Building Brand Value that Connects with Customers
Companies and organizations spend millions on creating marketing campaigns that are designed to build a positive brand image, a better connect with the audience and improve brand recall value. These brand-building activities may not have an immediate pay-off but their returns are more valuable than short-term gains. These strategies help to improve the brand’s value which is by far the most important asset of a company.
What is Brand Value and Why Does It Matter?
In simple terms, brand value refers to the financial worth of your brand. It is your brand’s estimated worth on a balance sheet. A brand is an intangible asset of a company and brand value helps in understanding a brand’s standing in the market in comparison with its competitors. It helps to understand how much the company’s cash inflow is derived from the brand. Linking brand value to a brand’s financial standing can give deeper insights into the brand, its market positioning and helps to make calculated and informed business decisions.
Important Elements of Brand Value
- Brand Awareness – Brand value is determined by the degree of awareness the consumers have about the brand. Have your audience ever of your brand’s existence? Are they at least vaguely familiar with the brand? These are important questions that determine a brand’s value. The more the customers are aware of the brand and can easily distinguish it from its competitor, the better. Ideally, marketers strive to create a top-of-the-mind brand recall that makes the brand synonymous with the product category like the brands Jet Ski or Jacuzzi, both have become so synonymous with their products that most people call a personal watercraft Jet Ski and a hot tub a Jacuzzi.
- Brand Perception – Brand perception refers to how the customers perceive a particular brand. The customer’s perception of the brand is a very important factor that has a massive impact on the overall brand value. Brand perception itself depends on various factors such as the customer’s view or opinion about your product quality, branding, customer support, quality and the degree of customer engagement. These components influence a customer’s perception of the brand which indirectly impacts the brand value.
- Brand Association – The attributes a customer associates with a particular brand refers to as brand association. With time, customers start ascribing qualities to a particular brand, it could be durability, affordability or other attributes. For example, Apple is often associated with innovation, Rolls Royce is aspirational whereas Target is often associated with affordability. These attributes not only distinguish the brand from its competitor but also help to significantly improve brand value.
- Brand Loyalty – Among the most important elements of brand value is brand loyalty. Brand loyalty refers to a customer’s positive association with a brand for a prolonged period of time and the customer’s inclination to choose the brand repeatedly over its competitor. The main goal of marketers and brands around the world is to build a base of loyal customers that not only repeatedly purchase from the brand but also positively influence their network. A loyal base of customers acts as brand representatives and is undeterred by the growing competition or even minor price inflations. They can prove to be a great asset to the brand, significantly increasing brand value and setting the brand apart from its competitors.
Assessing Brand Value
Listed below are four approaches to evaluating or assessing brand value.
- Market-Based Valuation – This method evaluates brand value based on the brand’s standing in the current market conditions. It assesses the brand’s position in comparison with its competitors. It also takes into consideration company stock and brand performance.
- Cost-Based Valuation – This evaluates the cost incurred during brand-building activities from the beginning to the present. It includes various costs such as branding, advertising, BTL and ATL marketing activities, brand promotions, employees’ salaries, vendors, agencies, etc. In comparison with the cost incurred the profit must be higher in order to get a better brand value estimation.
- Income-Based Valuation – This evaluation is based on the income generated by the brand at present. It aggregates all means of income to the company from various sources. Although it is difficult to get an exact number the income-based valuation offers a better understanding of the overall brand value.
- Customer-Based Valuation – Customers are not only an asset and but also help to assess a company’s growth and brand value. This is the assessment of the number of customers the brand has. It includes customer projections, customer lifetime value, retained customers and acquired customers.
10 Ways to Build Brand Value That Helps You To Connect With Your Customers
- Discover Your Core Brand Values – The first step is to analyze and know what your brand stands for. In order to attract the customer base, your brand needs to stand for something and have a clear brand message. Evaluate your brand, your product, branding and market it accordingly. Emphasize the values your brand projects, it will help you to create a distinct brand identity and positively impact your brand value in the long run.
- Create an Image That Resonates With Your Audience – Connecting with your audience is a very important step, this is why brands spend millions on customer engagement strategies. Once you have identified your target group, invest in learning about your audience, their preferences, likes and dislikes. Based on the data you can work on creating a brand image that your audience identifies with and feels proud to be associated with.
- Leverage on Your USP – Every product has a unique selling point and consequently so does a brand. Understand your USP and know what sets you apart from your competitors. Work on offering your audience something that no brand in your product category does. Your USP can be your big-ticket to boosting your brand value.
- Create an Inimitable Brand Voice – More often than not, brands fail to succeed despite the superior quality of their products. The market is saturated with a zillion products, it is a constant struggle to make a brand stand out. This is why it is important that you have a unique voice. Customers often remember brands that have a catchy tagline or brands that use offbeat means to reach out to them. The way you approach and engage your customers says a lot about your brand. Customer engagement is one of the prime strategies to improve brand value.
- Build Brand Loyalty – A loyal base of customers can tremendously boost brand value. Their unflinching commitment to the brand and their influence on their network can help any brand to beat the competition and improve brand sustainability. Loyalty programs are a highly efficient means to keep customers engaged for a prolonged period of time and eventually turn them into brand advocates and loyalists. Annex Cloud can help you design loyalty programs that will boost your brand value and improve market penetration. Connect with a Loyalty Experience Manager for tailored loyalty solutions that reflect your brand ideologies and help you turn your customers into brand advocates.