Branding, Digital, Guidance, Help & Advice, Identity, Marketing

The Tangible Value or ‘Equity’ of Your Brand.

There are few business and industry sectors that love a buzzword more than marketing and advertising and among the swarms of them we bandy about, brand equity buzzes more than most.

It’s a concept we all talk about – but we have a sneaking suspicion that sometimes not everyone really understands its meaning. So what, exactly, do we mean by ‘Brand Equity?

Well, basically, it’s the difference between what a consumer’s willing to pay for a recognisable name product and what they’ll pay for a generic equivalent. That difference could be marginal or it could be huge – think of the almost ludicrous difference in price between branded OTC pharmaceutical products such as antihistamine tablets (£5 plus) and their generic equivalent (under £1) for example. So, if your brand has positive brand equity, your customers are happy to pay a considerably higher price despite the fact that they can get almost exactly the same thing from a competitor for less! It is, of course, possible that the opposite applies and your brand equity is in the negative – which is a depressing state of affairs if you’ve invested heavily in it!

That great reputation is what reassures new customers and keeps existing ones coming back for more

On the brighter side, the great thing is that the expenses incurred by a company with positive brand equity are no higher than those of its competitors so the difference in price they attract is a massive boost to their margin. 

In short, positive brand equity means you make a greater profit on each sale. Even more so when you consider that you can often reduce your marketing budget once your brand’s achieved the right level of trust and admiration!

But how do you achieve that? It is commonly – but often wrongly – assumed that it’s all to do with the sheer weight of marketing activity thrown behind the brand. And it’s true enough that a hefty investment right across the marketing mix, and perhaps especially in advertising and sales promotion, can reap rewards in the form of a high level of brand recognition – but while that’s a major part of brand equity it’s important to remember it’s not the whole thing!

The other, equally vital, element is goodwill – the intangible but no less valuable trust people place in the brand; trust that the product or service will deliver on its promise each and every time. That great reputation is what reassures new customers and keeps existing ones coming back for more. It’s the Apple effect – the quality and trust that inspire people to queue up around the block and order new products long in advance even though they’re significantly more expensive than the competition’s equivalents. And when you have Apple’s enormous level of positive brand equity, you can count on higher sales volumes and, because production costs are no higher than those of low-priced competitive products, far greater margins.

If you’re fortunate – and/or diligent – enough to enjoy a high degree of positive brand equity it doesn’t mean you can afford to be complacent, though. The nightmare scenario of deeply negative brand equity can affect the greatest, most trustworthy and reliable of brands. A major product recall, especially one caused by disreputable behavior such as Volkswagen’s misrepresentation of its diesel products’ emissions levels or BP’s environmental disasters, can make a nasty dent in your gleaming reputation and by extension your brand equity.

To sum up, brand equity’s not something you gain by accident. It takes effort and investment to achieve and once achieved it’s a precious asset to be nurtured and treasured.  Handle it with care! Great branding takes time and dedication and within the right hands, it can evaluate your business above your competitors. Take a look at our logofolio where we have a mix of clients who are based in Hertfordshire and beyond.


Journal Home