Introduction
In the complex world of business, understanding how your brand is perceived by customers and prospects is not just a metric; it's a strategic imperative known as brand equity. It is influenced by factors such as your brand awareness, recognition, reputation, loyalty, and differentiation. It is important because it can affect your customer behaviour, satisfaction, retention, and advocacy, as well as your market share, profitability, and growth.
However, brand equity is not a static or fixed concept. It can change over time depending on your brand performance, customer feedback, market trends, and competitive actions. Therefore, it is essential to measure and improve your brand equity on a regular basis to ensure that your brand remains relevant, attractive, and competitive in your industry.
Essential Metrics and Indicators for Evaluating Brand Equity.
There are various ways to measure it, but they can be broadly categorized into two types: operational data (O data) and experience data (X data). Operational data refers to the quantitative and objective data that reflects your brand performance, such as sales, revenue, market share, and profitability. Experience data refers to the qualitative and subjective data that reflects your customer perception, preference, and sentiment, such as awareness, relevance, loyalty, and advocacy. To boost your brand, you need to blend both data types and a whole and even set of measures and signs. These measures and signs should involve these parts of your brand.
- Brand awareness: This metric measures how familiar your target audience is with your brand and how easily they can recall or recognize it. You can measure it by conducting surveys, website analytics, and social media metrics. Some examples of brand awareness indicators are spontaneous and prompted recall, recognition, reach, impressions, and followers.
- Brand relevance: This metric measures how well your brand meets the needs and expectations of your target audience and how strongly they prefer it over your competitors. You can measure it by conducting customer surveys, market research, and competitive analysis. Some examples of brand relevance indicators are consideration, preference, usage, satisfaction, and Net Promoter Score (NPS).
- Brand differentiation: This metric measures how unique and distinctive your brand is compared to your competitors and how clearly you communicate your unique selling proposition (USP) and value proposition to your target audience. You can measure it by conducting customer surveys, market research, and competitive analysis. Some examples of brand differentiation indicators are brand personality, brand associations, brand attributes, and brand positioning.
- Brand loyalty: This metric measures how loyal and committed your customers are to your brand and how likely they are to repeat purchase, recommend, and advocate for your brand. You can measure it by conducting customer surveys, loyalty programs, and referral programs. Some examples of brand loyalty indicators are retention, lifetime value, referral rate, and advocacy rate.
- Brand value: This metric measures the financial value and impact of your brand on your business performance and growth. You can measure it by conducting financial analysis, valuation methods, and market research. Some examples of brand value indicators are revenue, profit, market share, return on investment (ROI), and brand valuation.
How to utilize these metrics and indicators to strengthen your brand equity?
These metrics and indicators require more than just measurement. You also need to use the insights and data to improve your brand equity and achieve your goals. Here are some steps on how to use these metrics and indicators to boost your product or service appeal and impact.
- Set clear and specific brand goals: Before you start measuring and improving your brand equity, you need to have a clear and specific vision of what you want to attain with your brand and how you want to place it in the market. You need to define your purpose, vision, mission, values, personality, and promise, and align them with your business goals and customer needs.
- Choose the right metrics and indicators: Depending on your goals, you need to choose the right metrics and indicators that are relevant, reliable, and actionable for your brand. You need to select the metrics and indicators that reflect your brand performance, customer perception, and market reality, and that can help you track your progress and identify your strengths and weaknesses.
- Collect and analyse data: Once you have chosen your metrics and indicators, you need to collect and analyse data from various sources, such as customer surveys, website analytics, social media analytics, market research, financial reports, and more. You need to use a combination of O data and X data to get a holistic and balanced view of your brand equity. You also need to use tools and methods that can help you process and visualize the data, such as dashboards, charts, graphs, and reports.
- Benchmark and compare data: To measure and improve, you need to benchmark and compare your data against your own historical data, your competitors’ data, and your industry standards. You need to see how your brand equity has changed over time, how it compares to your competitors, and how it performs in your industry. You also need to identify the gaps and opportunities for improvement and growth.
- Take action and optimize your brand strategy: Based on the data and insights, you need to take action and optimize your strategy to improve your brand equity and achieve your goals. You need to implement the changes and improvements that can enhance your brand awareness, relevance, differentiation, loyalty, and value. You also need to monitor and evaluate the results and impact of your actions and optimize your brand strategy accordingly.
Navigating Challenges in Building and Sustaining Brand Equity.
Building and maintaining brand equity is not an easy task. It requires constant attention, evaluation, and improvement to stay relevant and competitive in the ever-changing market. However, there are many potential challenges and risks that you may face when building and maintaining brand equity, such as:
- Changing customer preferences: Customers’ needs, preferences, and expectations may change over time due to various factors, such as new trends, technologies, lifestyles, and values. This may affect how they perceive and relate to your brand and its offerings. For example, Kodak, a leading brand in the photography industry, failed to adapt to the digital revolution and lost its relevance and loyalty.
- Evolving market trends: Market trends may change due to various factors, such as economic conditions, social movements, environmental issues, and consumer behaviour. This may affect the demand and supply of your products or services and the competitive landscape of your industry. For example, Blockbuster, a dominant brand in the video rental industry, failed to keep up with the online streaming trend and lost its brand value and market share.
- Emerging competitors: Competitors may emerge or enter your market with new or improved products or services that offer better quality, features, price, or value proposition than your brand. This may affect your brand differentiation and positioning and reduce your competitive advantage. For example, Nokia, a leading brand in the mobile phone industry, failed to compete with the smartphone innovation and lost its brand recognition and leadership.
- Negative publicity: Negative publicity may arise due to various factors, such as product failures, scandals, lawsuits, controversies, or crises. This may affect your brand reputation and credibility and result in negative word-of-mouth and reviews. For example, Volkswagen, a reputable brand in the automotive industry, faced a huge backlash and loss of trust after the emissions cheating scandal.
To keep your brand strong and positive, you need to check your performance and customer feedback often and use the information to make your brand strategy better. You also need to be ready, flexible, and creative in dealing with the changes in the market and customer needs. You also need to be honest, real, and careful in managing your brand reputation and image. By doing so, you can build and keep a strong and positive brand value that can help you achieve your business goals.
Conclusion.
Brand equity is a vital asset for any business that wants to succeed and grow in the competitive market. It can affect your customer behaviour, satisfaction, retention, and advocacy, as well as your market share, profitability, and growth. Therefore, it is essential to measure and improve your brand equity on a regular basis to ensure that it remains relevant, attractive, and competitive in your industry.
To measure and improve your brand equity effectively, you need to use a comprehensive and balanced set of metrics and indicators that cover the aspects of brand awareness, relevance, differentiation, loyalty, and value. You also need to use a combination of O data and X data to get a holistic and balanced view of your brand equity. You also need to use the data and insights to optimize your strategy and achieve your goals.
By measuring and improving your brand equity, you can design a brand that works for you and your customers.
