Any brand strategy, whether it comes from a new or long-running company, has to be mindful of its effect on brand equity. We talked about its importance in advertising in our explainer of where the industry is heading at the moment, but we felt it was worth emphasising that people’s perception of a brand is important, but that perception is guided by actions. Here’s how to make your brand values talk to people, and keep your brand equity high.
What Is Brand Equity?
Brand equity is the portion of a company’s value attributable to its brand(s), according to Brand Marketing Blog. In other words, a company with good brand equity can rely on its image among consumers being high before a product is released, and this can provide considerable protection from the slings and arrows of a difficult market.
So we can show you what makes good brand equity, we’ll take a look at a mainstream brand that has a high level of public goodwill, built up over many years – Apple. The technology company has now got up to the level of Rolex and Cola Cola in terms of the way its brand is regarded by the public at large, and in terms of its ubiquity in popular culture.
That level of global recognition, especially when it is overwhelmingly positive, is never easy to achieve, and so to give businesses something more achievable to aim for, we also want to highlight a smaller, newer company that is doing good work in marketing, product design, and customer satisfaction, and is being rewarded for it with great brand equity. That company is Dollar Shave Club, which you will probably have heard of if you’ve seen a YouTube ad in the past year or so.
Brand Equity Case Study #1: Apple
A brand with what seems like untouchably good brand equity is Apple. Their brand awareness is so wide that it is reckoned by Statista that the value of the Apple brand is around 300 billion US dollars. Whether you like or dislike the company itself, it’s indisputable that their brand identity is one of excellence in build quality, and the package they offer customers. How have they reached this point? It’s through years and years of perfecting their product, looking at what the competition does, and identifying how to do that better.
Remember Apple was once the company which struggled to replace the Apple 2 desktop computer, and which committed missteps like the Lisa tablet, something which was arguably before its time, but was heavy, bulky, and required a stylus for entering messages, unlike its distant descendant, the iPad.
How the company picked itself up and became stronger than ever is something detailed in the Walter Isaacson biography of Steve Jobs, and two movies about the Apple cofounder’s career.
[Not entirely related, but, if you’re interested, our opinion is that ‘Jobs’, starring Ashton Kutcher, was superficial and unsatisfying, while ‘Steve Jobs’, starring Michael Fassbender, is brilliantly scripted, but still a subtle fictionalisation of the protagonist’s interactions with others.]
To take the example of the smartphone market, Apple did not release the first touchscreen smartphone, but they did release what has become by far the global market leader, the iPhone. This took what people liked about their breakthrough handheld product, the iPod, and put it into a package with a big screen that could be tilted to landscape, a body that was reasonably resilient but still a slim, light, attractive design, and a camera that was, at the time, among the best on the market.
We’re seeing this again with the current trend for experimentation in the smartphone market: Apple is not averse to trying new things – in fact, they are known for it – but they’re rarely the first to try something. This is because they believe that it’s better to let other manufacturers try out design solutions that may or may not work, see what the flaws and successes are, and then build their own version that works well enough to preserve their reputation.
For Apple, brand equity comes in offering customers a product that works well straight out of the box, and has good reliability. It also comes in providing design that is clean, simple, and yet has enough unique identifiers that it seems desirable to consumers, meaning owners of it feel they have a certain social capital from using the product. If Apple released a poor-quality product, its brand equity would suffer; the key to maintaining brand equity is in keeping product quality high, bringing customer satisfaction.
Brand Equity Case Study #2: Dollar Shave Club
There are other, newer, smaller companies who have achieved great brand equity through similar means to Apple, but without the same behemoth scale.
One of these companies is Dollar Shave Club, a four-year-old company which has made its name through mail-order sales of razors and other shaving accessories. So far, so rudimentary? Well, yes, except that they offered to send monthly packs direct to customers’ doors for only $1 a month. As their CEO put it in a promotional video, “do you really want to pay $20 per month for branded razors, when 19 of those [dollars] go to Roger Federer?”
He was making his point in a jokey way, but somehow that fitted in with the image of the company. It was also a major contrast with other razor manufacturers’ ad campaigns, which could make you feel like you were watching the most serious thing in the world at times.
The other thing that people like about the company is its customer service – packages routinely come on time, with special gifts and bonuses, while cancellation can happen at any time with no penalty fee – and the way it is often seen to be doing the right thing.
An example of this last point came when a US soldier in Afghanistan asked for an order for his company, and was told that he would be sent the packages, but that he wouldn’t be allowed by Dollar Shave Club to pay for them. The troops instead got free packages, along with a personal note from the CEO.
These things might seem like marketing ploys – and they are – but they also come from a basis of being honest with customers, not pulling any tricks, and not charging more than the company needs in order to make money. Put simply, this is a company that employs, and understands, Gen-Z consumers.
As we’ve explored in other articles, the new group of younger consumers appreciate authenticity as much as grand gestures, and from their rinky-dink, seemingly thrown-together ad (which is actually expertly scripted and choreographed), to their confidence in keeping their customer base through clear and honest communication, Dollar Shave Club seem rough-and-ready, and scrappy, but have a brand equity that was part of the reason for it being bought by Unilever for $1bn.
As part of their customer care programme, every Dollar Shave Club subscriber gets a monthly magazine in their package, and this also helps to build brand loyalty, and hence brand equity, as consumers look at the company and feel that whatever they do next, based on the evidence presented so far, will be good, and will be beneficial to the customer.
For anyone interested in brand building, this is a great case study in how to make consumers care about what you’re doing.
Want more tips on how to make people take notice of your brand? Here are some easy hacks!
What Can We Learn from these Companies?
Brand equity is difficult to earn, and very easy to lose, particularly if a brand takes the loyalty of its customers for granted, and tries to circumvent rules that are there for everyone’s benefit. Neither of the companies we have profiled have done this – in fact they have spent years assiduously building their profile with consumers, not only through one-off campaigns, but through sustained hard work in appealing to, and broadening, their customer base.
It’s also important to note that both of the mentioned brands have achieved brand equity by understanding their core proposition, and what customers like about it, and by caring about product design, customer service, and continued excellence, enough to keep customers loyal.
If this were not the case, their brand equity would not be as strong as it is, because brand equity comes hand-in-hand with real-life brand performance, something you might think about the next time you see a premium brand licencing its name out to a less-than-premium product.
To find out about the state of advertising now, take a look at Nexd’s Digital Advertising Guide