Strong brand equity vital for SMEs to accelerate growth
Corporate brand equity is vital for companies to effectively engage and nurture long-term relationships with all stakeholders. Brand image is central to cutting through the noise to attract investors and talented employees and drive brand loyalty to secure repeat customers. It's also key to strengthening the company's ability to stay ahead of new market entrants and strengthen business development initiatives for long term growth.
Here’s what strong corporate brand equity helps SMEs achieve as they aim to accelerate growth:
- Power to drive credibility and trust across all stakeholder groups.
- High branding efficiency and receptivity, enabling new affiliated products/ services to be launched more impactfully.
- Increased competitive advantage with lower customer acquisition costs. It helps build stronger negotiating power and allows businesses to charge a brand premium.
- Effective human capital management. Strong brand equity helps attract and retain top talent as they take pride in working for reputed brands.
Why most SMEs lack focus in brand equity
Establishing a strong brand allows businesses to clearly convey the unique synergy of values, principles, and core competencies that set them apart from competition and improve financial performance. However, we often see SMEs overlook its importance due to certain limitations.
SMEs largely have a limited view of corporate branding and only relate it to their visual identity (e.g. logo), product and service delivery. SMEs tend to have limited time and resources as they focus on daily operations. They often lack the bandwidth, knowledge and skills to actively determine stakeholders’ needs and manage their brand accordingly. Such limitations force SMEs to focus on short-term business strategies and neglect building corporate brand equity for the long-term. Moreover, SMEs often don’t prioritise branding due to the misconception that corporate brand equity is an expensive proposition and that it only concerns large organisations. While good branding and a strong communication strategy is not necessary to start a business, it is certainly crucial for scalability and business longevity.
As the corporate brand equity is made up of interrelated internal and external components, it might not be the most straight-forward to assess and build. Some key challenges that SMEs often encounter include:
- Considering all key factors - Most have a good sense of one or two areas in which their brand may excel or may need help. However, when pressed, many find it difficult to even identify all the factors they should be considering. When immersed in the day-to-day management of a brand, it is not easy to keep in perspective all the parts that affect the whole.
- Alignment with stakeholders’ beliefs and values - This is crucial as companies increasingly move their focus from the product to the consumer. Gartner’s Brand Trust Survey1 conducted among B2B and B2C customers shows that 81% of customers refuse to do business with or buy from a brand that they don’t trust, and 89% expect to disengage from a brand that breaches their trust. These issues are especially important to note for start-up companies, who are trying to get into the market.
- Regular review - For the established companies, they too must constantly review their corporate brand equity as the market evolves and be able to pivot themselves in an agile manner, to maintain market relevancy and drive growth.
The way forward
To achieve long-term sustainable growth, businesses need to secure new opportunities while leveraging their corporate brand equity, underpinned by their corporate values, associations and relationships in the market. Business owners and companies need to make corporate brand building a key priority and start prioritising investments around it.
We understand, it’s not easy for the SMEs to measure and build strong equity given limited time and resources. To help business owners take the first step and to guide companies in better understanding and tracking their corporate brand equity performance, we have developed the PwC Brand Equity Diagnostics. It’s a holistic and structured way to measure the strengths and weaknesses of the corporate brand equity from an internal and external perspective over-time.
PwC Brand Equity Diagnostics
It provides a quick assessment of the current standing of a company’s corporate brand in the minds of its internal and external stakeholders. This is done through a series of diagnostic questions that are designed to assess the corporate brand equity across three key areas (Exhibit 1).
Exhibit 1: Three key areas of assessment for the PwC Brand Equity Diagnostics
Source: PwC Research
With PwC Brand Equity Diagnostics, a company’s Corporate Brand Equity Score can be determined (out of a total rating of 6), based on specific variables measured across the three key assessment areas (Exhibit 2).
Exhibit 2: Sample Corporate Brand Equity Scores for a company across three years based on the PwC Brand Equity Diagnostics
Source: PwC Research
Through a clear definition of the components and measures of corporate brand equity, businesses will be able to identify gaps, develop relevant interventions, and work towards strengthening their corporate brand equity in the long-run. Whilst there are many such tools and platforms in the market, very few comprise all of the essential elements uniquely captured in PwC Brand Equity Diagnostics (Exhibit 3).
Exhibit 3: PwC Brand Equity Diagnostics is unique in the market
Source: PwC Research
Our observations: SMEs in Singapore
Based on the findings of PwC Brand Equity Diagnostics, we see that the top Singapore SME brands ensure: i) their senior management uphold the company’s core values; ii) good relationships and positive, and desirable corporate brand association with all stakeholders. However, the local SMEs need to do more in improving perceptions around their corporate image, particularly around the quality of products and services delivery and brand risk management.
We invite you to try the complementary PwC Brand Equity Diagnostics today and start taking the first step towards building a strong corporate brand equity for your company. Upon completion of assessment, companies will receive a PwC report detailing insights and options on how you can further address your strengths and weaknesses.
Sources
1 Rama Ramaswami, Brand Strategies Focused on Dependability Score Highest on Customer Trust, Gartner, December 2020.
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