What’s Your Brand Worth?

It’s a complicated question and one that has long kept marketers and finance people at odds. How do you measure brand equity? 

There’s a move to find better ways to treat the financial value of a brand. 

But while the C-suite executives wrestle with how to quantify it, we as marketers are left with the task of increasing it. 

But first, how do we define brand equity? 

Defining the Value Contribution of Your Brand

Marketers are used to thinking in terms of attribution: everything needs numbers attached to it. We have to prove the value of a given action with data, measurement, and tracking. 

This is all good, but the danger of living solely in an attribution-first world is that we forget the very human nature of the relationship we’re seeking to build between our customers and our brands. 

Brand equity is a highly intangible way of trying to capture that idea. 

Brand equity refers to the value premium a company gains from its name recognition when compared to a generic equivalent. (Source: Investopedia)

Brand equity is built on consumer perception. The result of positive brand equity is both tangible (revenue, profit) and intangible (brand awareness, goodwill). 

Tangible increases in profit come in three forms: first, a price premium, because people will pay more for a brand they know, like, and trust. And because operating or production costs don’t increase along with the price, that price premium is pure profit. 

Second, increased sales. As more people become aware of your brand (in a positive way), they want it because they see everyone else having it (the bandwagon effect). 

And third, customer retention. It’s far less costly to keep a customer than to get a new one. So building customer loyalty through positive brand equity means a higher customer lifetime value, more customer-generated word-of-mouth marketing to spread your brand to new prospects, and lower marketing costs. 

But Is Your Brand Even Yours? 

So, building positive brand equity is all about consumer perception. But think about what this statement means: you don’t actually own your brand.

To quote the authors of a Strategic Finance Magazine article:

“Brands exist in the minds of targeted customers. They aren’t something a company owns. A brand is the value that a customer adds to the intrinsic value of a product…. [T]he equity is the consumer’s idea of the product, their association with it, the story they tell themselves about the product, and their experience of engagement with it. Marketing helps the consumer create this equity, but it resides with the consumer.” 

 You can’t put brand equity on your balance sheet, but it might do more for your income statement than any single thing your company does or owns. 

And, despite not actually owning it, you do have (almost) complete control over it. 

So how do you build positive brand equity? 

The Love Bank Theory

Marriage experts doctors John and Julie Gottman, co-founders of the Gottman Institute and world-renowned for their work on marital stability and divorce prediction, found over 40 years of clinical work that the #1 source of fights amongst couples is a failure to emotionally connect. 

They developed the love bank theory: the idea that every positive and negative interaction between couples works like a deposit or withdrawal from a bank account. Overdraw your account, and you and your partner are left hurting and upset, perhaps without even knowing why. But continue making those love deposits, and the relationship has a great chance of thriving. 

This same analogy can work great for any brand-building endeavors, as well. Because ultimately, creating a positive customer perception of your brand (and thereby building brand equity) is all about entering into a mutually beneficial relationship with each customer. 

When the number of positive interactions (from product quality to customer service to online engagement and everything in between) significantly overwhelms negative interactions (bad press, a product that arrives damaged, a frustrating phone call with customer service), your customers will come away with greater trust in your brand. 

This can go a long way toward building your “know, like, trust” factor (KLT, for short): a critical piece in nurturing customer relationships. 

Let Them Get to Know You

While the love bank theory can help build the like and trust parts of the KLT factor, every relationship begins with getting to know the other person. 

Two critical steps to helping your customers get to know you well are:

1. Simply showing up and 
2. Telling the right stories about yourself

In our last article, we talked about the importance of continuing to spend on your marketing, even during a recession. The reason for this is that simply showing up over and over helps to familiarize your customers with who you are, what you stand for, and how you’re different from the competition. 

Research suggests that the average person needs at least 5-7 exposures to your marketing message before they are comfortable doing business with you. 

What happens when you show up over and over in a meaningful, authentic way that attracts your ideal customer? 

You increase your chances of becoming, in the words of speaker and coach Andrew Davis, their Prime Brand. In Andrew’s terminology, the Prime Brand is the brand that pops into a consumer’s mind right after a trigger question occurs for a given Moment of Inspiration:

Translation: your prospect realizes a need for something and starts thinking about possible solutions. The closer you are to being the brand that pops into their mind first when they start thinking about solutions, the more chance you have of being the brand they choose without even looking at other competitors. 

Showing up, in a relevant, differentiated way, can help you do that. 

The second step in the list above is telling the right stories. Stories connect people - whether through oral histories passed down from generation to generation in the prehistoric past or through the copy and content a brand produces to build a relationship with its customers. 

Telling the right stories requires a couple of things: 

• Knowing who your brand is (its values, identity, purpose, etc.)
• And knowing who you are seeking to attract (and, to flip the script, who you want to repel)

Tell the stories that help your ideal customers relate to who your brand is. Intentionally cultivating feelings of identification and intimacy in your audience is akin to what happens when close friends spend time together - biochemical responses forge bonds over time that become harder to break. In other words, the more you use stories to connect with your top customers, the more loyal they will remain to you. 

A Powerful Tool for Showing Up and Telling Stories

There are plenty of ways to show up and share stories, but limiting those ways to online limits the impact you can have. As people crave real-world experiences to make up for the pandemic-induced isolation and screen burnout, getting out of the house and off the device is working better than ever. 

Picking a smart medium will never fix poor strategy or inconsistent messaging. But when those things are in order, out-of-home advertising is a natural fit to incorporate into your broader marketing mix. 

Why? Because it has a greater impact than any other single medium. And because it increases the effectiveness of online media as well - creating a positive upward cycle. Smart out-of-home decreases online CPMs while improving recall rates for digital advertising, stretching ad dollars further while building a brand that consumers will remember and come back to. 

Need help integrating out-of-home into your marketing plan? Show up in the real world by reaching out to Adkom - we make activating out-of-home as easy as any digital media.