Over the past few years, brand equity has emerged as a key strategic asset. CEOs in many industries now see their brands, whether product, service or corporate, as a source of strategic control and a way to build stronger relationships with customers.
The importance of the brand as a strategic asset is broadly accepted, and top management agrees, to varying degrees depending on the nature of their industry, that brand equity has to be developed and leveraged. Strong brands are recognized as intangible assets that influence investment decisions and market capitalization, and as leading indicators of future revenue streams. When the economy stalls, most companies take a closer look at their physical assets and assess what is critical and what is expendable or can be deferred. However, they are often not as careful regarding investments needed to support their intangible assets, including brands, and slash them perfunctorily, without thinking about the damage that may occur, because at these times, these investments are suddenly viewed as deferrable expense, and not as investment.
This is even more relevant to non-cyclical and service industries such as financial services, telecommunications, entertainment and healthcare, in which brand equity is multidimensional, and dependent on innovation, the customer touchpoints of service and customer experience. Through the conventional steps of building salience, image, positive judgment and relationships, the brand gets attention over the noise of competition; elevates the product level from commodity to expected or augmented; and creates sustainable competitive advantage through relationships resulting in customer lifetime values. |
