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We live in a world where brands are becoming household names. You can learn things on Google and make your photos higher (or worse) in Photoshop and don’t even start with the infamous Netflix and calm down. If you desire to change into the next Sharpie or Kleenex, you could build your brand equity early.
Before we say “why”, let’s look at “what”. Brand equity is a somewhat elusive measure of your brand’s recognition, trust and value. However, despite its ephemeral nature, it has a direct impact on sales, identical to consistent branding increase your revenues by 23%.
You can use many metrics to measure brand equity, including brand awareness, associations and loyalty, customer lifetime value (CLV), marketing ROI, and even overall audience sentiment.
With the semantics out of the way, let’s explore six reasons to extend brand equity early.
1. Establishes recognition and differentiation
Unless you have been living under a rock, you have probably heard of Coca-Cola, the mastodon of the soft drink that is not only ingrained in our on a regular basis lives, but has even change into an unofficial symbol of Christmas. It is easily recognizable, might be found on Google, and has an overall good status.
Compare this to something like DRY which boasts 18% recognition in its homeland, the USA, and is not present elsewhere. It’s challenging to seek out on Google resulting from its name and the existence of Canada Dry, a root beer brand from 120 years ago (still alive and kicking). It could also be a good product, but it’s fighting an uphill battle against its own brand.
No matter how good your product is, 59% of people Instead of trying unknown brands, they’ll select something they know, so creating a unique product is not enough – you furthermore may have to make it stand out from the competition.
2. Builds trust
However, recognition alone is not enough – although everyone knows them, you do not see people lining up to purchase the latest ISIS summer collection.
While word of mouth is essential to getting your first sale, your commitment to maintaining the trust you have established will earn you continued patronage. 67% of customers acknowledge that a good status will encourage them to try your product. But they will not proceed to make use of it if you do not earn their trust.
3. Increases brand value
While a brand’s value is typically calculated based on specific metrics, equivalent to the value of its assets, some more ephemeral metrics, equivalent to brand equity, significantly impact its cost.
Building positive brand equity is a long-term process. As Warren Buffett said, “No matter how great your talent or effort, some things just take time. You cannot have a baby in a month by impregnating nine women.”
Spending extra money on marketing doesn’t guarantee fast sensation. Moreover, in many cases, bands with limited marketing budgets, equivalent to Cards Against Humanity and Dollar Shave Club, managed to achieve popularity almost overnight. So the earlier you begin investing in marketing, the higher your probabilities are of breaking through the noise.
4. Mandates higher prices
Conversely, if you desire to profit from your established brand, high equity lets you command a higher price for your products or services. Customers wouldn’t decide to pay more for a product of noticeably higher quality.
The incredible capital allows Balenciaga to sell seemingly pointless products equivalent to Garbage bags price $1,850 Or $4,400 price of ribbon bracelets (along with shock value and viral PR, but that is not the point).
5. Reduces marketing costs
Ok, bear with me on this. Growing a brand from scratch takes a lot of time, money and creativity, period. However, once you get began, you will start seeing higher returns on your marketing efforts.
It occupies the customer on average eight touches (this number may vary by industry) with your brand to make a purchase, which implies they should hear or see your ads eight times before they really make a purchase. However, user-generated content helps reduce this number and is, in a sense, free “taps”.
The math is easy: the fewer contacts it takes for a customer to convert, the fewer resources you have to spend, even if the initial investment is huge.
6. Increases crisis resilience
Crisis resistance works in two directions.
On the one hand, when your brand is facing a crisis, good capital will provide help to stay in business because you’ll have a stable flow of loyal customers.
On the other hand, when the crisis is more global and affects customers’ purchasing power, positive equity will make you a prime candidate to purchase. After all, why should people try something recent when they know your brand offers high-quality products at good prices?
Naturally, the way crises affect different industries varies greatly. For example, Chanel has not been affected by either the recession or the Covid-19 pandemic, demonstrating revenue increase by 23%.
Application
Building brand value is a long-term process. Ultimately, the sooner you begin building trust, loyalty and recognition among your customers, the higher. An established brand brings in more revenue, has a greater competitive advantage, and can weather any storm, making it easier to run what you are promoting and experiment with recent tactics.