Brand equity and its components
Brand equity is the main driver of a company’s attractiveness to customers. And brand equity is not only expressed by a low or high price. Value is a set of aspects that are close to the consumer.
Studies show that brand equity is a stronger driver of customer loyalty than customer satisfaction. In most cases, it is not enough for the customer to be satisfied with the product. The brand must offer more than just value for money.
Most companies use satisfaction scores to measure customer loyalty. However, the perceived value of the brand, which is formed in the minds of the audience, plays a key role.
The modern marketplace has changed. Consumers now expect to get more than just the product they pay for. The social benefit of interacting with a brand is becoming a significant aspect for them. This includes qualities such as:
- recognition and respect;
- status;
- connection to the company;
- membership in the community.
All of the qualities identified shape the consumer’s perception of others.
In addition to social benefits, brand equity also includes functional, emotional and self-expressive aspects. All these components combine to influence the level of customer loyalty.
Importance of trust
Another essential component is trust, which determines the predictability of the experience of interacting with a brand. For consumers to trust a company, it must regularly deliver on its promises. The openness of the company, the transparency of its actions and its ability to meet the expectations of its target audience play a vital role here.
When making a purchase decision, consumers assess their level of trust in a company. If the level of trust is high enough, the transaction will be completed. Otherwise, even the most attractive offers and brand promises will not influence the consumer’s choice. The lower the trust level, the lower the company equity in the eyes of the public. It is therefore vital to build transparent and trusting relationships with customers, based on mutual respect and honesty.
The strategy of equity creation for the customer should be one of the fundamental strategies of any company. It is the basis for long-term business development and increasing loyalty. Loyalty, in turn, influences repeat purchases and increases the number of repeat customers. With all this in mind, marketing should help create value. It gently guides customers along the right path and creates an emotional connection with them.
Equity creation is a dynamic process that needs to adapt flexibly to changes in the market. A brand must constantly strive to increase its value in the eyes of its customers. At the same time, it is crucial to build loyalty.
