Building brand equity can be a truly powerful investment for any business. Start ups in particular can benefit significantly, helping them grow a loyal customer base who return to purchase the brand’s products regularly.
Whilst brand equity most likely isn’t a priority for many start ups, the compounding effect it provides for your brand makes it one of the most underrated (and often misunderstood) methods of growing your company from the ground up.
Although it’s been happening naturally in the world of business for around 5000 years, researchers and academics only began to study the process of building brand equity since the 1980’s.
Although accountants and marketers tend to disagree on the definition of brand equity, it can be simply defined as the strength of the brand and its ability to convince customers to pay a premium for a product above the price set by competing generic alternatives.
So why are we happy to pay a higher price tag for an iPhone when they could pay a fraction of the price for an android which can do the same tasks?
The reason isn’t solely down to the high level of brand equity Apple has built since Steve Jobs returned to Apple in 1997, but it is a critical factor. When the brand Apple comes to mind, it is often associated with terms such as state-of-the-art design, innovative technology and even the word ‘sexy’.
Apple understands one key marketing principal better than most.
Customers buy products which are an extension of either the person they are, or who they desire to become in future.
This suggests the products we wear, buy and use help us tell a story. Our story. We use products to give the world a glimpse into who we are, what we believe and how we think.
But brand equity isn’t just relevant to premium brands. The same rules apply to companies in any industry wishing to truly stand out from generic substitutes.
So why should a start up even care about building brand equity. I mean, it’s not like you don’t have a million other things to worry about first, right?
Well investing early in delivering as much value to your customers can come with a wealth of benefits above and beyond simply charging more and generating additional profits.
Some of the key benefits start-ups who focus on brand equity building include:
• Investors seeing the brand as being more a investable
• Customers being loyal to the brand and even becoming an evangelist.
• Talented employees being more likely to desire working for you, and even taking a
• less competitive salary.
So now we know what brand equity is, why it’s important and the benefits it can bring, the last question is how can you start building it?
A customer can only begin to develop a perception of your brand if they are aware you exist. So the first step for any start up wanting to build brand equity is to position themselves effectively in the market and focus on appealing to a specific target audience.
Before we start shouting about how great our offering is, we first need to understand who we’re communicating with. We don’t want to make the cardinal sin of trying to appeal to everyone and anyone. Always look for a niche which has little competition and low barriers to entry.
It's best to be the big fish in a small pond, not the tadpole in the ocean.
Next, learn where your ideal customers hangout and how they spend their time. If you’ve completed the previous step correctly, you should have a good idea of who your ideal target customer is and how you can best connect with them.
For example, if your product is a protein pancake brand, you’ll likely have figured out a segment who would be interested in this product would be fitness enthusiasts and people who enjoy staying in shape.
Some obvious placements for your advertising efforts could be product placement at local gyms, sponsoring fitness related social media influencers or engaging in various fitness related online-communities.
The trick to generating awareness for your start-up is based around these two fundamental steps. Understanding your customer and communicating the right message at the right time.
Using a range of different signals is important when communicating with potential customers in order to create memorable experiences. This is where the strategic development of signals comes in.
You may feel like you don’t understand what ‘signals’ are, but we actually come into contact with thousands of them everyday.
A signal is simply every physical thing we sense relating to a brand which leads to creating thoughts, moments (or hopefully) memories inside your mind.
When I say ‘senses’, I am referring to our sight, sense of smell, touch, taste and what we hear.
Signals are ‘sensed’ by us and these little experiences come together to create our thoughts, experiences and memories which we then associate to the brand or company.
So how could a start up apply these same principles to their brand building efforts? Well, the first step is to define which senses you can realistically use. Let’s imagine you’re an e-commerce brand selling candles. Your product will naturally appeal to sight, so focus on making your packaging aesthetically pleasing and on brand. You can appeal to your customers ‘touch’ by adding an elegant ribbon perhaps, to enhance the opening experience. The scent used for the candle could be subtly sprayed inside the package before shipping, to enhance the opening experience even further.
Although adding music to your packaging is a little unrealistic, you could use a unique piece of audio or music for your digital advertising. Some carefully selected music can help your customers associate your brand with existing perceptions in their mind. At this stage, your focus as a start up is to appeal to as many senses as possible which can come together to create little ‘moments’ for your customer. Moments they want to share with others. These little moments and experiences add up to create memories, which are a critical element in the brand equity building process.
Think back to a brand which made you feel inspired, motivated or even just content in your own skin. The brand which make us ‘feel’ something is often the brand we feel more engaged with, which often leads to us buying from them .
An example is Gymshark, using the power of story telling to connect with a range of segments in engaging ways. By publishing content, stories and advertising focused around empowering athletes to ‘be a visionary’, this resonates with their target audience and the fitness journey they are currently experiencing.
By being supportive, educational and empowering their target audience during their journey, Gymshark manages to play a part of that person’s progress and the confidence they develop throughout. Their #Gymshark66 challenge takes this concept even further, utilising our natural desire for togetherness to inspire positive change within their community.
The brand understands that customers buy from the companies they remember and resonate with. A way to be memorable to a customer is to be part of or associate your brand with something they have experienced personally so your customer feels understood.
This is how connection between brands and customers develops. But remember, in order to create memorable moments, your signals and brand codes must be distinctive and unique.
Look to create moments which can result in memories being formed within the customers mind. Over time, these memories develop something the book ’The Physics Of Brand’ calls ‘brand energy’.
This energy then naturally plays a part in dictating many of the customers buying habits, which leads us onto the last critical step in brand equity building process.
You’ve done the hard work getting your customer this far, so the last hurdle is to make sure you fulfil your promises and try to exceed expectations wherever
possible.
Customers love to feel special. The harsh truth is many brands aren’t willing to put in the extra effort to do more than what is expected of them.
Exceeding your customer’s expectations can be as easy as giving them a little additional gift or sample when they order from you. Perhaps just sending them a
little message when it’s their birthday, or (if you’re a service based company) delivering your service early to an exceptional standard.
It isn’t difficult for start ups to build equity, it’s just a case of delivering as many positive experiences to your customer and being truly value driven over the long term.