As a CMO of any company, establishing brand equity is important because it leads to a supply of loyal customers and helps develop a company’s personality. As a graduate student at Northwestern’s Medill Integrated Marketing Communications program, I have found this topic very insightful and I would like to draw your attention to the following two articles that summarize the importance of brand equity and the ultimate goal of brand loyalty.
The article by Scott Cullather, “The Importance of Brand Equity and How to Maintain it”, focuses on the value of brand equity and the ultimate drive to customer loyalty. The development of brand equity is important as it allows companies to more effectively engage with their customers in ways that drive brand loyalty, allowing the business to grow. Brand equity is particularly important to start-ups because it helps them define themselves and their core values as well as steer the company in the appropriate direction towards profitability. Start-ups also have an advantage, as they have the ability to figure out particularly who they would like to target at an early stage and leverage their customer base accordingly. This helps them figure out their own niche and maintain a competitive advantage. The structure of brand equity from an internal company’s standpoint is also very critical, as it can affect the outward brand appeal. As the business becomes comfortable with its customer base, it is easy for it to lose sight of its core values and therefore affect the internal culture of the company, which in turn, reflects the brand positioning and could eventually lead to problems retaining customers.
The article by Jennifer Taylor, “The Importance of Brand
Equity for your Business”, discusses the importance of building a brand
personality through brand equity so that the customer base recognizes the
product and product sales lead to profitability in the long run. It is crucial the brand or product is unique
in some fashion and can be differentiated from its competitors. The ultimate goal of the company is to
provide value to the customers through emotional ties and passion. These emotions lead to sales and lower price
sensitivity, which lead to customer loyalty. Finally, brand equity is the value of the
brand that you have created; strong brand equity can lead to higher profit
margins and customer retention.
Based on my review of these two articles and my
graduate work in the Northwestern Medill IMC program, there are three things
you should know to achieve high brand equity:
1. Figure
out who you would like to target- You can’t target everyone at once, your
company needs a market to focus on and adjust to.
2. Turn the customer into a loyal buyer- Make sure
your brand is unique enough to be differentiated by the consumer.
3. Establish
and maintain core brand values internally and externally to create a brand
personality- although external values are important, if the company employees
don’t retain these values in an internal setting, this will eventually be
visible to the consumer through external branding and can lead to diminishing
customer retention.
In the ever changing business
world knowing your customer, staying one step ahead of the competition and
developing a brand personality can help you maintain a competitive edge and
ultimately create brand loyalty.
Sources:
Image- http://growthweaver.com/brand-equity-and-social-media/
Marina Goldshteyn is pursuing a Masters degree in Integrated Marketing Communications (IMC) at Northwestern University. She currently works as a Sr. Marketing Acquisition Associate at Discover Financial Services. She hopes to continue her professional career post graduation to focus on brand strategy and execution.
Continue the conversation via Twitter @MarinaGoldshte1 or via LinkedIn.
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