Marcus asks, "How do you measure brand equity?"
Huge question, but the answers have been well known for decades.
One of the best summaries of brand equity measurement comes from the Spring 1996 California Management Review. In that review, Professor David Aaker cites the following 10 dimensions of brand equity measurement:
- Price premium
- Perceived quality
- Brand leadership and innovation
- Perceived value
- Brand personality
- Organizational associations
- Brand awareness
- Market share
- Price and distribution indices
When this paper was written in 1996, based on a 1995 book, the Internet wasn't really a thing yet. Professor Aaker cited the exceptional expense and difficulty of measuring these dimensions. Today, thanks to our hyper-connected world, you can measure far more of these without ever leaving your desk. For several of them, the gold standard remains market research by a highly-qualified market research firm like Edison Research. For others, digital marketing analytics and customer data will provide the needed insights. Blend them together and weight them appropriately for your organization and industry.
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What follows is an AI-generated transcript. The transcript may contain errors and is not a substitute for watching the video.
On today's you ask I answer. Marcus asks, How do you measure brand equity? That's a big question.
The good news is that measuring brand equity is something that has been well known a number of really good answers on this. For decades, consulting firms have had their own proprietary blend of measures. One of the best summaries I think of measuring brand equity comes from a an issue of the California Management Review. This is the spring 1996 issue. Professor David Acker cites the following 10 dimensions as good ways to measure brand equity one price premium satisfaction, quality, innovation and leadership value personality Association awareness market share and
Distribution price indices so let's dig into a few of these
price premium is one that he and a number of consulting firms sort of rely on as the the gold standard for measuring brand equity, which is how much more of a premium does your brand command versus comparable alternatives.
For example, if you are looking at CRM software, how much cheaper does an alternative to Salesforce. com have to be in order for someone to say, Yep, I will choose that over over the reputation of Salesforce. com or how much more would you pay for a How much more do you pay for a soda that has a Coca Cola logo on it versus a generic so like, you know, the Rite Aid brand of soda, even though chemically they're probably going to be fairly similar. What is the premium that that I think commands loyalty is obviously one that you can match.
repeat business, how much people out will come back and buy from you
repeat customers things like that. And recommendation How much will people talk about your brand in a positive way and you can measure that
any number of ways. But your CRM is going to be a huge source of that data. price premium data. By the way, we can come from depending on where you sell on how you sell, that can come from market research, or it particularly on the b2c side you can use shopping API's to pull pricing data across the internet whereas previously you would have had a massive in store surveys quality, how much do people perceive the brand as being higher quality than its competitors, that something that you would measure through surveying, brand innovation and leadership
is in a leading brand and again, that's that
Serving unaided recall, if I were to ask you to name three coffee franchise, three coffee shop franchises, probably you're going to names Starbucks, Dunkin Donuts and one other and who that is, we don't know.
But almost certainly, Starbucks is going to be in one of the answers and and that's that that kind of leadership again, serving perceived value do do people perceive that your brand is worth buying over competitors brand is it doesn't provide good value for the money and that would be another
question you answer through serving
brand personality and reputation. Does the brand have a personality does is a brand aligned with the audience's personality? You'd measure that through sentiment about the brand
organizational association is one we're
brand itself has trust. So people say, I admire the company that makes this this product or service. So the if the brand is the iPhone, do people admire Apple as the organization and so there you're measuring portfolio strength along with the overall corporate reputation strength. Again, that's gonna be a lot of surveying, you'll get some you can get some qualitative data through social media,
but you're still probably going to need to do real market research to answer that question in a balanced way.
product differentiation is a part of that as well. Is this brand How does this brand differ from other brands?
Again, if you if you pick a
enterprise SAS Enterprise software appliance, how does this router differ from this router? is there is there a difference and if people can't explain the difference than you have a brand strength problem a brand equity problems brand or
awareness, you know, name the brand's this product less Have you heard of this brand? Do you know do have an opinion about this brand? That's something that you can actually use search data for searching for if people are searching for anti virus software, what brand are they searching for? Or is there no brand? And it's it's a commodity in which case you have a brand equity problem
market share based on market. How much of the market does that brand have name a search engine?
Your first answer is probably not in the within the United States is probably not Baidu,
your first answer is probably Google Now go to China and very different answer them. First answer will be Baidu. But even there people have heard of Google even if they may not necessarily have access to it. So certainly market share market share based on revenue as well. How much of the the available dollars does that brand consumed?
And then price and distribution indices which are less relevant than the internet age. Because back in the in when this paper was written,
functionally still not the internet era, even though the internet was starting to rise in popularity, but the percentage of stores a carrier brand or the percentage of people who have access to your brand. Well, now if you have a website, technically 90% of
the 45% of the planetary population technically has access to your brand. Now
that's where again, search data would be very useful comparing search data and traffic data to see what percentage of traffic among your peer competitor set does your website get versus competing websites? What percentage of available engagements and social media does your brand get versus other brands? So there's there are ways to do that with digital metrics. And that's an important point when the paper was written. He was 19
95 the paper. The paper was 1996 Professor ackers book was 1995 and he cited that you know measuring these these different dimensions will be extremely expensive. Extremely difficult.
Today, that's less true. It is a much different world. Now 25 years later, and measuring some of these particular digital metrics is a lot easier. Things like market share, things like price indices. Things like brand awareness are much easier to measure pricing premium through shopping API's depending on your marketplace. That said, for a good number of days, particularly around quality leadership value perception personality, the gold standard remains market research conducted by a highly qualified market research firm. I personally like Edison research but there are a number of them out there
but you still need to do the research properly. just slapping up any old survey and Survey Monkey
is not going to give you reliable intelligent answers you need, you need professional help for that. For the other measures, digital marketing analytics and especially CRM data, customer data will provide you a good chunk of the needed insights. So ideally a blend all those together and wait them to come up with an index that's appropriate for your organization in your industry. And if you don't have access to the funding, you can still put together some of these metrics
through things like search data and traffic data and stuff from from reliable third party data sources and come up with a blended brand equity measurement that is directional. It may not, you may not be able to slap $1 value on it. But you can put a directional number saying we have more brand strength this quarter than we did last quarter. We have greater branded search awareness for the company and for the products we have greater traffic data, we have generally more sentiment or more positive sentiment on social media.
Yeah, then we did the previous quarter. But again, the the gold standard is still market research. So use that as much as you can. So great question. Marcus is a very big question. So this is a very short answer to a very what is going to be a very, very detailed process for you to go through. As always, if you have questions, please leave them in the comments. Please subscribe to the newsletter and the YouTube channel. We'll talk to you soon. Take care
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