Strong brand equity is every brand’s goal. Because consumers purchase their products regardless of price and features. These companies are well-known, offer satisfying customer experiences, and create brand recognition that appeals to consumers' values. They fulfill their promises. Is your company's name the first thing that people think of when buying a phone? Or a laptop?
A brand that prioritizes the needs and wants of its customers places the customer at the center of its operations by using consumer insights and understanding what they want.
According to McKinsey's "Next in Personalization 2021" research, businesses that thrive at showing client intimacy grow their revenue more quickly than their competitors.
As per this report:
- 71% of customers want businesses to provide personalized experiences
- 76% become upset when they don't.
Also, 76% of consumers indicated they are more inclined to purchase from a company that provides a personalized experience.
Customers are loyal to brands that show a deep understanding of them since this shows them that the business cares about them more than just at a transactional level. That individual understanding is intimately related to brand equity in the experience economy. Establish and uphold trust, and brand equity will follow. The brands with the most dedicated followings will emerge as winners.
What Is Brand Equity and Why Does It Matter?
Brand equity is the worth of having a distinctive and well-recognized brand and the influence a brand name has over consumers' minds. Businesses create brand equity by offering customers satisfying experiences that encourage them to stick with them instead of switching to competitors who provide comparable goods.
Customers are more likely to buy a brand they are familiar with and confident in. The idea of brand equity makes use of this propensity for customer behavior to increase profitable sales over time.
Global brands have their own tribes, notably Tesla, Nike, and Apple, to mention a few. When new products are produced, tribe members are frequently so captivated by the brand that they will be among the first to buy them.
Why, then, do they walk into the light so blatantly? They would have to go a long way to undermine that trust because these people have implicit faith in those brands. So, combining great customer experience, perception, and opinion of a brand leads to great brand equity.
In other words, brand equity is an organization's value when the public perceives it favorably and with strength. This creates:
- A competitive environment where the strongest brand wins.
- Increased sales and profits from people who pick your brand over rivals, even if it costs more to purchase.
- A stronger grip on customers at upcoming purchasing opportunities since higher brand equity increases goodwill and brand awareness.
Although building brand equity has clear advantages, developing and sustaining it takes a lot of time and effort. Finding out what your target market values and needs are the first step in determining what makes your brand distinctive. As your business expands, you must continue raising awareness to attract new clients while retaining your current clientele.
The "why" of businesses like Apple and Hermès is evident if you look closely at them. It clarifies their marketing strategy, focusing mostly on their brand as a whole rather than a single product. Because consumers adore these businesses for who they are, they can grow their product ranges indefinitely. So, qualitative techniques can help you find your "whys" and capitalize on them, measuring your brand equity.
6 Qualitative Techniques to Measure Brand Equity
Every time a new product or service is introduced, even the most well-known firms take the time to test how consumers react to their marketing. Every change should be tested to discover how the audience responds, what they like or dislike, and whether their needs are met. The messaging and creative components should be developed based on statistics and what appeals to your customers.
1. Brand Awareness
Brand awareness measures how well your company is known by key stakeholders, the market, and your target audience. While 46% of consumers prefer to purchase from prominent names, 77% of people speak using brand names rather than the names of actual products.
"Listen to what customers are saying, and more importantly, what they aren't. You can capture great insight from feedback, social media noise, or complaints, but you can build a much stronger understanding of your experience if your journey map (walk in your customer's shoes) and use your data," says Katie Stabler, Founder, and Director of Customer Experience CULTIVATE Customer Experience by Design, in Clootrack’s CX report.
As brand awareness is a dynamic metric, it can be assessed by asking questions like:
- Future purchase intentions of a customer.
- Present and long-term brand awareness of a customer.
- The target customers' purchasing patterns.
- How much time do customers spend discussing your brand in casual discussions, or how much "conversation share" there is.
Useful key methodologies include:
- Focus groups, study panels, or polls of consumers' perceptions of brands
- sales data
- Customer feedback channels include leveraging comments and mentions on social media
- Website traffic for your brand
One of the best ways to gauge brand awareness is through surveys. Simply choose your target audience or the individuals you want to know the most about your brand, and ask away. Your best choice for assessing brand awareness is to conduct online surveys of all consumers rather than just your current clientele.
2. Brand Sentiment and Strength
Brand sentiment is the underlying feeling that underlies any mention of your company. In consumer comments, brands can convey positive, negative, or neutral attitudes. On the other side, brand power, or strength, may be assessed using emotional data. This refers to a brand's unique value acquired in a person's mind due to numerous interactions over time.
Customer surveys that ask a series of evaluative questions to gauge the relative preference, or "wantability," the consumer has for the brand can be used to get this information.
47% of customers who have a product or service complaint will express it on social media, according to Sprout Social. Learn what customers are saying on social media soon after a new product launch. Or search through years' worth of reactions you might not have noticed. You can search for specific terms relating to a new product or feature to obtain only the information you require.
You'll be able to track the everyday sentiment of your brand using machine learning and focused sentiment analysis. You may monitor the evolution of your public's view as it rises (or declines) over time. Machine learning analysis is considerably superior to human analysis as machines don't change their criteria.
3. Competitive Analysis
The actions of your competitors will affect your brand, whether they are performing poorly or giving you a run for your money by developing effective marketing efforts. If the competing brands are succeeding, you'll observe variations in:
- Comparing your acquisition rate to their rates
- Your position as the industry leader, as measured by sales, social media engagement, and following
- revenue obtained from specific channels that are utilized by rivals
You can monitor the performance of your brand equity in a competitive market, but you should focus on competitor analysis to assess their strengths and weaknesses and how their brand stacks up against yours.
4. Brand Relevance
This relates to customer satisfaction but focuses on whether your target audience believes your brand offers special value. You can gauge this in several ways, such as:
- You can learn more about your customers' happiness levels with your brands, products, services, or experiences by conducting customer satisfaction (CSAT) surveys.
- The emotional bond between a client and a brand can be shown by a Net Promoter Score (NPS), which is a major factor in boosting brand loyalty.
- Conjoint Analysis, a statistical method based on survey data, is used to uncover major consumer decision-making processes and the importance consumers place on brand aspects.
As the brand is seen as more valuable and relevant to a target market or serves a particular purpose, this might raise your brand equity level.
5. Consumer Behavior
You can acquire valuable insights into consumer preferences and purchasing behavior by measuring consumer behavior and getting to know your customers on a deeper level. Consumer behavior can be measured in a variety of ways.
- Measure consumer preferences and behavior using facial expressions
- Monitoring consumer behavior
- Observing consumer behavior in a real-world setting
- Neuromarketing research
"The main challenge is really getting meaningful insights from feedback and behavior from customers. The amount of data, text, etc., require additional tools and technology to make sure insights are extracted. It's still a challenge to standardize tools and apply them efficiently," Susanna Baque, Senior Director Global Customer Experience, SCIEX, as stated in Clootrack’s report.
You must pay close attention to your consumers' behavior to comprehend how they decide what to buy. To find out what factors your customers consider while making decisions, you can conduct both written and spoken surveys. Additionally, you can learn if they make their purchasing selections at a particular period of the year, give certain aspects a given level of significance, etc.
6. Brand Personality and Values
"What is the "best CX"? There are only two ways to be in the market: price or differentiation. Price leads to ruin for all the players, so how do you differentiate? By being yourself. You have to understand your purpose, why you exist, and your values and show all very clearly in your communications, your behavior, the causes you publicly support. So the people who could resonate with you, can find you and start a relationship with you. If you are real and true, that relationship will have an economic reward," Sonia Etxebarria, Customer Experience Strategy | Market/offering innovation, Gowi, as per the Clootrack CX report.
Brand personality is another set of useful metrics for building brand equity. The human qualities or attributes that can be connected to a brand are its "brand personality." There are various ways to gauge a brand's personality.
Asking open-ended questions to a consumer like: "If the brand were to come to life as a human, what would it be like, what would it do, where would it stay, what would it wear, who would it converse to if it went out to dinner (and what would it talk about)," may be the most straightforward method.
Or, you might invite customers to put together a profile of the brand from a collection of images or a stack of magazines. These images might show famous people or something else entirely. Accordingly, advertising companies frequently carry out "picture sorting" research to determine a brand's typical users.
Zaltman Metaphor Elicitation Technique (ZMET) asks study participants to snap photos and/or collect images (from publications like magazines, books, newspapers, or other sources) and then utilize these images to express how the brand represents different things to them.
The Key Takeaways
Brands are no longer characterized by how they present themselves in advertisements because of the growth of social media and the capacity to express opinions and share experiences online. What consumers have to say about a brand defines it. You can reap the rewards and build your brand equity if you place the consumer at the heart of everything you do.
When you identify the "why," you can appeal to people's desires and concerns to win them over. The strength of qualitative research is that. You must begin by listening to tell your greatest, most powerful narrative.
Read More: What is the Brand Equity Model?