John Gumas is CEO of Gumas Advertising based in San Francisco and co-author of Challenger Brand Marketing.
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Businesses compete on many levels. Companies try to outsell their competitors by adding more features, having lower prices, offering better customer service, providing special offers and many other ways. The reason consumers choose one brand over another is frequently the result of brand value.
Every brand has a value, whether you choose to measure it or not, and that brand value can yield substantial financial returns. Consumers are willing to pay more for a product with a higher brand value. Just look at the range in prices for bottled water. Generic or local bottled waters cost a fraction of recognized brands such as Dasani or Smartwater. The difference in price is the product of brand value. Coca-Cola bottles both Dasani and Smartwater, but each brand has a different perceived brand value for customers.
If you grow your brand value, you can increase revenue. The challenge for most companies is determining and validating brand value.
What is brand value?
Although brand value can be difficult to quantify, it’s simple to define. We define brand value as the difference between what it costs to produce a product or service and what consumers are willing to pay.
Using our bottled water example, in 2017, the Arad Group estimated the cost of a gallon of bottled water to be $1.22, making it 300 times the average cost of tap water. Consumers are willing to pay more for bottled water because of the perceived value that it is purer than tap water. A liter of Smartwater costs $1.98, and consumers are willing to pay more because of brand value. The name contributes to the brand value, although Coca-Cola doesn’t actually claim that Smartwater is more intelligent to drink or makes you smarter.
To understand your brand value, you need to consider three factors:
1. Uniqueness
What makes your brand stand out from the competition? What does the brand identity say about being better, e.g., “premium,” “professional,” “extra strength,” etc.?
2. Proprietary Claims
What can your company say or claim that no one else can?
3. Value
Does your target customer understand the value of your offering? Can they answer the simple question, “What’s in it for me?”
If you are unsure of what your brand stands for, then you will have difficulty elevating your brand value. Take the time to determine what your customers expect from you and identify the emotional triggers that move them.
Build your brand value.
Name brands spend millions of dollars to increase brand value. To prove they dominate the market segment they produce expensive ad campaigns, set up giant booths at trade shows and use thought-leadership tactics to get quoted by industry journals and business press. Expanding brand reach using social media and digital media outlets can accelerate the growth of brand value.
The objective of any brand is to build brand equity. Brand equity describes customers’ perceived value based on their experience with your brand. The more positive brand equity you generate, the more you can theoretically charge for your product or service. And brand equity is transferrable to other products that are part of the brand.
You don’t have to be an 800-pound gorilla with a big marketing budget to elevate your brand value. If you focus on three key areas, you can increase brand equity and raise the value of your brand:
1. Customer Experience
Understanding what the customer gets from your product is essential. Beyond utilitarian applications, how do your brand and your company make the customer feel? Identify that feeling and capitalize on it. Demonstrate the company’s commitment to supporting customers with a better sales and support experience. Look at your customer-facing material, such as advertising, packaging, collateral and website. Does that material reinforce your brand value?
2. Maintaining Price Integrity
Your brand is worth what people will pay. If you start discounting goods and services, then your brand value diminishes. If you have a customer who pays $200 for a pair of shoes and they buy the same shoes on sale for $50, they may never pay full price again. There are benefits to discounting and holding periodic sales, but use them as an excuse to delight your customers. Build anticipation and inclusiveness to make your customers feel excited and special so you increase brand loyalty without eroding brand value.
3. Targeting Influencers
You can elevate brand value by associating your brand with industry influencers. That’s why many big brands use celebrities as spokespersons. Consumers gravitate to products endorsed by people they admire and trust. (Fair warning: Vet your influencers and be sure your values are aligned. A skeleton in their closet or the wrong public statement can backfire on your brand.)
You don’t need an enormous marketing budget to build brand value. Any company can increase brand value and claim a leadership role with the right approach. Start by getting to know your customers better. What do they love about your brand? What don’t they like? Determine what makes your brand unique, exclusive and desirable, then build on that foundation. The more you delight your customers, the more brand equity you will have to raise your brand value.
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