Brand Architecture series: Part 3 – Big Brand Architecture decisions begin by assessing brand equity
Updating a brand architecture for your business can sometimes feel like a home renovation. And, as with any remodeling process, it’s important to evaluate the existing state of whatever you want to change. Because before you decide to tear out that foundation, re-do the layout, or add on a new wing, you need to know: how solid is the structure that you’re working with?
Enter brand equity. This single metric—defined as the value originating from consumer perceptions of a brand instead of the brand’s actual offering—can carry serious weight in the realm of brand architecture. After all, having a full understanding of your brand’s equity will help you decide what to keep, what to toss, and how to refresh your brand architecture for maximum success. The challenge? At times, brand equity can feel a bit nebulous. It’s easy to make unfounded claims about it without supporting data. And with so many different factors feeding into this comprehensive element, it can be difficult for practitioners and marketers to realize what brand equity actually consists of—and how to accurately evaluate it.
In the following piece, we’ll take a closer look at all things brand equity—and show you how to leverage it in your future brand architecture.
Breaking it down: What is brand equity?
At its core, brand equity is really a measure of reputation. It’s the sum of all perceptions, associations, and experiences people have around a brand when compared to both a generic equivalent and its main competitors.
Take a drug like Tylenol, for instance: The Kenvue (formerly Johnson & Johnson) acetaminophen brand delivers the same ingredients and benefits as other generic pain relievers, as well as brand-name versions like Vick’s Nyquil, Reckitt’s Mucinex, and Novartis’s Excedrin. Yet a study conducted by University of Chicago researchers showed that consumers were 26% more likely to purchase a name-brand like Tylenol than a generic option. And 2019 data demonstrated that Tylenol was the second-most popular pain reliver brand in the US—behind only ibuprofen-based Advil—and the leader among acetaminophen-based brands with nearly $450 billion in sales.
How does brand equity impact brand architecture?
Tylenol’s success is a result of brand equity—an aggregate assessment of dimensions like awareness, familiarity, choice, likelihood to recommend, loyalty, perceived quality, and intellectual and emotional brand associations. The higher the equity, the better the brand or product performs against the rest of the market.
Logically, this means that companies with high brand or product equity will seek to preserve this as they update their brand architectures. Business leaders want to avoid burying products or brands with the most equity underneath new-to-market names, because their “star players” will influence purchasing behavior more than others. It’s why, for example, Tylenol has launched an extended portfolio under the Tylenol name (think: Tylenol Extra Strength, Tylenol Cold & Flu, etc.). Here, brand equity has directly influenced architecture—ensuring existing brand value trickles down to new products.
How do you analyze brand equity?
Since brand equity plays such an essential role in brand architecture decision-making, it’s important to have a confident grasp on its strength across your portfolio. There are a few ways to approach this:
- Conduct a quantitative brand equity study
For instance, when consumers think of the category, is your brand top of mind? How do they rank it in relation to others in the space? How likely are they encourage a friend to try your product? By posing these types of questions to a large audience—and providing them with quantifiable response options—you’ll receive a trove of useful data that can bring the sometimes fuzzy concept of brand equity into clear view. It is also important to include questions around permission to change. This will help separate offering from brand perceptions. If your overarching goal is to simplify the portfolio as much as possible, these types of questions will help identify how disruptive a brand change will actually be, and also allow you to measure how perceptions might change, positively or negatively, should you streamline and unify the portfolio.
This type of data is critical to reducing subjectivity and finding the optimal way to align your portfolio with your overarching business goals. Quantitative questionnaires are the most reliable and bulletproof form of brand equity research you can execute.
- Coordinate qualitative in-depth interviews (IDIs)
While quantitative studies deliver data at scale, qualitative brand equity research brings other unique benefits to the table. By connecting with individuals in a one-on-one setting where they can discuss topics in an open-ended manner, you’ll have a deeper and more nuanced picture of the story your data is telling.
Six to eight interviews per brand should suffice at minimum, though it’s critical to diversify your interview pool as much as possible. Having a representative mix from different demographic and psychographic groups for B2C brands, or different markets for B2B brands—for example, speaking to both small and large buyers, or across various industries and regions—ensures you’ll get a more balanced idea of how they view your brand.
Ideally, qualitative interviews would supplement, not replace, your quantitative research. However, if you don’t have the resources to commit to quantitative research, then initiating in-depth interviews at least enables you to infer brand equity, though the resulting information won’t be as rigorous or robust.
- Look inward for answers
Since your customers are your target audience, they’re usually the best people to engage with during research. But your employees and internal stakeholders also know your brand inside and out—and often know your customers just as well. If you’re already implementing quantitative and qualitative customer research, internal work sessions can further corroborate this data. But when you’re unable to do the former, they’re also a great back-up option to at least establish a brand equity baseline.
This internal research doesn’t have to follow a set process or check specific boxes—it can be as creative and wide-ranging as you want. Whether it’s by holding mock interviews with your sales team acting as customers, organizing cross-disciplinary workshops to map the buyer journey, diving into desktop research to find third-party media articles or consumer studies that may be relevant to your company, or perusing social media and review sites to hear what customers are saying about your brand: there’s no right or wrong way to uncover brand equity data—even if you’re unable to talk to customers themselves.
Learn more: The power of humanizing brand tracking research
Other dimensions to consider beyond brand equity
From single brands with multiple products to behemoth holding companies with extensive brand portfolios: brand equity impacts how all of these businesses choose to present and share their offerings. Because when your brand or product is more well-known, more well-regarded, more frequently selected, and so on, it simply makes more sense to give it a prominent position in your organization’s hierarchy.
That being said, brand equity is not the only driver of brand architecture. Other factors—both big-picture and logistical—should also be taken into account when determining how to arrange your portfolio:
- Permission to change
As mentioned earlier, just because clients and consumers are familiar with your brand doesn’t mean they would care if it evolved. Though it’s a substantial part of brand equity, recognition alone shouldn’t bar a reorganization of your brand architecture. Especially in B2B organizations, customers are often more concerned about their relationships with a company’s team than the brand itself. Which means as long as your service remains the same or better, customers will keep buying—no matter where your products or sub-brands live on your company website, or how they appear in your marketing strategy. This becomes more of a communications challenge, bringing your customers along the journey of change.
- Alignment with future vision
No matter how much equity you’ve cultivated across your products or brand, if your overarching business strategy shifts, it may become necessary to sacrifice this equity—and transform your brand architecture to better align with your future vision. For example, if a technology company transitions from a product-based offering to a services and solutions-oriented one (i.e., SaaS), it won’t matter how popular its previous products are. They—along with the brand architecture—will need to adapt to fit a new model. There are strategies and tactics to transfer this equity and minimize disruption, but your brand architecture should support your business strategy, not the other way around.
- Legal and regulatory situations
Depending on where your business operates, there may be regulatory issues to think through before changing your brand. For instance, if your current brand or product enjoys certain legal privileges in a specific region, those may not extend if the brand were to be reorganized or renamed within your portfolio. Or perhaps a name change would require an extensive and expensive regulatory process that makes the architecture strategy prohibitive. Because these rules and directives can have a significant effect on the value of your brand, they will also determine how much freedom you have to revisit your brand architecture.
- Competitive considerations
Another practical matter to consider is ownership of any important brand names. Let’s say you own two fairly similar products with distinct names that each carry almost equal brand equity. As your organization grows, your instinct may be to consolidate these two products into the same family under the better name, so you can streamline your brand architecture and make it easier for customers to interact with your portfolio. But retiring a product name, even if it has less equity than others, could create an opening for your competitors to adopt it down the line—and transfer that equity to themselves. In these cases, sometimes a defensive approach is the best offense. This factor alone shouldn’t determine your overarching architecture strategy, but it is an important consideration so you can develop strategies to protect your competitive position.
The amount of equity your brand or product possesses will undoubtedly have implications on your brand architecture—and may even be the main determinant when making critical calls about your portfolio structure. But while measuring brand equity is vital, it’s not the end-all-be-all. Other matters, from strategic to regulatory considerations, should also be used as a tool when navigating your next steps in the world of brand architecture.
Interested in learning more about brand architecture and how your organization can benefit from it? Reach out to us.