Guide To Using The Customer-Based Brand Equity Model
Updated 7 August 2023
Understanding how customers think and feel about products and services can help businesses build a strong brand with excellent brand recognition. Customer-based brand equity is a leading framework that helps organisations deliver a positive customer experience, improving brand image and value. Knowing how to apply the customer-based brand equity (CBBE) framework can help marketing and sales professionals optimise the brand image to achieve sales and marketing goals. In this article, we explore the customer-based brand equity model, explain how to apply it and share an example to help you better understand this framework.
Please note that none of the companies, institutions or organisations mentioned in this article are associated with Indeed.
What Is The Customer-Based Brand Equity Model?
The customer-based brand equity model is a branding framework that explains the different ways a company can build strong brand value by focusing on customer expectations and designing product and marketing strategies based on customer requirements. Kevin Lane Keller, a famous marketing professor, introduced this model in his textbook Strategic Brand Management to explain the strong connection between a brand and its customers in building positive brand equity. Also known as the Keller model, the CBBE is a four-stage pyramid with brand identity at its base and brand resonance at the top of the pyramid.
The concept behind the CBBE framework is that businesses that focus on how customers think and feel about their products and services can build a stronger brand in the long term. Creating optimised brand experiences helps organisations build positive customer thoughts, beliefs, feelings, opinions and perceptions about their brand. Strong brand equity offers several benefits, including increased sales, enhanced customer trust and loyalty.
How To Apply The Customer-Based Brand Equity Model?
You can use these steps to apply the CBBE model and strengthen brand value:
1. Identify brand identity
The first step to applying the CBBE model is to build brand awareness amongst customers and ensure that brand perceptions are as expected at all stages of the buying process. Here are a few tips that can help you improve brand awareness:
Use market research strategies to identify the target customers. Gain a clear understanding of the target customers and learn how they perceive the brand.
Discover the crucial factors that help customers choose a brand over its competitors.
Evaluate if customers know the brand's unique selling proposition (USP) and whether they rely on the USP to make their buying decisions.
At the end of this step, you can understand clients' perceptions of a brand and discover the problems customers have with the brand image. This helps you to refine and optimise brand perceptions in the following steps.
2. Communicate brand meaning to customers
Use these two factors to share and communicate the brand's meaning to customers:
Performance: This defines how well a product meets customer requirements. According to Keller's model, performance comprises five categories, including product reliability, serviceability and durability, product features and characteristics, product style and design, service efficiency and effectiveness and price.
Imagery: This refers to how the brand meets the customer's needs on a psychological and social level. A brand can meet a customer's requirements directly based on their experiences with a product or service or indirectly by word-of-mouth marketing from other customers.
Once you have identified the brand's performance and imagery, the next step is to create and communicate the unique brand personality and meaning to customers. For example, consider a company that manufactures high-end outdoor clothing and gear. The brand's performance is based on the reliability, durability and style of its products. The brand imagery is based on the company's commitment to social causes, like reusing and recycling. Customers feel good about purchasing the company's products as they perform well and contribute to a social cause.
3. Evaluate brand response among customers
According to the CBBE model, the typical customer response to a brand comprises judgements and feelings. The model classifies judgements into the following sub-categories:
Quality: A customer judges a product based on its actual and perceived quality. Identify the ways to improve both these qualities to improve brand response.
Credibility: Customers evaluate brand credibility via expertise, trustworthiness and likeability. Discover the methods to improve brand credibility in these three areas by optimising marketing and brand packaging.
Consideration: Customers judge product relevancy based on their unique needs. You can use the consumer research data gathered in step one to identify the customer's needs and evaluate if the brand addresses these specific needs.
Superiority: Customers assess a brand's worth and authority by comparing it with related brands. Evaluate how you rank against competitors and check if you offer specific features or characteristics unavailable in competitor products.
Besides judging a brand's products, customers also respond to brands based on how it makes them feel. According to Keller's model, brands can evoke six positive feelings in customers. This includes feelings of fun, warmth, excitement, self-respect, security and social approval. You can identify the feelings a brand produces in the target customers and focus on it in future marketing campaigns.
4. Focus on brand resonance
Brand resonance is at the top of the brand equity model pyramid as it is the most challenging feature. A company achieves brand resonance when customers feel a psychological bond with the brand. Keller's model classifies brand resonance into four different categories, including:
Behavioural loyalty: This includes regular and repeat purchases.
Attitudinal attachment: This is when customers consider a purchase as special and love the product or service immensely.
Sense of community: This is when customers feel a sense of belonging with company representatives and other customers.
Active engagement: This is when customers are actively engaged with the brand and its products and services, even when they are not actively consuming it.
This stage aims to strengthen brand resonance in the four categories. For example, you can consider creating a customer loyalty reward programme to encourage repeat purchases to improve behavioural loyalty. Similarly, you can encourage customers to participate in giveaways on social media channels to promote active engagement and build customer community.
Example Of Applying The Brand Equity Model
Here is an example of applying the brand equity model to help you learn more:
DrinkMe is an organic brand that sells premium ayurvedic beverages manufactured using fair-trade practices. Though the company sells superior products, it has not yet achieved the desired sales and customer loyalty goals. The brand decides to implement the CBBE framework to increase sales and improve brand recognition and reach. Here is how they do so:
Step 1: Brand Identity
DrinkMe's target customers are mid-to-high-income, socially conscious customers. After a comprehensive market analysis, the marketing department realises that while they are advertising to the right demographics, their marketing efforts are not fully addressing the target audience's specific needs. They decided to change the core message from healthy, delicious ayurvedic beverages to healthy ayurvedic drinks manufactured using sustainable and fair practices. This new message is more meaningful and relevant to their target audience.
Step 2: Brand meaning
Next, the marketing department examines the product philosophy and analyses how the company communicates the product's core meaning to its customers. The product's unique selling proposition (USP) is that it is of higher quality than the competition's product and offers proven health benefits for regular users. After assessing the effectiveness of the customer service department, the company finds out many customer representatives lack proper training to highlight the product's USP to potential customers.
To overcome this drawback, the brand organises a comprehensive training programme for customer service agents to improve their responses and handle customer queries, feedback and complaints more efficiently. The marketing department also decides to share personal stories from the fair trade farmers who grow and manufacture the raw materials for the company's beverages. They share these stories on social media and the company's website to educate customers on how the company is helping marginalised farmers earn a sustainable livelihood. This campaign aims to build an emotional connection between the brand and its target audience.
Step 3: Brand response
After analysing customer response to the brand, the marketing department realises that perceived brand quality might be an issue. Though the beverages are of high quality, the product packaging and sizing use plastic and do not meet the expected standards of the target demographic. The company decides to upgrade its packaging by switching to eco-friendly packaging materials and soy inks. The company also decides to enhance its products' credibility by registering for a Food Safety and Standards Authority of India (FSSAI) licence.
Step 4: Brand resonance
The company surveys existing customers to understand the core values they look for in a beverage brand. They learn that their target demographic cares deeply about sustainable and fair-trade practices. The company decides to promote the organisation's sustainability and fair-trade efforts by participating in suitable trade events. The marketing department also sets up an online forum where customers can discuss their views and opinions about sustainability and fair trade. This helps to establish the brand as a leading authority in fair trade and win customer trust and loyalty in the long run.
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