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How Brand Equity Matters in a Digital World

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Companies focus on short-term returns. They must: They answer to shareholders on a daily basis and investors are looking for returns to be instantaneous. This may stop brands from investing doing what they need to do to maximize their growth. In a quest for short-term gains, brands may even be encouraged to make decisions that could affect long-term brand equity. Digital is not about the next seven days. It is not just a game of clicks received during the time an ad is running. Campaigns and conversions can have a value in immediate returns, but must also be evaluated for longevity. It’s about creating digital relationships that go beyond a ‘Like’ or ‘Follow’; relationships that consumers will enjoy and find rewarding long after the brand’s investment. This creates a culture and a commitment between brand and consumer. These digital engagements pay dividends for brand equity, the value of the brand in its entirety. Ultimately, they drive additional clicks and conversions when the consumer may otherwise debate a choice. They create loyalty with a brand. When a brand screws up, its equity matters. Whether it is Apple releasing a poorly-tested app, or Target’s customer data breach, or even the Tylenol brand falling victim to product-tampering, every brand will, at some point, experience crisis. Today it merely takes one outspoken individual taking to a brand’s digital and social channels to create a problem that quickly grows to crisis proportions. In these instances, brand equity can be the healing agent. It can win acceptance of a sincere apology and quickly the public will forget what could potentially have been the brand’s ultimate downfall. The past decade has seen a rise in transparency and accountability that was very much driven by the public. Brands have had to embrace the concept to protect their brand equity. How do you move from clicks and conversions per dollar invested to a long-term return? Invest in the relationship before you ask your customer to do so. Starbucks creates avenues for new artists to be introduced to the world. They provide free wifi, a cultured connection to great products, even free music streaming. There’s a perceived value in the comforts they create and provide in their stores. This is even in their messaging. In a letter in 2013, Starbucks CEO Howard Schultz, wrote, “From the beginning, our vision at Starbucks has been to create a ’third place’ between home and work where people can come together to enjoy the peace and pleasure of coffee and community.” What could possibly be a better statement of brand position? They’ve stood up on issues from gay rights to gun control. Their leadership takes responsibility, embraces open and honest discussion. Starbucks’ brand equity is high. There’s more to digital than free wifi and streaming music, however. Investing in digital may include easy-to-pay mobile platforms which include the free music of the week picks. Providing tools to consumers is a great digital extension. Here are some companies that have invested to maintain relationships: Zillow – This real estate site provides apps to help with financing, mortgage calculation and more. Johnson & Johnson – This massive consumer products company invests significantly in apps for health, fitness and nutrition, among others. IKEA – The Swedish furniture-maker famous for flat boxes offers many tools for room layout and design. These companies are not profiting from the apps they develop – not directly, at least. They are investing in building relationships with consumers. If brands think short term, how will they ever choose to invest in long-term relationships? A proper digital strategy will leverage the short-term clicks to build long-term relationships. All digital activations, from PPC campaigns to e-commerce purchases to app downloads and email campaigns, must have an audience-nurturing component to build the relationship. Those relationships are your brand equity in the digital space.   Photo credit: woody1778a/flickr/CC BY 2.0
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