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In our hyper-competitive digital age, brand equity is more important than ever. Switching brands is easy and customer reviews are incredibly influential. Brand equity denotes the value of a recognizable brand name, the sway that the company name has with consumers. Well-established companies with positive brand equity can charge more for their products and will have more success with business expansion.
Today, brand equity is built not just through marketing and advertising efforts, but through positive customer experiences. To retain customers long-term, businesses must prioritize the consumer, consistently delivering frictionless experiences that cater to customer needs and preferences.
The power of investing in brand equity
Brand equity is becoming increasingly important in 2022. Consumer purchase options continue to expand and rising inflation is limiting affordability in select cases. In this environment, trusted and better-known brands will greatly benefit.
Establishing trust is crucial — 80 percent of customers refuse to do business with a brand that they don’t trust. Once solidified, companies will see a significant return on investment (ROI). Businesses with positive brand equity and consumer trust often have to spend less on advertising and production than their competitors. Additionally, customers will pay a premium for products and services from businesses they know and trust, and whose values align with theirs.
To improve brand equity, it’s not enough for a company to offer high-quality products and services. Today’s consumers care about what a brand has to say, and what it stands for. Seventy-four percent of customers expect businesses to treat their customers, employees and the environment well and will make purchasing decisions based on brand values and policies.
Ensuring that brand messaging is clear, that it expresses a purpose and that it resonates with the target consumer base is key to raising revenue-driving awareness.
Building brand equity through the digital experience
As most retail and purchasing activity has moved online, much of the differentiation and brand building is now done through mobile and web channels. As a result, the digital experience has a significant impact. Delivering frictionless experiences has become mission critical — as important to brand equity growth as price and product.
Research tells us over 80 percent of consumers believe customer experience plays a central role in purchase decisions. They also believe less than 15 percent deliver a good digital experience. To build positive brand equity, brands must work to close that gap.
To reliably provide an outstanding digital experience on mobile and web, businesses must work to truly understand their customers and how they are interacting with the platforms. Powered by AI, Digital Experience Intelligence (DXI) solutions can help businesses improve digital customer journeys by capturing and analyzing 100 percent of customer interactions. Companies can use DXI-provided insights to make informed decisions about the customer journey. The business will have a full end-to-end view of what is working (and can be amplified to increase conversion) and what isn’t.
Crucially, DXI technology also alerts brands to urgent technical issues impacting customers, enabling internal teams to quickly resolve the issue without damaging brand reputation. For example, a major retailer may not realize that a product link on their site is leading customers to a 404 page not found error page. DXI tools will immediately detect the error and inform the company, which can then fix it rapidly, minimizing the impact on revenue and customer experience.
Each negative and frustrating digital experience influences brand perception and customer goodwill toward a company. Brands must proactively eliminate issues and points of friction while simultaneously creating positive brand equity through tailored, impactful customer experiences.
Leveraging customer data to differentiate
There is a great opportunity for brands to differentiate themselves through strategic improvements to the digital customer experience. One of the most effective ways to do this is to make data-driven decisions using customer data.
Increasing convenience and providing greater personalization will enhance customer loyalty and make a positive impact on brand equity. Ninety percent of customers say that when they interact with a brand online, they want a convenient experience. Approximately 80 percent report, “I would be more loyal to a brand that showed they really understood me and what I was looking for. If a brand understands me at a personal level, I’m more likely to be loyal to them.”
Customer data is essential to creating a personalized experience. Additionally, noting the role that brand values play in purchasing decisions, businesses can leverage customer data to ensure alignment in values.
How to measure it
Investing in brand equity is an ongoing process requiring consistent cultivation and measurement. Calculating brand equity can be difficult. But looking at quantitative and qualitative metrics can help businesses understand the impact of their messaging and the strength of their customer experiences.
Quantitative metrics include profit margins, price sensitivity, conversion rates, cart abandonment, growth rate, market share and repeat customer purchasing frequency. Qualitative metrics include sentiments in customer reviews, social media reactions, Voice of Customer (VoC) feedback and survey responses.
Brand equity development strategies should be adjusted regularly based on learnings and all available data.
Building relationships and awareness
At its core, building brand equity is about building relationships — with customers and with the general public. The customer journey should be looked at holistically. Businesses should strive for connection with customers through all available avenues — with an increased focus on digital channels.
In 2022, brand equity can make or break a business. To succeed, brands must understand their customers, understand the market and understand what makes their company stand out among competitors.