September 20, 2019
There’s a long list of branding terms that every entrepreneur, business owner, and especially brand or marketing manager need to know. Two of which, brand awareness and brand equity, should be at the very top of that list. Why those two terms? Because they’re directly related to an audience’s perception and engagement with a brand. Read on to learn more about the difference between brand equity and brand awareness, and discover how to measure them to reach your brand’s potential.
Brand awareness and brand equity are sometimes used interchangeably and it’s really important they’re not. They represent two different factors when it comes to branding.
Brand awareness is the familiarity an audience has with a brand through its qualities or images.
Think popularity, logo recognition, or engaged social media. It is tied to what an audience remembers about a brand.
Getting brand awareness right can really drive consumers to make repeat purchases with your brand. If a customer recognizes your brand instantly, then there’s a far higher chance of them choosing it over any of the other competitors. Put yourself in the customer’s shoes—wouldn’t you rather go with a brand that you know about rather one that you have never seen before?
If you don’t already track brand awareness, you need to get on it stat as this is one of the most important metrics for all companies. When tracked, you can see what works to strengthen and increase awareness, so you know exactly what your marketing efforts should focus on. As your brand awareness then starts to grow, so too should your revenue and business growth.
Brand equity is the actual commercial value that comes from audience perception of a brand.
Why do you pick a particular product or service over another of the very same type? Probably because of its branding. A person will pick a specific brand over another even though the second brand being a better product because of effective branding. In other words, branding can make a product or service more valuable and trustworthy.
Brand equity is just as important as brand awareness. In fact, the equity of your brand can be heavily reliant on awareness—strong brand awareness often results in good brand equity. It’s not as simple as that, though, as there are other factors that come into play such as brand recognition, customer retention, and perceived brand quality.
It might not always be that obvious, but the majority of customers base their purchasing decisions on brand equity. If a brand has strong equity, then there’s a high chance that consumers will have lots of confidence in it. This can help you take some of the market share away from your competitors as consumers will repeatedly return to you.
Despite the very different definitions both equity have, people still confuse them. This might be because brand awareness actually falls under the category of brand equity. To explain: brand equity can be looked at from three perspectives: customer mindset, product marketing outcomes, and financial marketing outcomes.
Brand awareness is part of customer mindset and what determines brand awareness is also what determines financial outcomes. To make it even clearer, it is an element of brand equity that should be treated as an individual component that affects overall brand equity. It’s a significant detail part of a much larger picture.
Improving brand awareness means improving brand equity, and increasing brand equity means increasing financial outcomes. There are a few ways to increase brand awareness. Make sure to build and sell quality products or services. Focus on brand strategy immediately and establish a strong brand presence. Brand recognition comes a long way in times of distress or when customers need to pick between two brands.
Speaking of customers, pay attention to customer satisfaction. Be friendly, exceed expectations, and practice accountability. Another way to increase brand awareness is to partner with trusted companies and leverage their presence to help your brand. Don’t forget the technicalities and invest in a creative, but qualified marketing team.
Here are a few further ways you can build your brand awareness:
Establishing a system of building brand awareness means being one step further in developing brand equity. Brand equity is strengthened by factors of brand awareness, identity, and loyalty. Awareness is the memory customers have of a brand. Identity is what makes a brand stand out in the market. Make sure the brand identity is consistent with a universal tone, imagery, and engagement on all mediums whether it be on social media or the brand’s website. Build loyalty to create an audience that follows and trusts a brand. This can be done word of mouth or by offering incentives.
One further way you can build brand equity is by maintaining a unique identity. A strong identity that is easily identifiable will help you stand out from the crowd. If your branding pops, it will support your brand’s awareness and identity, both of which are crucial factors in its overall equity. You should also ensure that the identity is consistent across the board in all branding too. If it isn’t, it could cause confusion amongst your target audience and they might not be sure whether a branded product that they see out in the wild really is one of yours.
There are so many easy ways that marketing managers could be measuring their brand awareness, but that’s a whole different post. In short, here’s a quick summary of everything every marketer needs to be doing:
Measuring your brand awareness should give you an insight into your equity too. If you focus on the following points, you could measure your brand equity even further:
Having strong brand awareness provides a ton of benefits. Expect increased customer loyalty. The more aware of a brand people are the more likely they are to trust and choose it; familiarity is security. Brand awareness also serves as a great measurement of success and indicate to investors that it’s a brand worth investing in. Major brands exist for a reason.
Apple is one of the most valuable brands in the world with an extensive reach in terms of its audience or customers. It’s not about cost. People are willing to pay for Apple products, despite a high price tag. Apple’s iconic and universal logo makes the company’s products easily identifiable. No doubt that Apple’s clever marketing campaigns are supported by a strong team.The exceptional and consistent customer service provided at its retail stores and Genius Bars also contributes to customers purchasing and repurchasing their products.
Getting to the level of brand equity and awareness that Apple has reached is certainly no easy task. But looking at an example like Apple makes one realize just how important brand equity is to the success of a company. Build brand equity to build a loyalty base of customers who are willing to pay more and encourage others to do the same.
Great brand equity doesn’t just mean thinking about customers. Again, consider potential or current investors and who or what they want to invest in and continue to invest in. Having an established brand provides more options in getting financing to allow a brand to expand and have better negotiating power.
The difference between brand awareness and brand equity may seem complicated at first and they definitely overlap. But think of brand awareness as a major ingredient to an entire dish, brand equity. Knowing the difference and measuring them separately could be that detail that gets your brand ahead of the rest.