What is Brand Equity and Why Does it Matter in Hospitality?

From my time at IHG in the global brand management team, the importance of brand equity was key in every decision we made affecting the 18 brands in our stable. 
Building a strategic, and compelling brand identity for your hospitality business is only the first step to success and competitive dominance. Brand awareness, i.e. having a firmly established reputable brand is the end goal. This is brand equity. 

When consumers are asked whether would prefer to buy from a product or service they know, 69% of consumers would choose the trusted brand over a cheaper alternative.

Strong brand equity is significantly correlated with revenues for quick-service restaurants, with brand awareness having the strongest effect.

Consumer purchasing decisions come from exposure to marketing messages that ultimately lead us to conclude if one is better than the other.
But you can’t achieve this without the foundations - good branding. It’s true. Trust us! 

It’s cumulative; and it’s vital to brands if they want to be consistently selected in a crowded marketplace. This pulling power is known as “brand equity”.

Why Does it Matter?

Whether you simply want to sell more, at higher prices, or hope to attract customers, brand equity matters. It even plays a role in the quality of employees you’ll be able to secure for your hospitality business.

Here are three key areas brand equity influences:

1. Increased Sales 

The purpose of a brand is to give the consumer something they can trust – a promise of what to expect, a statement of values and ideals that a consumer can align with their own.

2. Higher Profits 

Consumers are willing to pay more for brands they like – you only have to wander through any supermarket to see the price differential between branded and generic products. 

3. More Influence 

Just as being good looking reportedly gives people an advantage in life, brands experience perks from having high levels of brand equity. Plus, studies show that companies with high brand equity find it easier to recruit talent. 

How Do You Build It?

Brand equity results from a combination of two factors; 

Consumer awareness (brand building) 

Consumer perception (marketing / messaging / service). This means consumers are not only aware of your product/brand and its features, but also have associated (positive) views on what your brand stands for.

Brand equity is created through investment in branding, and brand communications and is amplified by economic growth, word-of-mouth and strategic partnerships. 

Why are we telling you this?

Brand equity is more important than ever, in fact evidence says that 75% of an average corporation’s value is now intangible (three decades ago it consisted of 95% tangible assets).

Essentially, if you don’t have brand recognition, and you don’t have customers willing to recommend you, your company won’t maximise its value. At Twobird, we want your hospitality business to succeed. We help to create your brand, deliver branded service experiences, and build long term brand awareness. Your brand equity increases ours, it’s a win-win type of thing!  So let us bring our big brand experience at IHG, with a personal touch to your small business, and we can watch your brand grow together. 

Laura Chapman
Founder of Twobird Brand Collective
Kicking your brand into shape (in a nice way)

 

Get in touch: Twobird Branding
www.twobird.co.uk
laura@twobird.co.uk
07747607950
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