How to Use Keller’s Brand Equity Model to Boost Your Brand
Today’s economy is consumer-driven. “Hard sell” tactics are no longer working like a charm. On the contrary, most modern consumers have a strong aversion to paid advertising, and instead, favor brands recommended by their peers and community. But how do you get on one’s radar? By building a recognizable brand, or more precisely – increasing your brand equity.
What is Brand Equity?
Shopify offers a great definition of brand equity:
“Brand equity is a marketing term that describes a brand’s value. That value is determined by consumer perception of and experiences with the brand”.
Negative brand equity means fewer product recommendations, referrals and lower customer retention.
And positive brand equity generates the following value:
- Consumers are more willing to pay above-average prices for such products.
- Positive brand equity is “transferrable” and organically extends to other products created by your company. Think about all things Disney.
- Higher customer loyalty. And the probability to sell to a current customer is 50%-70% (aka higher revenue).
In essence, strong brand equity means that your products are desirable, recognizable and consistently in demand. Surely, that’s a good thing!
How to Measure Brand Equity
“Branding” is a somewhat ephemeral concept. How can you measure something that you can’t quite see?
Well, Kevin Keller, a marketing professor at Tuft School of Business (Dartmouth University), actually did that impossible and pioneered a viable model for measuring brand equity. His “Consumer-Based Brand Equity” model breaks down the key elements of brand equity and suggests how businesses can proactive steps towards building a positive brand. Here is a visual of Keller’s model.
Each pyramid segment represents a question that consumers will ask about your company. As you answer those questions in effective ways, moving up the pyramid, you develop a strong brand.
Let’s unpack each step of the model.
Step 1: Brand Identity
So the first order of business is to raise consumer awareness about your company. You’ll want your brand name to stand out enough so that consumers instantly recognize it.
Obviously, this requires some strategy. To succinctly communicate “who you are”, do the following research:
- Understand who your ideal customer is (this will require some market research)
- Pin down their common purchasing behaviors and preferences. Do they shop online? What’s their budget? Where do they look for advice? What do they value? What would make life better for them?
When you know what they need and how you can fill that need, you are in a good starting place. For purposes of illustration, let’s use the Dollar Shave Club startup. They really nailed their brand positioning by solving a very precise customer pain point. The vast majority of men shave. They have to buy those razors at stores. They may forget to stop and get them and they are using an old, dirty blade.
If men could buy a subscription to razors, delivered to their mailboxes every month, life would be better – one more task off of their plates. The founders launched their business with a hilarious website video that showed the value of what they offered, as much as the actual product.
Step 2: What Are You?
Next, you’ll want to polish the messaging for your unique selling proposition. How is your brand meeting a need and providing value? And what about your product/service stands out?
So, you are really about two things here. Dollar Shave Club produced a nice simple razor that got the job done well (performance). But its “image” was also compelling – make life more convenient for its customers. To launch its brand, the founders produce a short explainer video – hysterical – that provided customers with both performance and image. This gave the company a “brand personality.”
Step 3: What Does the Customer Think/Feel About You?
This is called brand response.
Customers make judgments about brands based on quality, relevancy to their needs, likeability, and even trust. Customers also judge a company by how it makes them feel. And a brand must appeal to at least one “feel good” response.
In the case of Dollar Shave Club, the marketing was superb. The video went viral, the idea of a subscription service was unique, and the razors were good.
A business must think about how it can gain a positive response from its potential customers. This includes not just product quality or durability but the style, tone, and voice of the marketing messages that are delivered. They have to appeal.
Step 4: Resonance – How Much Will Customers Want to Connect with You?
This is where the real “meat” is – the top of the pyramid. If you have been successful in steps 1 – 3, you have customers that stick around for the long-term. They have a relationship with your brand, and they like you.
Once you achieve this, customers are loyal, they like purchasing from you, they connect with you even when they are not buying, and they recommend you to their friends. When you achieve this level, you should focus on further tightening the connections with your customers and gradually occupying a central position in their lives. You can accomplish that by:
- Personalizing your marketing and services.
- Rewarding the most active buyers with special deals, discount gift cards and other small tokens of appreciation.
- Offering tiered rewards based on their loyalty program status.
Basically, your goal is to keep the relationship resonating over time.
Brand recognition and resonance are critical to business success. If you are not sure how to market a new product or service, then Keller’s Brand Equity model can help you figure out how to hone your message better!
Photo by Erica Zhou