INSIGHT on INSIGHT: Utilizing Equity Assessments
WHAT AND WHEN: Proper usage
Equity assessments tend to be a form of narrow & deep insight seeking to understand the position different brands or retailers own in the mind of buyers or shoppers.
This approach seeks to understand how much different equities (like quality, low price, customer service, uniqueness, etc.) are associated with or owned by different brands or retailers.
This understanding is valued based on the belief that clearer, stronger and more differentiated perceptions are more likely to translate to compelling reasons to buy one product over another.
Understanding equities also helps companies determine what particular shopper profile to focus their message on or to understand where competitors have an established presence that may be very difficult to compete against.
WHY: The benefit and value
Equity understanding is useful to help brands monitor their absolute perceptions, understand where (and hopefully why) other brands perform particularly well on certain metrics and identify where there are gaps in the market where an unfulfilled desire or unmet need exists. This provides objective information in several forms by answering the following questions:
- How well is my brand communicating the message I want shoppers to hear?
- What message are shoppers hearing (and believing) from the competition?
- What equities appear to be most important or be driving purchase preference?
- Where do gaps exist where shoppers have a need or desire an equity, but no product performs well on it?
HOW: Tips to guide a basic approach
Equity assessments are typically fairly straightforward, but the results can still be compromised by poor design. Make sure the following elements are considered:
- What and how many brands should be included? Including big brands may seem like the obvious choice, but small brands might actually be more of threat for owning certain equities or stealing market share.
- What equities should be included? Common equities are fairly obvious, but less common and more-meaningful equities could be key points of difference. This may include ease of use, environmental responsibility, total assortment, or friend/professional recommendation.
- Who to ask? Consider if equities should only be asked of brand buyers or of those that are aware of or have considered buying (but not necessarily bought) a brand.
- How many brands should a respondent answer for? Fatigue and bias can blur results if respondents are asked to repeat the same battery of questions too many times.
APPLICATION: What to do with the results
By definition, equities are some of the most valuable and important assets a brand can develop. Failure to develop strong equities typically leads to slower sales and lower loyalty. Understanding what equities exist today and where equities are desired can give any company a clear path to start evolving their own position or start attacking a competitor’s position. Consider if any of the following actions are appropriate based on the new equity insight you gain:
- Avoid mimicking equities the competition already owns.
- Attack the perceived importance of equities owned by the competition.
- Reframe existing equities to better align with the language and value sought by shoppers.
- Narrow and possibly eliminate some of the equities your brand seeks to own to create a cleaner, clearer message.
- Better align each variant in your brand portfolio with a discrete equity.