Brand Equity 101: A Primer for D2C Brands

Perception isn't always reality, but when it comes to business, it can build a narrative that's difficult to refute. What the general public, let alone customers perceive to be true about a brand can have massive repercussions for their bottom line. During the holiday season, Pelaton released a video ad about a husband gifting his wife an indoor exercise bike for Christmas. There was a swift backlash to Peloton's ad, with many calling it out for being sexist, classist, and feeling like an episode of Black Mirror. This led to the brand's stock dropping to over 10%, costing close to $1 billion. The intent might have been innocent, but the impact was severe to Peloton's brand equity.

Brand equity is a top priority for any organization because it's a major indicator of the overall health of a business. According to a survey from Brand Keys, 79% of CMOs and brand managers stated protecting their businesses' brand equity is an issue that keeps them up at night. It's understandable considering how quickly a single tweet could derail years of goodwill with customers. Direct-to-consumer (D2C) brands have been tossing around this buzz word a lot lately, but many businesses might not have a full understanding of what it actually is.

What is Brand Equity?

In the simplest terms, brand equity is the value of a brand — it's determined by a business's reputation, both from a market and customer perspective. For customers, this can mean everything from brand values, quality of products, to customer service. If the general public holds a brand in high regard, then it has solid brand equity. If a business is swirling in controversy, it can have bad brand equity.

For example, Boeing has been combatting a series of questionable actions and poor decision-making surrounding plane crashes, cover-ups, and massive layoffs that happened on the same day their former CEO's $62 million severance package was confirmed. According to financial analysts, these corporate crises have cost Boeing approximately $1 billion a month. That's a lot of self-inflicted damage.

Improving Brand Equity

Now it's not all doom and gloom. Many D2C brands have enhanced their reputation through marketing initiatives (such as personalized marketing, customer advocacy programs, and referral programs) that not only help strengthen the bond between a brand and customers but help increase customer lifetime value (CLV). Although not every D2C brand out there as the resources or bandwidth to dedicate towards these types of initiatives, there are other ways to improve brand equity.

Brand campaigns

Brand campaigns are built to help change the perception of a business, boost awareness, promote brand values, and establish a business's positioning. Whereas marketing campaigns are tied to more specific metrics, such as click-through rate (CTR) and website traffic, brand campaigns are focused on creating a narrative. When implemented effectively, they can create positive buzz for a brand. Here are a couple of examples of brand campaigns that helped increased brand equity:

Nike’s Dream Crazier Campaign

In early 2019, Nike released a video ahead of the FIFA Women's World Cup that celebrated female athletes who've overcome adversity, broken barriers, and inspired future generations of female athletes. The video juxtaposed narration from Serena Williams with clips of female athletes in an effort to challenge stereotypes that women have been held to. The video was a smashing success: As of June 3rd, Nike’s Twitter post has had 31.6 million views and inspired other videos, including one from Ellen DeGeneres. The commercial is an extension of the Emmy-winning "Dream Crazy" campaign (which featured a video with Colin Kaepernick). That campaign was launched in the Fall of 2018 in honor of the 30th anniversary of the original "Just Do It" campaign and produced $7.6 billion in earned media value. In short, challenging stereotypes pays!

https://www.youtube.com/watch?v=IiCDRNW5A84

Burger King’s Whopper Neutrality Campaign

There aren't many things that can sound more mundane than net neutrality, but that doesn't take away from its importance. Everyone from John Oliver to Rolling Stone has covered the topic, making it one of the most important news stories of the past few years. Even Burger King joined in the discussion and built an entire campaign around it. On January 24th, 2018, the fast food giant launched a series of video ads that featured employees withholding Whoppers for long periods of time and only offering to serve the burger faster if customers were willing to pay a hefty fee.

https://youtu.be/erSgUag9F_4

Employees would then use the opportunity to school customers on net neutrality and describe the similarities between withholding Whoppers and limiting internet access. Burger King's spots were an immediate hit; the first video spot received over a million views within 24 hours. Turns out, touching on controversial topics and taking a stand does resonate with customers.

Are you looking to increase the brand equity of your business? Check out Turning Happy Customers Into Brand Advocates to learn how to strengthen your standing with customers.

Last updated on August 16th, 2022.