What is brand equity? And 7 ways to build it
This article was brought to us by community member José Pablo, founder of MK+2. He helps brands with branding, strategic projects, and social media campaigns - find him on twitter here.
We all know how competitive the market is today; pop down to wholefoods and you’ll be taken aback by the countless mineral waters with spectacular branding. While some will become iconic brands, others will become obsolete. Brand equity plays a major role in determining which brand will succeed.
So what exactly is brand equity?
Brand equity is the difference between the actual price of the product and the perceived value that consumers place on it. The product’s actual price is what you pay for it; its perceived value is what consumers believe they get in return for their money.
Ultimately, brand equity gives you the power to charge more than the competition while making consumers feel good about paying the price. It’s a win-win: Consumers feel connected to you, and you benefit financially from better economics.
A great real-world example is purchasing a Le Creuset cooking pot ($230), vs. a more generic alternative like this beautiful pot from Misen ($165). Both cooking pots are quite comparable, from a performance and design standpoint - but the Le Creuset one is priced 40% higher than the Misen one. That 40% difference is the value of brand equity here.
Here are 7 ways to Build Brand Equity:
- Align to a bigger mission:
If you want to build brand equity, you can’t just be out there chasing profits. Brands with missions naturally think bigger. They transcend more boundaries - which enables a faster spread of your brand. Madhappy does this really well with mental health.
- Offer unparalleled customer service:
Bezos still attributes most of his success to unparalleled customer success. That consistent, outstanding customer experience is the foundation of the brand equity of Amazon. I read a piece from Patrick Pittaluga, founder of Grubbly Farms which highlights how he does this.
- Build and engage with a community:
Don’t focus on having thousands and thousands of followers. Focus on having the right followers who are just as passionate about your brand’s mission as you are. It’s about quality, not quantity. That community edge can be the single driver of brand equity. Just ask Ash, founder of Obvi and their community of 40,000.
- Pick a brand tone and stay consistent with it:
Make sure your brand is consistent with its messaging. Take the time to define in-depth the tone and personality of your brand. And stay true to this. Darn Good Yarn does this very well. They only talk about great yarn…. That’s it!
- Form a powerful visual identity.
A great place to start building brand equity is with a striking identity. Us humans enjoy eye-catching new products. The visual identity alone won’t be enough to build real brand equity, however it’s one of the most obvious ways to start. Graza just recently launched a cooking oil and it’s a perfect example of a powerful visual identity.
- Make good content.
Content is your opportunity to express all the subtleties of your brand in a more “always on” basis. Take inspiration from the content from Athletic Greens: Simple, inspiring content designed to help you improve existing habits (or create new ones).
- Select distribution channels carefully.
Sell in the right places that make sense for your brand as this can dilute or increase your brand equity. You basically want to sell where everywhere your target audience hangs out at. The more you select places that are exclusively to your target audience - the more you’ll build brand equity. Bomani, the coffee-infused alcoholic drink does this masterfully.
Building a brand is tough! It’s a very long road to success, and there is no shortcut. Keep
working hard, stay true to your brand values, and make sure to learn from your mistakes.
I hope you enjoyed my first article on 1-800-D2C. I’m excited to contribute to a publication that has consistently delivered value to me and the D2C community. Feel free to follow me on Twitter and Instagram where I share tips on building a brand!
-Jose from MK+2