and committing to building it
- Providing high-quality products or services and using consistent branding across all touchpoints
- Building loyalty through excellent customer service and gathering feedback to continually improve the brand
- Connecting with customers on an emotional level by communicating brand values and story in a way that resonates
- Developing and executing marketing strategies through effective advertising that build a positive reputation and convey the unique benefits of your brand
Though building brand equity requires effort and commitment, it can provide a valuable competitive edge and significant long-term benefits to help companies achieve ongoing success in their markets.
One of the most important factors in building brand equity is consistency. Consistent branding helps establish a clear and recognizable identity, which can increase brand recognition and recall, which can then lead to building trust in the minds of consumers. It also helps differentiate a brand from its competitors and reinforces its unique value proposition, making it easier for customers to make an emotional connection with the brand.
Given the current economic climate, consistency may be more important than ever. Customers are more cautious about spending during a recession, which can lead to decreased demand. While shutting off marketing during a recession can be a tempting cost-saving measure, it can have negative consequences for long-term business performance. When a company stops or reduces its marketing efforts, it often leads to diminished brand awareness and customer engagement, which can result in reduced customer loyalty and sales.
Consistency is key
Because it is impossible to accurately predict how long a recessionary type environment could last, it is crucial for companies to maintain their marketing efforts to maximize their brand equity. But while consistency is essential for companies during a recession, it is equally important for them to be strategic. Pulling back on certain investments means potentially ceding strategic leadership by driving the category to other competitors.
Instead, companies should consider alternative cost-saving measures, such as adjusting their marketing mix, optimizing their ad spend, or focusing on more cost-effective marketing channels. If they maintain their spend, investment, and R&D innovation through difficult periods, brands are going to find themselves in a better competitive position when the economy recovers. One way to successfully accomplish this is through the use of data and technology platforms that can offer visibility into interaction effects between channels and give marketers a holistic view of their business.
For brands to continue to operate and grow in a difficult environment, they need to continue to invest in building their business, brand, and equity. If they pull back in these areas, the potential for them to lose their spot and their competitors to claim a higher share of the market grows exponentially. Whatever their position, it’s imperative that businesses think about forward trajectory and don’t get mired in the difficulties of the present because not doing so may wind up ceding leadership to someone else. By continuing to market their brand, companies can maintain customer engagement and set themselves up for future growth when the economy improves.
How Keen can help build brand equity
We understand the importance of brand equity and how to help your organization build it. Advances in machine-learning and AI technology have made it possible—and advisable—for marketers to incorporate timing into their marketing mix planning, which can help guide decision making for brands in times of uncertainty. An inherent benefit of technology is its ability to speed things up and automate the process of doing more math and breaking analyses down into smaller units. So now, marketers have the ability to optimize their marketing mix across all channels and weeks to maximize the value generated from spend decisions and minimize the risk of veering off course.
With the industry’s first and only decision optimization engine rooted in predictive analytics, Keen empowers brand leaders to plan, adjust, and report on their marketing mix strategy faster—and with more accuracy—than a traditional marketing mix modeling approach. Informed by 40 years of academic studies, 10 years of client metadata and recent marketplace dynamics, and thousands of economic elasticity models and priors, our tool equips marketers to quickly start driving both short-term and sustainable value while simultaneously building brand equity.
So don’t fall into the trap of common knee-jerk reactions in marketing like shutting off spend or going dark during a recession, which can be harmful to a company’s reputation. Instead, Keen can offer real-time marketing insights to help you learn from what you’ve spent, pivot based on your goals, and predict the best path to maximize value, today and tomorrow.
Interested to learn more? Request a demo model.