Building Brand Equity in 2023: Sustainable Value Creation

building brand equity

Suppose your business develops the next leading search engine. It’s highly reliable. It’s accurate. It’s accessible and easy to use. Yet, despite its impressive functionality, it isn’t getting the usage it deserves. Why? Because Google exists. 

In fact, Google has transcended its status as a household name. The business is so successful that it’s become, in itself, a verb. “Just Google it.” As it is, it shouldn’t come as a surprise that other search engines struggle to stack up against this powerhouse. So, how can your business succeed?

If you’ve ever wondered what makes customers more willing to pay for one brand over another, especially in highly undifferentiated businesses, the answer is brand equity. While all brands have value, recognized businesses will always yield more substantial financial returns.

Still, smaller businesses can increase revenue by outdoing competitors without relying on hard-sell tactics. 

Why Brand Equity Still Dominates in 2023

brand equity

Positive brand equity can spell the difference between success and failure. Despite the number of up-and-coming sports apparel brands appearing on social media with hard-to-beat prices, household names like Nike and Adidas continue to control the marketplace—all thanks to brand faithfulness.

57% of older shoppers prefer to remain loyal to brands they “already know and trust” and are likely to browse a brand’s website before visiting their brick-and-mortar shop. Thus, online brand equity matters, especially as information becomes more quickly available to shoppers.

In addition, 7 in 10 customers will buy more from brands they trust, even if they can access a cheaper product version from a brand they don’t. In 2021, 74% of Gen Z shoppers and 67% of millennial shoppers abandoned brands because they were: 

  1. Creepy (tracking browsing behavior without their permission)
  2. Annoying (sending too many messages with no explicit declaration of their privacy policy)
  3. Not listening (sending messages despite opting out)

Thus, developing robust brand equity and unbeatable trust will keep businesses resilient in trying times (like the pandemic) and provide sustainable competitive advantages.

Brand equity’s most significant allure lies in its ability to allow brands to charge a price premium. As it is, brands that present themselves consistently increase their revenue by 33%. Not only can known and loved brands increase price premium percentages over the market average, but they can also develop a more significant market share.

What Makes a Strong Brand?

what makes a strong brand?

Strong brands are:

  • Meaningful: They consistently meet consumer needs, improving measures related to corporate citizenship like sustainable practices and a “deeper” mission and vision.
  • Salient: They are top-of-mind for specific consumer needs. For instance, Google is now synonymous with searching queries online.
  • Different: They should be unique or trendsetting. 

Companies with good brand equity should deeply understand how they’re perceived. Yale School of Management professor Ravi Dhar says, “Marketing managers spend 70 hours a week thinking about whatever product they are marketing, but the consumer is spending seven seconds.” 

In addition, memorable brands are present where it matters. For instance, if you’re targeting a younger demographic present on forums like Reddit, your brand will do well to engage with them there. 

When successful brands target potential buyers where they dwell the most, they develop a passionate tribe, a concept pioneered by American writer Seth Godin. According to Godin, tribes are a collection of people who share similar beliefs, that belief being your brand and what it stands for—not just what it sells.

Case Studies: Brand Equity Stories

Brand equity stories

Household names like Apple, Coca-Cola, Nike, and Google are prime examples of well-maintained brand equity. However, longevity doesn’t come without its occasional mishaps. But how did these brands make a comeback? Let’s study them.

Apple

As per the Kantar BrandZ Most Valuable Global Brands Report 2023, Apple holds the world’s most valuable brand title, with a brand valuation of $880 billion. How does Apple do it?

Despite many complaints about its notorious obsolescence model, Apple has kept its products unique. For instance, unlike many smartphone brands, Apple manufactures its flagship A15 and M1/2 chips in-house, allowing for logistical flexibility when other companies struggle with chip shortages.

In addition, Apple has improved its brand value by branching out into other services like streaming. In March 2022, Apple TV became the first streaming studio to win the Best Picture category at the Academy Awards.

Nike

Nike thrives on impeccable brand associations and partnerships with well-respected athletes like Cristiano Ronaldo and Serena Williams. 

In fact, its Michael Jordan collaborations have to be the most successful brand partnership of all time, as the brand now has over 200 pending and active trademarks. 

In addition, Nike holds a 39% market share in the global athletic footwear industry. 

Technology is part of the reason behind Nike’s success. Its cushioning and self-lacing shoes aren’t like any other in the market, making it a (literal) step ahead of its competitors.

Volkswagen

No brand journey is perfect, and Volkswagen is a testament to coming up strong from beneath the ashes. In September 2015, the Environmental Protection Agency (EPA) revealed that Volkswagen installed software that allowed vehicles to cheat on their emissions test. In reality, Volkswagen diesel cars exceeded the permitted emissions standards by 40 times. Consequently, Volkswagen was forced to cover over $30 billion in fines. 

Impressively, Volkswagen wasn’t too far gone and started rebuilding its brand equity in 2016, when the company formed a Sustainability Council, eventually becoming a leader in sustainability in 2019. 

According to the International Council on Clean Transportation, Volkswagen’s sustainability efforts are “bigger, bolder, and far more detailed” than its competitors. 

Brand changes

GAP

While some brands recover from their scandals, others don’t—proof that conquering brand equity hurdles is not simple. After a 2016 controversy over Gap’s passively racist kids’ advert and the fallout with rapper Kanye West in 2020, the once-popular brand is struggling to rebrand successfully.

Despite its efforts to invest in NFTs and reintroduce itself as a lifestyle brand, GAP saw significant drops in sales and website traffic in 2020. Why? 

GAP failed to jack hyper-successful trends, missing the denim resurgence in 2021 despite its roots as a denim brand. Ultimately, GAP’s direction was too scattered, and marketing teams failed to identify a unique selling point. 

Weight Watchers

In most cases, brands change along with the times. As consumers have become increasingly socially aware, companies need to follow suit. However, these changes aren’t always welcome. 

When Weight Watchers attempted to rebrand in 2008 by dropping the word “weight” from its name, the company received backlash and watched its share prices drop. So, Weight Watchers changed its approach, rebranding to “Weight Watchers Reimagined” and, eventually, “WW International” in 2018.

As words like “diet” become rife with negative connotations, you may wonder why WW International’s attempt to extend its “livable” philosophy backfired. Perhaps the best, most sustainable way to advocate such changes is to consult the customer. 

Keeping Brand Equity Relevant in 2023

Keeping brand equity relevant

Maintaining strong brand equity is just as important as creating it, especially in 2023, when trust and reliability are easy to lose. Here are a few relevant methods for creating positive brand experiences and associations. 

Stop Discounting

While introducing many promotions and discounts may seem like a simple way to drive sales on your website, doing so can diminish brand value more than you’d anticipate. 

Consider the German chain store Praktiker. Founded in 1978, Praktiker discovered the short-term benefits of over-discounting and advertising its brand as a “steal.” Despite being worth 3 billion Euros, Praktiker quickly went out of business in 2013

Over-discounting your products doesn’t just drain margins—it also leads to the following brand consequences:

  • Customers constantly look for discounts and are, consequently, disappointed when they don’t find one.
  • Your website attracts low-quality visitors, such as individuals only visiting, looking for bargains, and brand researchers studying their competition.
  • Customers perceive your brand as a “discount brand” perpetually, making it challenging to rebrand from a luxury perspective.

Many startups or failing businesses are unaware that branding can improve conversion rates. Instead of focusing on price cuts, increase brand empathy by identifying what your customers want and providing unbeatable value.

consumer focused marketing strategies

Provide Consistency

Consistent, consumer-focused marketing strategies are foolproof ways to keep your brand top-of-mind. Despite trends domino-ing faster than ever, remaining loyal to already successful branding tactics will set you up for success. 

Take Starbucks, for instance. If you’ve ever had your name spelled dramatically wrong, you are just one of millions who now know this is the brand’s number one marketing strategy. Yet, customers continue to buy into it, sharing photos online and driving impressive traffic to Starbucks’ online channel. 

If you’ve already found the sweet spot within your brand equity strategy, fixing what isn’t broken has no point. Of course, this isn’t to say you can’t experiment so long as you provide customers with what they expect and love.

Don’t Forget About Your Customers

When a business experiences success, leveling up seems like the most intuitive step. However, abandoning your existing pool of customers for higher-paying ones isn’t always the right move. 

Consider J. Crew, once the most successful clothing brand in the U.S. in the 2000s. That is, until J. Crew suffered a monstrous loss of $658 million in 2014, filing for bankruptcy in 2020. Why? According to J. Crew’s then-CEO Mickey Drexler, the brand became “too elitist” and presented itself as “being a higher-priced company [than it was].” 

Instead, your brand is better off listening to its customers and giving them what they want. If your brand is becoming a staple amongst Gen Z fashionistas or millennial coffee lovers, embrace it. 

Stay True to Your Brand Positioning

If your brand positioning works, leverage it. Consider how Walmart stands out amongst its retail competitors operating as a low-price brand, communicating this positioning creatively. 

For instance, for almost 20 years, Walmart used the slogan “Always Low Prices.” In 2007, Walmart discovered that its customers saved $2,500 annually on groceries, eventually changing its slogan to “Save Money. Live Better.” 

As proven by Walmart, being loyal to brand positioning that works resonates with returning customers and entices new ones. 

tell your brand stories

Tell Your Brand Story

One of the best ways to communicate what your brand stands for is through storytelling. Excellent brand stories should immerse readers, clearly establish what your brand is about, and offer something beyond your existing products and experiences.

Marriott’s #AtTheMoxy campaign is one such example of successful storytelling. Often depicted as a luxury hotel that doesn’t cater to middle-class travelers, the Marriott successfully marketed the Moxy chain of boutique hotels as millennial-friendly while staying luxury-chic. How? 

Marriott developed the Do Not Disturb video series, featuring American artist Taryn Southern and many influencers. The video series conveniently took place in a Moxy guest room, where Taryn asked Instagram and YouTube personalities about their travel and career experiences. Each episode was playful, the perfect length, and engaging—a natural and effective way to get wander-lusting millennials to book a stay at any Moxy chain.

Measure your success

Measure Your Success

Part of developing a successful brand equity campaign is knowing how to maintain it. You don’t just win customers’ hearts without tracking how you got there. When measuring brand equity success, consider these three core drivers:

  • Financial metrics: Track your business’ profitability, revenue, cost to retain and acquire new customers, and branding investment to determine whether your marketing budget is where it should be.
  • Strength metrics: Track customer loyalty and retention to determine how well you generate “buzz.” Monitor social media to get a more comprehensive picture of how users perceive your brand (whether positively or negatively).
  • Consumer metrics: Track purchasing behavior and brand sentiment, considering how consumers connect with your brand emotionally. 

Future Trends in Brand Equity

future trends in brand equity

As we’ve established, brand equity is an aspect of marketing that is expected to remain relevant in the coming years. As consumers become increasingly conscious of how they relate to brands, anticipating trends can keep your business future-proofed. 

Reliance on AI

As with many aspects of marketing, brands are leaning into innovation to push their efforts forward. Brand equity-wise, AI can help drive more personalized user journeys and provide predictive analytics. 

Mercedes Benz, for instance, is using AI to create self-sufficient entities close to humanlike companions for loyal customers driving their vehicles. 

Otherwise, smaller brands use AI for graphics, copywriting, and cataloging. Considering where AI is now, businesses can leverage specific software to learn its guidelines, making branding efforts far more efficient.

Booming Opportunities in Health Tech

As AI advancements sweep the nation, the health and wellness space significantly boosts brands like Microsoft, IBM, Google, and Fitbit. Currently, it’s impossible not to associate the idea of fitness with Fitbit and the Apple Watch. 

If you’re not functioning out of the technology industry and think these trends don’t relate to your business, think again. Consumers are all about what’s healthy and sustainable. Even Google focuses on incorporating a healthcare strategy into its primary business lines, adding a Health Connect app to its Pixel devices. 

Of course, if your business industry is far less adjacent to something healthcare-centric, consumers don’t expect you to create healthcare apps. Instead, businesses can benefit from becoming more sustainable. 

The elements of a sustainable brand include:

  • A socially responsible brand purpose
  • A comprehensive sustainability strategy
  • A sustainable product innovation process
  • Responsible supply chain management
  • Active steps to reduce energy consumption

Again, one of the most successful sustainable businesses with impeccable green branding is Starbucks, whose initiatives like Coffee and Farmer Equity (CARE) and sustainable design elements have put it at the forefront of success. Starbucks uses eco-friendly materials to develop its products, employs energy-efficient equipment, and acquires LEED certifications for each store.

Another sustainability powerhouse is Nike, rife with community development programs and eco-friendly manufacturing processes. 

Shift from Third-Party Data to First-Party Data

Modern marketers know the value behind data-driven branding. Long gone are the days of casting a wide net and hoping it reels high-quality customers in. Now, the most successful marketers rely on data collected directly from customer interactions. 

Leveraging this data can create hyper-personalized experiences, delivering better-targeted ads across all your channels. 

A simple, straightforward, and successful method of using first-party data to increase trust within your brand equity circle is publishing testimonials on your website. Direct testimonials are an excellent way to build relationships with potential customers eyeing your products. 

Another successful method of using first-party data, as proven by fashion brand Alex Mill, is retargeting. Even the best-branded businesses experience abandoned carts. Alex Mill uses this first-party information to remind shoppers to check out, pushing them off the fence to convert.

brand equity

The Bottom Line

As we’ve established, brand equity is inevitably critical to your overall success as a business. Despite an impressive roster of clever new products at cheaper prices, consumers still prefer to do business with companies they know and trust. 

For your brand to succeed in an increasingly competitive landscape, it must be memorable, salient, and different. In studying equity success stories from Apple, Nike, and Coca-Cola, novice marketers and struggling businesses can model their strategies after proven ones.

In addition, brands can stay relevant by being consistent, tapping into storytelling opportunities, and taking a consumer-forward approach.

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