What is customer-based brand equity (CBBE)?
Apple. Coca-Cola. Tylenol. Porsche. What do you feel when you see the names of these brands? They all provoke feelings (positive, their marketing teams hope) and are examples of strong brands that enjoy outstanding brand equity.
CBBE is the value of a brand, based on what customers feel about and think of it. Brand equity was traditionally built through word of mouth recommendation. Now, social media, online advertising and customer experience have enhanced the potential for reaching customers on a more personal, emotional level and creating a relationship with them. It’s essential that your customers’ perceptions, feelings, thoughts, and experiences regarding your brand are always positive.
Keller’s brand equity model
Because brand equity as a single concept is subtle, nuanced and difficult to quantify, it’s best approached in measurable stages, using a model. The best-known CBBE model is the Keller Model, devised by Professor of Marketing Kevin Lane Keller and originally published in his mighty Strategic Brand Management.
The Keller model is a pyramid shape and shows businesses how to build from a strong foundation of brand identity upwards towards the holy grail of brand equity ‘resonance’. This is where customers are in a sufficiently positive relationship with a brand to be advocates for it.
What exactly is the customer-based brand equity pyramid?
Each stage of the pyramid builds upon the one before, so it’s important to cement each step before moving on to the higher stages. Every experience along a customer’s journey with your brand should leave them with positive thoughts, emotions, and beliefs.
Working up to the resonance level affords a brand opportunities to recognize and capitalize on its customers’ loyalties and attitudes – whether they are positive or negative. Hearing about negative experiences help a brand understand how their customers feel about their product, so they can flip them into positive experiences.
By dividing CBBE into Keller’s four levels, marketers can understand what their customers want and need before they’ve even bought the product, or maybe even before they know they want it.
The iPad is a stunning example of this CBBE: from the robust foundation of Apple’s brand identity, the iPad was developed to look great, be easy to use, do everything its customers wanted, and more. Customers loved it and any glitches that attracted negative responses were quickly patched.
Before long, iPad users were extolling its virtues and their customer loyalty, and the iPad is now ubiquitous in stores, health centers, schools, offices and homes. It’s a classic example of something we didn’t know we needed or wanted until we saw one. Now we can’t do without it.
How the four levels of Keller’s CBBE pyramid work:
Level 1: Brand Identity (who are you?)
We can add to this question: ‘and what makes you unique?’ This is how customers look at your brand and distinguish it from others. It’s the most important level and must be strong to support the rest of the pyramid above it. Its role is twofold:
- To identify your USP (unique selling point) in the marketplace
- To let customers know who you are
What brand managers can do in Level 1:
- Identify your USP – why would you choose your brand over the competition?
- Conduct market research to identify the wants and needs of your target audience
- Target your customers with channeled ad campaigns (social media, Google) to ensure they know who you are and understand your USP
Level 2: Brand Meaning (what are you?)
Once customers become aware of your brand, they’ll want to know more about your product. They’ll question its features, looks and style, reliability, durability, customer experience and value for money, to find its brand meaning. It’s important to deliver quality and reliability every time, to create positive brand associations in the customers’ minds. For the purposes of brand reputation, Level 2 is split into two categories:
- Brand performance (rational): This either builds a brand, or breaks it. It covers product functionality, reliability, durability, and price as well as customer service and satisfaction. It’s ‘it does what it says on the tin’ territory and when it performs well, customer opinion will be positive.
- Brand imagery (emotional): different, but equally important, imagery meets the customers’ social and psychological needs. What does the brand appear to be to customers? Volvo appears Scandi-chic, family-orientated, safe and eco-responsible; Cushelle soft, homely and cozy.
What brand managers can do in Level 2:
- Check that your product or service is living up to its advertised promises by analyzing negative reviews, negative comments, refunds and returns
- Fix the negatives!
- Exceed expectations by giving customers value add-ons such as freebies or anniversary discounts
- Make sure your advertising and imagery truly reflects the product experience – it doesn’t over-promise and under-deliver.
- Be prepared to develop packaging, logo, consistent visual advertising and customer service.
Level 3: Brand Response (What are the feelings for the brand?)
On this level of Keller’s model, judgment and feelings can be hard to separate and are intensely personal for each individual customer.
- One customer may judge the brand irrelevant to them, whereas another will find it completely relevant.
- Another may make their own value comparison against another product, harshly or fairly.
And add to the mix actual interaction and perceived reputation and you can see how hard it can be to quantify how customers feel about a brand and how much they trust it.
What brand managers can do in Level 3:
- Track your customer feedback across social media channels and other data sources to identify pain points and areas of customer dissatisfaction
- Fix things that flag up as negative
- Run brand perception surveys
- Give special offers and discounts to strengthen customers’ emotional bond with your brand
Level 4: Brand Resonance (a strong relationship)
The apex of Keller’s CBBE model is resonance, when a customer is:
- Loyal to a brand
- Considers it superior
- Will buy no other
- May join a brand community, such as a social media group or club
- Advocates its merits to others
Many things resonate with customers: lifetime experience, customer service, products and value. A good measure for resonance is the Net Promoter Score that asks one simple question: “How likely is it that you would recommend [Product X] to a friend or colleague?”.
What brand managers can do in Level 4:
- Everything you can to keep loyal customers at the top of the pyramid!
- Treat Level 4 customers as a community of VIPs – offer quality extras, such as exclusive rewards, free gifts, member-only events and discounts, preferential upgrades or shipping
- Find out why customers reached the resonance level
- Don’t rest on your laurels – keep improving that customer experience that led to customers reaching resonance
Keller’s model is deceptively beautiful in its simplicity; building customer-based brand equity is, in reality, a long and hard road. When you start at the bottom with a great brand identity, then get customers to know your brand and your business gradually, you’ll create a brand that people will like, trust and which will ultimately be successful.
Aaker’s brand equity model: A second theory
Whereas the Keller brand equity model focuses largely on emotions, Professor David Aaker says it’s much simpler than that: it’s all about recognition. The most successful brands are those that drive recognition (think Mickey Mouse for Disney) in the emotional part of the brain that makes split-second decisions about what to buy.
Aaker sees brand equity as a mixture of brand awareness, brand associations and brand loyalty. All these add up to the value provided by a brand’s goods or services. The Aaker Model helps to create a brand strategy made up of various components that separate a brand from its competition and advance it.
Aaker says that there are five components of controlling brand equity. The higher the data scores for these, the closer the product is to achieving brand equity:
- Brand awareness: how known is the brand to the public? Like the Keller model, this is the starting point of building brand equity.
- Brand loyalty: how loyal are people to the brand? Loyalty is hard for competitors to copy, so it gives a brand time to respond to competition.
- Perceived quality: is the brand known or expected to deliver good quality products? Quality above features will give a product the edge with consumers – for a while, until they begin to demand the features.
- Brand associations: what do people feel when they see the brand? The cognitive, split-second reaction to seeing the brand on adverts, during the buying process, the ‘feel-good factor’, the number of available brand extensions and differentiations.
- Patents, IP and trading partners: brands with higher accumulated proprietary rights have a competitive edge against other brands.
All these components are measurable when ran through the right platforms that highlight where more could be done to attain brand equity. Branding needs to be delivered at every touchpoint along the customer journey to ensure this recognition. Data can then be gathered at various stages of marketing to inform and increase customer brand loyalty and show up the distinctiveness of the brand from its competitors.