Brand equity is commonly used in the marketing world to describe the weight a brand holds in the minds of its consumers.
Those with high levels of equity are likely to benefit from customer loyalty, heightened awareness and commercial success and those with low levels of equity…the opposite.
But as marketing, and the way in which people interact with the brands in their ecosystem, becomes more evolved each day, we must question how we’re measuring the growth of brands, and whether equity itself is becoming an outdated measurement.
Tell me more about Brand Equity
Traditionally, equity has been tied to brand loyalty. If a company has strong brand equity, it means its customers are more likely to buy the product or service they are selling.
Brand equity develops through a customer’s experiences with a brand, and it can encompass many different elements, such as:
Awareness – Is the brand memorable?
Recognition – Are customers familiar with the brand?
Trial – How many customers are trying the brand?
Preference – Is the product a customer’s preferred choice?
Loyalty – Will the customer recommend the brand to others?
It’s hard to define equity simply, as the concept of ‘value’ is such a tenuous term, and can amount to so many different things.
Three main problems with equity are how it’s calculated, defined, and used.
It’s a static figure that’s collected via backward-facing measures, like surveys. And is incapable of showing how your brand is improving or declining over time. Brands will receive an equity stat on a monthly, quarterly or yearly basis but won’t be able to see how their brand has performed during these time periods, making it difficult to understand which marketing actions are having the most significant impact on their equity scores – and making it even harder to action this data.
Is Brand Equity still relevant?
Simply put, yes.
Brand equity (as a concept) isn’t redundant. Knowing the value of your brand is still relevant and essential for those looking to build a trusted and established brand. But it’s in definite need of a makeover to bring it into the 21st century.
If you’re thinking about the value of your brand, what’s more valuable than its relationships? At ProQuo AI, we believe relationships are all about social exchange. The relationships you value will always be the ones where you get more than you give.
With so many brands offering pretty much identical products, what distinguishes one brand from another? It’s not functionality or anything rational. It’s how you feel about the brand. Take airplanes. They’re all virtually the same – flying the same model of plane, providing a similar quality of service onboard, and travelling via similar routes. But if we were to ask you whether you’d prefer to fly Emirates or Ryanair, I’m sure you’d have a preference. And that’s because of the way the brand’s made you feel. Clearly, value is defined by more than just figures on a page, but by a brand’s ability to evoke an emotional response in its customers.
We’ve establishedthat relationships are the way forward when it comes to forging value. So, what can you do to maximize these relationships?
You can build your brand relationships in many different ways. But why not make it simple for yourself? With ProQuo’s AI platform, you’ll be able to grow your relationships with ease. Think of the platform like a GPS system for marketing. It will help you to know what to do to reach your goals, will ensure your creative assets are the best they can be to get you to these goals and will measure the success of your actions along the way, so you’re constantly improving on what you’ve done before.
And the best part? It takes into account how customers feel and think about your brand. A ‘ProQuo Score’ is given to every user of the platform to summarize the strength of that brand’s relationship with its consumers. This score is calculated through real-time analysis and is based on the proven framework, the 16 Drivers of Relationships.
With ProQuo AI, you’ll be able to increase your value and grow your relationships – but the key difference between ProQuo and Brand equity is that you’ll know exactly how you get there and what to do with that information.
What creates equity is the actions you take on your brand. But historically these actions were blind, as Brand Managers didn’t have access to always-on data and the data they had was gathered via backwards-facing techniques. Now you can get to your end-goals more confidently and efficiently by taking daily actions (found through ProQuo) that are sure to lead to growth.