Running a business means getting to grip with lots of specialised terminology you may not have been familiar with before: your expertise is in running your business, in managing your team, in the industry or niche you occupy, not in market research, branding or demographics.
Fortunately, there is no shortage of experts who can provide the specialised insight you need in the areas where your own understanding is lacking, but it means learning enough to make constructive use of their input, and also to recognise whether or not it can help. If a market research firm offers access to their brand index to tell you about your brand equity, is that a service worth paying for?
Today we’re taking a look at the concept of brand equity to help give you the understanding you need to make the right decisions when you’re working with more experienced professionals.
What Does It Mean?
Brand Equity is a measure of the value your brand has as a commercial force: how significant is your name as a factor in persuading consumers to part with their money, rather than price, for example.
Your brand is essentially how customers think of your company: it’s the personality or image they assign to it built up from every interaction they have with your company, from explicit advertising, to news reporting, to word of mouth recommendations and warnings from friends. When your brand is doing what you want it to, it acts as a big sign, telling customers the way to your products, and that you are the right choice for them.
A high brand equity means your brand is a good fit for your business – that all of the tiny decisions that go into building a brand are pulling in the same direction. If your brand isn’t a significant factor in people’s decisions to spend their money, then something is going wrong and you need to know about!
Finding Your Brand Equity
Finding this key measure of your business’ success is important, but how can you do it? One of the ways is to look for a market research agency to place you within a brand index. This is essentially a ranking of brands in your industry combining several key metrics: unprompted recall (which is to say, when asked to name brands in your niche, do customers think of you?), their likelihood to recommend your brand to others (‘net promoter score’) and how likely they are to purchase your brand specifically.
Placing your brand in a hierarchy using these metrics shows you how you’re performing, and over time it shows your progress. Has your brand built up a lot of momentum? Is it stagnating and in need of change?
It is insights like this that drive successful decisions for your company, and you can ill afford to do without them!