What is one-word brand equity?
In marketing, brand equity refers to the value of the brand. It sets the difference between the value of a branded product, and the value that same product would have without that brand name attached.
Brand equity has a huge impact on sales and profitability, because a stellar reputation will always attract more customers. This is increasingly important in modern competitive marketplaces, where companies within the same sector or industry often compete for brand equity.
In this sense, one-word brand equity may be the ultimate achievement in marketing and business in general: the point where your company owns a word, as well as everything associated with it.
How can a brand build one-word equity?
If we look at the few companies that have attained this coveted achievement, such as Google, Tesla, or Apple, we notice three common strategies:
1. Distinguished brand awareness – these brands are not only known for their product, but also by their identity. There is a certain value or feeling associated with them. This can be fulfilled with a popular and recognizable image (such as the logo), persistent innovation, and an excellent customer service that makes the most out of social media and targeted marketing.
2. Promoting good customer feelings – they have managed to produce reliable products and implement successful marketing campaigns, building a solid reputation among millions of customers. They know how to communicate the meaning of the brand as well, adhering to certain values such as family or environmental protection.
3. Customer loyalty – brands such as McDonald’s or Apple have truly formed a psychological link with part of their customer base. It is a very profitable connection that increases the brand’s visibility at the same time. This is why Maurice Saatchi, the advertising guru, has defined one-word equity as “the global ownership of in word in the consumer’s mind”.
How does one-word brand equity impact the ROI?
As consumers often feel attracted towards products with notable reputations, brand equity has a huge impact on sales.
With an effective marketing campaign, a brand can turn the launch of a new product into a global event. Backed by a solid reputation, this hype often has the effect of increasing the profit margin per customer. The brand can afford to take bigger risks, since it will also be able to charge more for a product than other competitors.
The market usually bears higher prices for brands with high levels of brand equity. Therefore, the defining effect is that higher sales volumes will translate to greater profit margins.
Final Thoughts
The shifting focus to the consumer means that organizations must actively think about the brand image they are creating for themselves, as well as how each action and initiative contributes to overall brand awareness and perception. Through solutions such as Marketing Evolution’s brand optimization, organizations can gain insight into what makes its brand resonate with customers. Equipped with this information, marketing teams can make strategic, data-driven decisions about how to optimize future strategies designed to build brand equity and drive ROI.
