- Circana
- 4 hours ago
- 4 min read
By Donna Wydra, Principal and Team Lead, Global Consumer Solutions, and Ryan Kocher, VP, Client Sales and Insights
Table of Contents:
This kind of informed equity is based on a rigorous framework that connects people’s attitudes and perceptions with their behaviors. Advanced data analytics, technology, and expertise combine for powerful solutions that allow companies to align their strategies to shopper sentiments and habits.
What Factors Determine Brand Equity?
Although brand equity certainly includes opinions, it isn’t limited to personal views. Real brand equity sits at the intersection of perception and behavior. Perceptual equity includes what consumers think about a brand, encompassing salience, relevance, and emotional connection. Behavioral equity refers to the syncing of consumer attitudes and actions, spanning reach, penetration, frequency, value, loyalty, and switching, among other factors.
Taken together, these two pillars provide a true understanding of a brand’s status in the marketplace. Using a holistic, data-driven approach, businesses can move beyond traditional sales funnels and view equity as a dynamic relationship between what consumers say and do, and then plan and react accordingly.
How Brands Can Accurately Track Performance Over Time
Especially in competitive, value-centric times, static measurement isn’t enough to gauge how a brand truly resonates with consumers. Businesses need continuous, real-time or near real-time visibility into the health of their brand’s reputation to make agile decisions based on what consumers think and buy.
Brands use AI-based dashboards to track consumer behavior shifts
In the artificial intelligence (AI) era, AI-based dashboards swiftly alert brands to notable changes in consumer behavior. This capability allows brands to immediately take action, such as launching a survey to understand a drop in demand or executing a media buy to counteract a decline.
Marketing mix modeling provides long-term measurement for incremental ROI
To assess longer-term performance, marketing mix modeling (MMM) provides a view of incremental ROI, separating the impact of brand identity from short-term promotional spikes. This helps a company see how brand-building activities contribute to base sales over time.
Consumer surveys help explain the “why” behind buying behavior
Brands can also deploy focused surveys to uncover why a shift occurred. Surveys measure brand awareness to see if marketing efforts are widening the top of the funnel and check mental availability to determine if the brand remains front and center in the shopper’s mind. Other comprehensive benchmarking tools enable brands to check their performance against the total category and ascertain if they’re losing ground to other competitors or to private label products and portfolios.
How Does Brand Equity Impact Long-term Growth and Performance?
Brand equity has long been a leading indicator of growth and performance. Investing in holistic brand equity assessments that include both attitudes and behavior helps maintain or improve overall market position.
As they evaluate brand equity for the sake of their own business and to enhance relationships with retailers, companies can examine the links between churn and penetration. Churn is often an early red flag for equity issues, so manufacturers would be well served to analyze customer cohorts including new buyers, retained buyers, and lost buyers as defined by purchase behavior. For example, losing a heavy buyer is more damaging than failing to acquire a light buyer.
Although price often leads to churn, it’s helpful to look at the broader value equation. Most lost buyers have the same perception of a brand as current buyers: They switch because the price-value equation no longer makes sense to them.
As private label sales continue to grow, delivering on the price-value equation is even more crucial. If brand equity is weak, retailers don’t have an incentive to prioritize one brand’s shelf space over their own higher-margin store brand. Shoppers, meanwhile, might decide to purchase a store brand alternative because they’re on a quest to save money where they can. Strong equity compels retailers to stock a product because consumers demand it.
How Can Brands Address Issues with Brand Awareness and Performance?
If metrics reveal a decline in brand equity, a manufacturer must act decisively. Taking a diagnostic approach rather than a one-size-fits-all marketing blast is a more effective reaction.
This diagnostic approach usually begins with a look at internal behavior to see if and where penetration is declining and to determine if a brand is properly assessing at-risk buyers. Once a behavior gap is identified, a brand can use a targeted survey of the specific cohort or cohorts involved and ask why they’re switching. This way, a company can see if an issue is related to product attributes, price perception, or a lack of mental availability.
Having such insights empowers brands to then execute distinct solutions for specific cohorts such as franchise consumers or at-risk consumers. For at-risk consumers, the goal is to make a brand exclusive, perhaps through a media plan aimed at that group to reinforce a unique brand proposition. For lost buyers, brands could identify if a consumer left due to a value issue and then consider options like making changes to package size or function. Brands could also respond with targeted promotions to re-engage in consideration. If the issue is mental availability, a business can invest in broad-reach media to ensure that the brand comes up top of mind or close to it.
After determining behavioral gaps and executing responses, measurement is pivotal to brand equity strategies. Companies can use AI dashboards to track target cohorts and see if a promotion or ad changed the behavior of the at-risk group. They can also determine if penetration stabilized. From there, they can adjust or maintain their efforts.
Building Tangibility into Brand Equity
By measuring both perception and behavior, companies can take guesswork and assumptions out of brand management. Manufacturers can partner with Circana to get that more holistic picture of brand equity through tools such as our Complete Consumer solution, Marketing Mix, and latest AI dashboards. These solutions fuel brand growth, thanks to a cycle where data informs strategy and strategy drives measurable, long-term financial results.
