We live in a world where brands are becoming household names. You can Google things to learn, Photoshop pictures to improve (or worse), and don't even get me started on the infamous Netflix and chill. If you want to become the next Sharpie or Kleenex, you need to build your brand equity early.

Before we tell you the “why,” let's address the “what.” Brand equity it's a somewhat intangible measure of your brand's recognition, trust and goodwill. However, despite its fleeting nature, it has a direct impact on your sales, as sustainable branding can. increase your income with 23%.

You can use many metrics to measure your brand equity, including brand awareness, associations and loyalty, customer lifetime value (CLV), marketing ROI and even overall audience sentiment.

With the semantics out of the way, let's explore six reasons to build your brand equity early.

1. Establish recognition and differentiation

Unless you've been living under a rock, you've probably heard of Coca-Cola, the behemoth soft drink that has not only become ingrained in our daily lives, but has also become the unofficial symbol of Christmas. It is easily recognizable, googleable and generally has a good reputation.

Compare that to something like DRY, which boasts one 18% recognition in its home country, the USA, and has no presence elsewhere. It's not easy to google because of its name and the existence of Canada Dry, a beer brand with roots from 120 years ago (still alive and kicking). It may be a good product, but it is fighting an uphill battle against its own brand.

No matter how good your product is, 59% of people will default to something they're familiar with to try unfamiliar brands, so it's not enough to make an outstanding product – you also have to make it stand out from all the competition.

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2. Builds trust

Clean though recognition it's not enough – although everyone knows them, you don't see people lining up to buy ISIS's latest summer collection.

While word of mouth is important in gaining an initial sale, your commitment to maintaining the trust placed in you will earn you continued patronage. 67% of customers accept that a good reputation will get them to try your product. But they won't keep using it unless you earn their trust.

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3. Increases brand value

While brand value is usually calculated from concrete metrics, such as the value of its assets, some more ephemeral metrics, such as brand equity, significantly affect its cost.

Creating positive brand equity it is a long process. As Warren Buffett said, “No matter how great the talent or effort, some things just take time. You can't deliver a baby in a month by impregnating nine women.”

Throwing more money at marketing does not guarantee an immediate sensation. Additionally, there have been many cases where teams with limited marketing budgets, such as Cards Against Humanity or Dollar Shave Club, managed to go viral almost overnight. So, the earlier you start investing in marketing, the higher your chances of breaking through the noise.

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4. Commands higher prices

On the contrary, if you want to take advantage of you established brand, high equity allows you to command a higher price for your products or services. Customers will not bet on paying more for a higher quality product.

The incredible equity allows Balenciaga to sell seemingly meaningless products like $1,850 trash bag OR $4,400 Band Bracelets (along with shock value and viral PR, but that's beside the point).

5. Reduces marketing costs

Ok, bear with me on this one. Growing your brand from scratch takes a lot of time, money and creativity, period. However, once you get the ball rolling, you'll start to see higher returns from your marketing efforts.

On average, she gets the customer eight touches (this number may vary based on your industry) with the brand to make a purchase, meaning they have to hear or see your ad eight times before they actually commit. However, user-generated content helps reduce that number and is, in a way, a free “touch”.

The math is simple: the less contact the customer needs convertthe less resources you have to spend, even if the initial investment is large.

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6. Improves crisis resistance

Crisis resilience is a two-way street.

On the one hand, when your brand faces a crisis, good capital will help you stay afloat, as you will have a steady flow of loyal customers.

On the other hand, when the crisis is more global and affects the purchasing power of customers, positive equity will make you a prime candidate for acquisition. After all, why would people try something new if they know your brand offers quality products at good prices?

Of course, the way crises affect different industries varies greatly. For example, Chanel felt neither the recession nor the COVID-19 pandemic, showing a 23% revenue growth.

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CONCLUSION

Building brand equity is a long process. After all, the earlier you start fostering trust, loyalty and recognition among your customers, the better. A well-established brand brings in more revenue, has more competitive advantage and can weather any storm, making it easier to run your business and experiment with new tactics.