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Home > Digital Marketing Blog > 5 Ways to measure your Social Brand Equity

5 Ways to measure your Social Brand Equity

5 Ways to measure your Social  Brand Equity
June 14, 2019

5 Ways to measure your Social Brand Equity

Jun 14, 2019
Kimberly Clark

Kimberly Clark is a content marketing specialist in IT & SEO, who helps clients increase their revenues by improving their organic traffic and building a powerful campaign through Google Adwords. She can be reached via email at [email protected].


Did you Google an unknown word recently? Did you WhatsApp your long lost college mate to catch up some time? Or use a Band-Aid to cover up that cut you got while playing a high-spirited match of football?

Do you notice anything shared in the above questions? That’s right, a brand’s name replaced the actual verb for the action to be done, yet had the same connotation. 

In the above examples, sending a text message was replaced by the name of a popular instant messaging service, i.e., Whatsapp. Similarly, the action of looking up something on the Internet was replaced by the name of the search engine giant, Google. 

If you own a company which provides certain products and services, you must be curious how much value your company derives from the customer’s perception of your brand name. In simple words, this is known as your social brand equity. 

Measuring your social brand equity is a crucial factor in driving your business forward. 

Three significant components can analyze brand equity:

1. The consumer perception of the brand
2. The effect this perception has on the company
3. The value of this effect on the brand

Determination of brand equity is highly subjective, as it is greatly affected by the emotions of people for a particular brand. Many tangible and intangible factors come into play in its determination.

As the owner of a particular company, here are 5 ways in which you can measure your company’s brand equity:

 

1. Evaluating the Brand Image in the Market

Evaluation of the brand image contributes to the first component, i.e., customer knowledge and perception of your company as a whole and is the most crucial factor which affects your brand equity. 

According to Neil Patel’s blog, these metrics can be broken down into two parts, i.e., the functional and the emotional associations of your brand. 

Functional associations essentially describe how your product or service is being used. Let’s consider the online dating sphere as an example. 

There are almost 15-20 websites and apps that provide matchmaking services based on the profile you upload. However, Tinder emerges as the dominant player in the online dating industry, with almost 8.2 million active users in the United States of America alone, as compared to 5.1 million active users on Match.com (Source: Statista). 

In fact, during conversations about online dating, Tinder pops up as the premier choice of an app. This makes online dating synonymous with the brand name of Tinder. 

Similarly, let's suppose you are the owner of a company aimed at providing learning management solutions. Ideally, you would want your customers to use your platform for designing video lessons for an e-learning website. 

If the customer remembers your brand at his/her first thought, you'd have achieved your objective of a strong functional association.

Evaluating the functional association of your brand with the customers can help you in improving the quality of the services you provide specific to those who make a majority of your customer base. 

Emotional associations describe the feelings of the customer once they’ve used your product. Positive or value-adding emotions include satisfaction, trust, excitement, etc. while negative or value destroying emotions include dissatisfaction, irritation, frustration, etc. These perceptions drive the growth or fall of your brand name among your target audience. 

As an example, let’s consider the famous coffee outlet, Starbucks. For some people, Starbucks represents the pinnacle of quality coffee with a soothing ambiance. They prefer to go to Starbucks even for that cup of black coffee which they can brew at home, thus increasing the value of the brand. 

On the other hand, Starbucks's price dissatisfies people who prefer having a simple home-brewed cappuccino than a drink that is crafted at an outlet like Starbucks. Such customers decrease the brand value and negatively impact the overall image of the company.  

Influencers on the Internet contribute to the brand image as well. Reviews of various products offered by a multitude of brands populate websites like YouTube and Instagram, which help people in deciding what they prefer to purchase. 

As a netizen, you too can become an influencer by checking out a few tips here.

 

2. Comparing the Sales of Your Brand with other Brands in the Same Category

This metric is one of the easiest to analyze as all companies keep a record of the sales of the different products they sell and the services they offer. 

Higher sales of the products of your company in a particular category as compared to other companies indicate that people prefer your brand over the others. 

Measuring this metric enables you to develop strategies to enhance your line of products to suit your customers better.

 

3. Evaluating the Earning Potential of your Brand in the Long-run

Your company might launch a revolutionary product once in a while, which might generate a ton of revenue in the first few months of its launch. 

However, short term profits do not improve your brand equity. The product you released might become obsolete if another company launches the same product with a few tweaks.

Thus, you must consider the earnings of your brand in the long-run. To do this, you might want to consider these questions:

1. Does your brand offer some uniqueness in customer-compelling ways?
2. Does your brand align with specific issues customers face?
3. Is your brand accessible to all?
4. Does your brand provide excellent value for the price charged?

If the answers to these questions have a positive tone, then your brand has a high earning potential and consequently, higher brand equity.

 

4. The Price Premium you Charge for the Brand Name

A white Armani cotton t-shirt can cost up to $200 while the same t-shirt from another brand can cost as low as $15. The $185 difference between the prices of the same product is known as the price premium charged for the brand name. 

Similarly, Apple’s ridiculously priced line of iPhones soars at a rate of over $1000, yet almost 60% of Apple’s revenue comes from iPhone sales

The manufacturing cost of an iPhone XS Max is estimated to be around $453, while the retail price soars at $999. Despite that, people are willing to buy the particular model of the iPhone, simply because it’s an ‘iPhone’! 

If you charge a high price premium and your sales are not affected dramatically, it implies that you have a solid customer base with prolonged lifetime value

 

5. The Share Price that Your Company Commands in the Market

If you become a publicly held company, people can invest in your company by buying individual blocks of your company, known as shares. The supply and demand concept forms the basis for your company's share price. 

A positive perception among people would cause them to invest in your company by buying shares. The higher the demand of the shares, the better the impression and higher the share price. 

However, if people fear losses on investing in your company, they start selling their shares, creating a higher supply than the demand, causing the share price to plummet. This ends up with severed brand equity of your company. 

Thus, using these 5 ways, you can measure your social brand equity and develop a roadmap to improve the same in the long run.

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