Brand equity is an abstract quantity in your business. It is not easily measurable. However, the impact of brand equity is often huge for any business. Strong brand equity simply means more business, more value and longevity. Here are some of the advantages of having strong brand equity in your business:-
Get a Competitive Edge in Your Business
This is perhaps the biggest advantage of having strong brand equity. You differentiate your brand and products and position yourself as a trusted purveyor of products in your niche. In the market, that will always mean that customers will be showing a strong preference for your products. With strong brand equity, customers are even willing to pay a premium to have or experience your products and services. The strength of your brand means that you don’t have to compete just on pricing; you will be offering your customers more than just good bargains but good value that satisfies a need. Competitors generally find it hard to edge out an established brand in a market niche due to the loyalty, goodwill and the brand equity that has been built over the years.
Customer Loyalty
Customer loyalty is an integral part of the brand equity. If you have a strong and trusted brand, you will always have a loyal customer base buying your products. For businesses, this has an impact on the bottom-line. Not only will you have a constant supply of clients but having a loyal customer base also reduces your marketing or customer acquisition cost. The good thing about customer loyalty is that it is not easily transferrable. Customers will stick with a brand all their life once they have established a close emotional association that is a product of the value they get from interacting with the brand.
Get better margins in your business
Positive brand equity will translate to good margins for your business. Not only can you charge a lot for your products and get away with it but you can also keep selling without a significant customer acquisition cost. When customers value your brand and hold it in high esteem, they will be willing to pay a premium to get a piece of it even if they might have cheaper and better quality alternatives. Case in point is some of the world’s leading luxury brands such as Rolex, Cartier, Rolls Royce, Patek Philippe, Hermes, Chopard or Prada. Customers always have an option but they are willing to blow their life’s savings to get a piece of some of these luxury brands.
You can grow your business effortlessly
Having a positive brand equity allows you to grow your business into new markets without incurring significant business overheads trying to get your brand recognized. You can enter new markets and customers will be eager to try out your brand.
Good brand equity gives your business good negotiating power
If you are a top brand, suppliers will be eager to get their products into your shelves and they are willing to do so at significantly more advantageous terms for you. If you have a strong brand, you will also have an upper hand when negotiating with investors interested in pumping money into your business.
If you are going to build a business for the long haul, there is value in having a strong brand equity. It positions your business for longevity.