Brand equity is a precious thing. It takes strategy to build it and agility to keep it.
But what is brand equity, exactly?
Well, there are multiple marketing models that define what brand equity is, and while they all vary slightly, they all tend to boil down to this:
Brand equity is the perceived brand value from an audience perspective.
Coca Cola is a masterclass in brand equity. Synonymous with cola-flavoured beverages, the company has built an instantly recognisable brand the world over. From the iconic Coca Cola logo and unique glass bottle design, to decades of consistently memorable advertising, celebrity endorsements and ever-clever marketing tactics. At this point it doesn’t really matter what Coca Cola tastes like, its 137 year heritage has garnered a seemingly unstoppable reputation, and 2.1 billion (yes, billion) servings are enjoyed worldwide every day. Its tactics continue to drive loyalty, trigger an emotional connection (the lorry at Christmas, anyone?), and influence purchasing decisions to the point that Coca Cola is the only option for some consumers.
So how can you build yours?
Brand equity doesn’t just happen. It takes strategy.
A good strategy considers brand identity, meaning, response and relationships.
Brand identity should form the foundation of your strategy. What your brand looks like will influence and (hopefully) attract audiences. However, it’s key to remember that a brand is more than just a logo, and that an identity is not just about aesthetics.
Values and tone of voice are important facets of any brand identity, and it’s crucial that these elements are meticulously weaved into your brand strategy, because they bring meaning, which in turn helps your product or service to become meaningful to its audience.
Providing clarity around your product or service is all part of the persuasion process. Brand positioning will highlight why your brand deserves attention, and if you’re doing it right, you will begin to build a sense of perceived brand value.
Traditional advertising tactics used to be at the heart of positioning a brand to build meaning, but these days tactics extend to endorsements and sponsorship, influencer marketing and digital PR, which means today the possibilities and potential are literally endless.
With all of this considered, it’s only natural that your brand will trigger a response among its audience. Your brand will be judged, whether consciously or subconsciously, and people will form opinions and associations that will impact brand equity for better or worse. This emotional connection will drive loyalty and influence purchasing decisions and other interactions.
Remember that an audience can make or break a brand’s equity. So you must be clear in what you want your audience to think and do, in order to influence the response to your advantage. Ultimately, your brand must resonate, and consistently do so.
Social media is a great tool to grow an audience and stay in touch with it. And building a relationship with your audience is a crucial part of building brand equity. It opens a dialogue, and allows brands to get closer to audiences than ever before. It’s not necessarily about selling - an overt sale pitch can be a massive audience turn-off - but building affinity, aligning a brand with an audience’s values, and having a two-way conversation, all contribute to positive brand perception, interaction and advocacy.
Brand equity is a sliding scale
Cast your mind back to the 1990s, when Skoda was the most uncool brand of vehicle you could think of. Skoda became intent on transforming its reputation, and adopted a strategy that led Skoda to become one of the more premium brands on the road today, associated with quality, safety and class. With clear aspirations and a plan to get there, Skoda elevated its brand equity exponentially, proving that brand equity is on a constantly sliding scale.
Which means it goes both ways...
Just think of Kanye West. Once a seemingly untouchable force within the music industry, laden with product sponsorships and endorsements, West’s own brand equity was, metaphorically speaking, through the roof. But the way in which he has conducted himself in recent years has severely damaged his brand equity. His values no longer resonate with audiences en masse, and once-smitten brands have retreated from sponsorship deals with the musician. The word cancelled is fraught with problems, but it’s a word that best describes the status of West’s personal brand equity today.
So what has this got to do with Elon Musk?
Achieving and maintaining brand equity is a tricky road to travel on. But most brands see the value in investing in theirs, and will protect it at all costs. So it’s interesting to witness how publicly Elon Musk’s Twitter is attempting to tweak the social media platform, and how that is impacting brand equity right before our eyes.
On one hand, you have a well-known, commercially-minded business man with a very open vision to transform a social media platform.
On the other, you have a bemused community of users that isn’t really sure what’s going on or why. And with it, the brand equity is shrinking.
Admittedly Musk inherited a problematic platform when he purchased Twitter. But as he leans up the operating model, and continues to tweak the product (for better or worse), the negative user responses, dwindling advertisers and unrelenting press coverage is damaging the brand’s equity.
With several competing platforms popping up (Meta’s Threads, for example), it seems as though Twitter is on a downward spiral.
Musk’s decisions have perplexed many. They come across as reckless. But the latest announcement could be the most perplexing yet.
Twitter is in the midst of rebranding as X. With a new name and logo also comes a renewed vision for 'an everything' platform, which will soon incorporate a new payment function alongside the social media aspect.
The future of Musk’s Twitter could, in theory, be a masterstroke in product improvement, but the way the changes have so far been implemented have damaged the Twitter community and advertiser confidence.
The Twitter brand is iconic. The term tweet is in the English dictionary and part of everyday vocabulary. That's brand equity on a mega-scale. The idea that someone would choose to dismantle this brand equity, and be reckless with its community feels astonishing.
And as Musk's Twitter transitions to X, users are told that tweets will become Xs, which certainly doesn't roll off the tongue. Though it is getting tongues wagging for the wrong reasons.
Would Musk have been better off launching a competitor platform, rather than overhauling Twitter? Something new could have been exciting, and would likely see an acceleration in brand equity. But taking an established brand and changing it is always going to put brand equity at serious risk.
The question is, can Musk put the brakes on it, and turn around consumer and advertiser perceptions? Does he have a strategy to rebuild the community (and thus brand equity) that he seems so intent on destroying? Or will Musk drive the Twitter community to find an alternative outlet for its micro-blogging needs?
Only time will tell.
The takeaway here is this…
Brand equity is all in the eye of the beholder. The popular view will become the collective view, so nurturing your brand and audience in parallel is ever crucial, because one can’t survive without the other.
There’s no one-size-fits-all solution. When it comes to brand equity, a bespoke approach is demanded. A pin-sharp strategy, carefully-curated tactics, and a ground-level approach to audience relationship building will all set you on the right path. And reflection will allow you to flex and adapt to social, economic and cultural challenges as they arise.