Forget Brand Awareness, Focus on Brand Equity
McDonald’s, ToysRUs, and Comcast all have something in common, massive brand awareness. And yet the first is struggling to create a new identity, the second is now defunct, and the third is one of the most hated companies in America.
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“Brand Awareness” is a term that gets thrown around a lot in the business and marketing world. Whether you’re in a board meeting, conference call, or just getting lunch, inevitably someone will say “How are we increasing our brand awareness?”. There’s nothing wrong with brand awareness per se, but simply having mass amounts of brand awareness doesn’t mean anything today.
The McDonald’s Example:
In the US, McDonald’s has nearly 100% brand awareness. Babies practically come out of the womb already knowing what McDonald’s is. But that can actually be a negative. Over the past decade-plus there’s been a shift in consumer demand in the food industry, moving further away from wanting low-cost convenience and towards healthier foods. This has caused a major shift in product offerings and brand messaging from the entire fast food industry. From Wendy’s “Fresh, Never Frozen” campaign, to McDonald’s adding salads to its menu and announcing it will only sell cage free chicken eggs. These are all moves necessary to change consumer opinion. When you think of McDonald’s the first term that comes to mind is likely not “healthy”.
Brand awareness should never be a main priority for any company. Just because people know of a brand doesn’t mean that brand is valuable. What makes a brand valuable is the brand equity it holds with its current and potential customers.
What is Brand Equity?
Brand equity is the balance of value that a brand is giving versus receiving. Value comes in very few forms: money, time, energy, or entertainment. And in business you’re giving one of those things in exchange for another (usually money). As a brand, you can give away one or more of those things as method to gain brand equity.
If you want to build a powerful brand then your goal must always be to make the value balance uneven in your customer’s favor, always giving away much more value than you ever ask for.
This has been the modus operandi at MGR since day one and it’s what has allowed to grow almost entirely from word-of-mouth. And, this is how many iconic brands operate too, a prime example being Amazon, pun intended. Jeff Bezos, Amazon’s CEO, has made it clear for over 20 years that Amazon’s focus is always on the customer first; trying to figure how to make their lives better even if it’s at the cost of Amazon’s own bottom line. Same-day shipping, Amazon Prime, and many of their core offerings cost them A LOT of money. But by offering such radical amounts of value they now have a mass customer base that are always going to go to them first for anything they buy. Amazon provides so much value that millions of consumers – including myself – won’t buy anything before checking the price on Amazon first. That relationship and brand equity was built and earned by Amazon from two decades of always providing more value than what they ask for.
Providing value can be done through your offering, or in a supplementary form. This article you’re reading right now is a form of brand equity. We are a B2B company are giving advice to you, for free, without asking for anything in return. This is what supplementary value is, you’re not gaining value directly from our services in this case, but you are gaining value (hopefully) from us giving our knowledge away for free. Creating useful content is a common and very effective way to create supplementary value, which is why you see so many companies writing blogs, recording podcasts, etc. And it works whether you’re company is B2B or B2C.
Creating Value Through What You Sell
If you want to take your brand to the next level, then you need to maintain that uneven balance of value even when someone’s already paying you. This is what separates good brands from great ones. Again, let’s use Amazon as an example because they do this so well. They start by giving you the best possible price for something you buy, then they offer you free shipping, but wait now it’s free same-day shipping, and if there’s anything wrong with what you ordered they refund you no questions asked. They could have stopped at step one because they’re already providing a lot of value by having low prices, but because they keep pushing balance of value they’re able to earn incredibly loyal customers.
If you want to build brand equity you’ve got to constantly ask yourself “What else can I give that would make this person a customer for life?”. This is the same idea that Brian Chesky, co-founder of AirBnB, applied when he asked what would be a 6 or 7 star experience instead of 4 or 5 that is typical in hospitality.
When you push the balance of value consistently, your customers will take notice. It takes a dedication to this mindset to create truly remarkable brands, and the sooner you’re able to adopt the give first mindset, the sooner your brand will ascend to the likes of Amazon and AirBnB in the eyes of your customer.