Why is Brand Equity Important, and How Can DAM Systems Protect Your Brand Equity?
Digital asset management
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min read

Why is Brand Equity Important, and How Can DAM Systems Protect Your Brand Equity?

Why is Brand Equity Important, and How Can DAM Systems Protect Your Brand Equity?
February 22, 2023

Do you think your product and service can succeed if you do not meet your customer's expectations? Clearly not.

It is important to note that the quality of your product or service is not the only factor determining your company's success. As a company, you must also consider how your brand is perceived by your customers and prospects. Imagine the world's most famous brands—and what their brands represent:

  • Apple is known for its innovative technology and for always looking forward.
  • Mercedes-Benz, the premium luxury automaker, consistently produces vehicles that are classy.
  • Ikea carries durable furniture at a price that can be afforded even by students.

You do not even have to know what the item is from one of these companies to recognize it. If it comes from Apple, you know it will be innovative. A Mercedes is always classy. IKEA products are always sturdy.

This universal perception of a brand's products or services is extremely valuable to a company. Such value of a company is known as brand equity.

To be precise, brand equity is the perceived value of a brand among consumers. It is the sum of several small, but equally essential elements combined, like:

  • Brand awareness: Your familiarity with a brand, its elements, and its products.
  • Brand recognition: The ease with which you recognize a product or a logo as belonging to a specific brand.
  • Brand recollection: When you think of Apple, what comes to mind? That is your brand recollection.
  • Consumer perception: The perception of a brand based on customer experiences.

Despite this list not being exhaustive, it can serve as a starting point for learning about brand equity. If you want your customers to invest in your brand, you must educate them on it. This includes:

  • A recognizable logo
  • Brand assets, and  
  • Your brand's "Why Us” statement

And do not forget… your consumers will want to know what your brand stands for and its values.

If your prospects become customers, they need to know whether their experiences match their perceptions, including customer service and product or service quality.

The equity of a brand is remarkably high when it has a positive perception and tends to over-deliver. Underperforming and disappointing brands, however, can have negative brand equity. When it comes to positive brand equity, it is important to remember that it can be devalued almost overnight if trust is lost. In the same way stocks can drop when the CEO tweets something on a whim, so too can the brand equity tank when someone makes a mistake.

But again, the question is why is it so important? What is the ROI of branding? Let us understand in detail.  

The Importance of Brand Equity

The following are just some of the reasons why your brand equity helps you succeed as a business.

1. Promotes Brand Awareness

Brand awareness does not happen by accident. Every brand spends millions of dollars marketing their names to consumers and for good reasons. Customers trust the brands they know. Brand recognition adds value to products sold under its name just by its existence. As you become familiar, you gain visibility, which serves as an anchor for other positive associations.

2. Enhances Brand Recognition

When you hear the names Apple or Mercedes, what comes to mind? That is a brand association in action. It happens when customers become accustomed to certain company traits. The purpose of branding is to connect it with positive attributes such as "premium," "quality," "luxury," and so on. Brands with positive attributes are more likely to corner the market since they give people more reasons to buy.  

3. Value Perception

Another factor to consider is perceived value. The brand equity of a product assists people in making connections between the perceived benefits and perceived costs. Therefore, nobody questions Apple’s phone prices. It is presumed that the brand is reliable. Therefore, people are willing to pay so much for an iPhone.  

4. Builds Client Relationships by Promoting Brand Loyalty

Most marketers would agree that keeping an existing customer is cheaper than acquiring a new one. Therefore, when companies build genuine relationships with their customers and work hard to promote brand loyalty, they see substantial financial rewards eventually.

ROI as Performance Measure: How Does Brand Equity Affect the Return on Investment?  

Equity is the value a brand has. When customers are ready to pay more for a branded product than for generics, the company has built brand equity.  

It is also possible for brand equity to be negative. For example, when a brand is involved in an environmental disaster such as the 2010 BP oil spill, it can lose customers and become a liability rather than an asset.  

This means the value of the brand impacts profit margins by affecting profit margin per customer, sales volume, and customer retention.

A Big Effect on Profit Margins

  • Price

If a brand is perceived as having a certain level of quality or prestige, the customer will perceive the brand's products as being worth more than those made by competitors. As a result, brands that have prominent levels of brand equity are valued higher. It is not more expensive to manufacture and assemble a golf shirt for Lacoste than it is for a less reputable brand. Nevertheless, its customers are willing to pay more, so the company can charge a higher price for that shirt, which is profit. When a company has positive brand equity, it can charge a higher price for a product than its competitors, even if the product is purchased at the same price.

  • Sales Volume

Consumers gravitate towards products with good reputations, so brand equity has a direct impact on sales volume. Apple, for example, often has customers lining up around the block to buy the newest product, despite it being more expensive than comparable products from competitors. A major reason for Apple's enormous success is its incredibly successful brand equity. As a certain percentage of a company's costs are fixed, higher sales translate into higher profits.

  • Customer Retention

It is the third area in which brand equity affects profit margins. In the case of Apple, many of its customers do not own only one product; they have several, and they eagerly await the development of the next one. There is a fierce loyalty to Apple among its customers, sometimes fanaticism. Apple has high retention rates due to its strong brand equity.  

In contrast, negative brand equity has the opposite effect on customer retention and, therefore, profits.  

How Can DAM Protect Your Brand Equity?

As we discussed, brand equity ROI is characterized by trust and consistency. You will lose your brand equity if you do not build trust with your customers. Your formerly loyal customers will walk away. Creating and maintaining trust is the most important thing your business can do. It is therefore imperative that all messaging and branded content be protected.

Digital Asset Management (DAM) like ioMoVo protects your brand assets as well as your brand equity. It helps companies create stronger and more recognizable content and messaging; and it ensures that all marketing efforts, campaigns, and products are consistent.

Consider how your company handles cash. Not everyone has access to it. Businesses rely instead on safes, banks, and armored trucks to keep their money safe. In the same way, a DAM protects your content and brand equity. DAM systems have built-in backups, recovery, and service level agreements to keep everything secure and protect the longevity of your digital assets.

Why Use ioMoVo for Brand Equity?

The end goal of every marketing department is to build and maintain brand equity. That is because it works. You cannot separate DAM ROI from your brand equity. Gaining word of mouth, charging premium prices, and launching new products or services will directly affect the company's profits.  

Therefore, DAM software such as ioMoVo enhances essential aspects of a brand’s operational efficiency with digital assets: creation, organization, collaboration, distribution, storage, and integration.  


Brand equity is intrinsically linked to your DAM ROI. The ability of a company to obtain valuable word-of-mouth, charge premium prices, and successfully launch new products or services directly impacts its profits.

Thus, digital asset management is crucial for your business since it can provide a lot of benefits. If you use ioMoVo Digital Asset Management Services, your business can organize all digital assets systematically, store them in a secure location, and improve your overall efficiency.  

Therefore, if your company is having trouble keeping up with its digital assets, consider joining ioMoVo and securing those assets. With ioMoVo's cloud-based DAM solution, you can significantly cut down on time and costs, letting you focus on other areas of your business. Sign up for a free trial today!  

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