Brand Equity Is a Business Asset—Not a Marketing Expense
When business leaders review their company’s assets, they typically think about facilities, equipment, technology, intellectual property, customer relationships and people. The brand value or equity is often left off the list. That is a mistake.
A strong brand is not simply a logo, tagline or collection of advertising materials. It is the accumulated value of what customers, prospects, employees and other stakeholders believe about a business. It influences whether people recognize the company, understand its value, trust its promises and prefer it over the alternatives. Those perceptions can have a direct effect on revenue, profitability and the long-term value of the enterprise.
Strong Brands Compete on More Than Price
Businesses with weak differentiation frequently find themselves competing on price. When customers see little meaningful difference among several options, the lowest price can become the deciding factor.
Strong brands change that equation. This is important for retail and e-commerce businesses, B2B companies, as well as nonprofit organizations.
Research from Google and Kantar found that strong brands can command prices up to twice those of weaker competitors. The same research concluded that moving away from promotion-heavy communication toward more balanced brand building can reduce price sensitivity by as much as 20% over time. That is an important business outcome.
A company with greater pricing power may be better positioned to protect margins, absorb rising costs and avoid becoming dependent on discounts to generate sales. Customers are not simply purchasing a product or service. They are paying for a combination of quality, confidence, reputation and expected experience.
Brand equity creates that value before a salesperson enters the conversation or a customer clicks an advertisement.
Brand Equity Makes Marketing More Productive
A recognized and trusted brand can also improve the effectiveness of future marketing.
Prospects are generally more receptive to a company they know than to one they have never encountered. Familiarity can improve response to search advertising, digital campaigns, sales outreach, content marketing and new product introductions.
This is why brand building and performance marketing should not be treated as unrelated activities. Brand strategy creates the understanding and preference that make performance campaigns work harder.
The benefits compound over time. Every consistent customer experience, campaign, article, video and sales interaction contributes to the same reservoir of brand value.
The reverse is also true. Inconsistent messages, poor creative execution and disconnected customer experiences gradually weaken confidence in the business.
Cutting Brand Investment Can Create a False Economy
When budgets tighten, brand marketing is sometimes viewed as a discretionary expense because its impact is not always captured by an immediate click or lead.
But the absence of an immediate conversion does not mean the investment produced no value.
Brand marketing influences future consideration, preference and demand. It helps place a company in the customer’s mind before the customer is ready to make a decision.
Google and Kantar estimate that recovering market share lost after marketing cuts can require approximately $1.85 in reinvestment for every $1 originally saved. Reducing marketing may improve a short-term expense report while weakening future revenue potential. The business saves money today but may pay considerably more to rebuild awareness and regain customers tomorrow.
Building Brand Value Requires Discipline
Brand equity is not created by occasional bursts of advertising. It is built through a disciplined strategy that answers several fundamental questions:
What does the company stand for?
Why should customers choose it?
What makes its value meaningfully different?
How should that difference be communicated consistently?
What experience must the business deliver to make the promise credible?
Kantar’s Blueprint for Brand Growth, based on an analysis of 6.5 billion consumer data points collected across 20,000 brands, identifies meaningful difference, customer predisposition, market presence and the ability to find new growth spaces as central drivers of brand growth. Those drivers require more than an attractive identity. They demand coordination among business strategy, creative strategy, media, content, sales and customer experience.
Marketing That Builds the Business
At Abbey Mecca, we evaluate our clients’ brands on four metrics – awareness, understanding, differentiation, and relevance. Understanding where your brand stands on these dimensions with stakeholders, provides the foundation for building marketing campaigns that build value.
Marketing should create value on two levels. It should help clients achieve measurable objectives today—qualified leads, increased sales, customer acquisition, fundraising results or market expansion. It should also strengthen the brand value that will support growth in the years ahead.
That requires an integrated approach combining brand positioning, award-winning creative, strategic media, branded content and performance marketing.
The goal is to create a stronger competitive position. When viewed in that context, brand building is not separate from business building. They are the same investment.
