• Monday, July 15, 2024
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BusinessDay

Brand health

Brand metrics

Brand health is essentially the overall well-being of a brand, taking into account various factors. It reflects how consumers perceive and interact with a brand, as well as its performance in the market.

Think of it like the fitness level of a brand. A healthy brand is strong, resilient, and performs well, while a weak brand suffers from negative perceptions, declining sales, and struggles to compete.

Here are some key components of brand health:

Brand awareness: How well people know your brand.

Brand perception: How people view your brand, its values, and its products/services.

Brand reputation: The overall public image of your brand, based on past experiences and current performance.

Customer satisfaction: How happy and loyal your customers are.

Brand advocacy: How likely customers are to recommend your brand to others.

Market share: How well your brand performs compared to competitors.

Measuring brand health helps you understand what’s working well and where to improve. By tracking key metrics and conducting surveys, you can identify areas for growth and develop strategies to build a stronger, healthier brand.

You can measure and track the health of your brand using a set of metrics that show the overall well-being and strength of a brand within its market niche and among its target audience.

It shows how your — existing and potential — customers perceive your brand and how much they trust it over your competitors. In a nutshell, it’s a pulse check on your brand’s image, positioning, and emotional connection with your audience.

If you aren’t already convinced that brand health is a vital measure for your next brand audit, keep reading.

Why is Brand Health Important?

You have to understand that brand health isn’t just another marketing metric. It reflects the overall success of a business in key areas such as new sales, customer retention, and even new talent acquisition.

For instance, think about Apple. A strong, well-established, healthy brand. Synonym for innovation, luxury, quality, and a dream job for thousands of professionals. Let’s extend the example of Apple to four key areas where we believe that brand health matters greatly.

1. To Increase Sales

Brand health is crucial for increasing sales as it directly reflects consumer perceptions and trust. When a brand is perceived positively, it attracts more customers, garners word-of-mouth recommendations, and boosts consumer confidence in purchasing its product or service. For example, Apple reported 394.33 billion U.S. dollars in revenues in 2022, making 2022 the most profitable year for the company since 2005.

Apple is considered one of the most valuable brands in the world. In spite of the steep pricing, that healthy brand reputation makes the difference between a consumer choosing an iPhone over a competitor’s smartphone.

2. To Expand Your Market Share

Also, a healthy brand is necessary to gain ground in the market. A healthy brand is not just recognisable but also trusted and preferred over the competition. As the number of new customers increases, so does the market share as well.

When your audience has a positive perception of your brand, they’re more likely to choose it over your competitors. So, it attracts new customers, thus steadily widening the company’s market share.

Furthermore, a strong brand can challenge existing competitors and discourage potential new ones, making it a strategic asset in capturing and maintaining a larger slice of the market pie. For example, although the whole smartphone market declined by 13% at the beginning of 2023, Apple managed to increase its market share by 3%, by the end of the year.

3. For Better Customer Lifetime Value

Brand health is integral to enhancing customer lifetime value (CLV). When your customers are satisfied with your brand, they’re more likely to make repeat purchases, and to engage with the brand across various offerings, like new products, and over extended periods.

This relationship translates to longer customer retention and increased spending over their lifetime. In essence, brand health solidifies a bond with customers, encouraging them to continually choose the brand, thereby maximizing the total value they bring to the company.

In the Apple example, well, we all have that fanatic iPhone enthusiast friend who buys their new iPhone every year, the second the announcement of its release hits the news.

4. To Charge Premium Prices

Brand health is instrumental in justifying steep pricing. An established, well-perceived brand associated with quality products and reliable services enables the company to raise its prices. It’s not uncommon for consumers to be willing to pay a premium price for brands they perceive as top-tier with a unique value proposition — ding, dong, iPhone!

In fact, brand health elevates the perceived value of the product or service. That’s how a company, like Apple, can charge more while maintaining customer loyalty as consumers believe they’re getting quality or prestige from their purchase. Particularly in the iPhone case, Apple continuously increases the price of the new iPhone model every year, from $499 for the first-ever iPhone back in 2007, to $829 for the iPhone 14 in 2023.

Last line

So, you see that brand health is more than just another fancy marketing term. It’s a success measure of your whole business efforts.