PRODUCT, BRAND, OR SALES EQUITY -- WHAT SHOULD YOU FOCUS ON?


Last week, we discussed misconceptions about growth and the two most common mistakes businesses make in regard to growth. As a small recap, here are the important takeaways:

● There are millions of ways for a company to spend money, but only three ways to get it:

○ Acquire a new customer

○ Expand your relationship with a current client

○ Retain a current client.


● Mistake #1: Focusing on AXR rather than RXA.

● Mistake #2: Settling for a “fine” retention rate rather than working to create a “fantastic” retention rate. How do you grow, then? You have to focus on equity. Let’s break equity down into a simple formula:


Imagine a pie. The pie represents the total value created by you and your buyer working together. Think of a slice of that pie (your value) as a paycheck. The buyer’s equity, the value they actually get (the amount of pie they take home) is their “asset” (the size of the total pie) minus their liability (the slice they give you). If the buyer perceives the pie to be large, then the slice you take doesn’t seem unreasonable. On the other hand, if the buyer perceives the pie to be small, then giving you a slice of it can become quite contentious. The best outcome is that you would both walk out of the bakery with huge slices. The way to accomplish this is by growing the perceived size of the pie.

For a buyer, their perception of the pie can be broken down into three integrated sources of value, or “equities;” Product Equity, Brand Equity, and Sales Equity.

Product Equity: The tangible and intangible value a buyer receives from his perception of the product/service “asset,” including technical specifications, quality components and construction, functional performance, design, fit-for-purpose, etc.

Brand Equity: The tangible and intangible value a buyer receives from his perception of the brand offering the product or service (its name and symbols), including how well known, history of taking care of its customers, social acceptance, risk factors, etc.

Sales Equity: The tangible and intangible value a buyer receives from his perception of the relationship he has with his sales and account service teams, including their integrity, competency, recognition, proactivity, savvy, chemistry, etc.

All of these equities build upon each other, and if you want a big perceived pie, you have to have all three! If your buyer only perceives the product equity, then you have likely created a fairly small “value” pie and you will have to grapple for a slice. But, if you can convince your buyer that the product also has some brand equity wrapped around it, you’ve grown the perceived size of the pie, and, therefore, you can take your fair slice. Still, your buyer ends up with more pie. If the buyer perceives the value trifecta of product, brand, and sales equity altogether, you are able to grab a large piece of pie and have plenty of pie (value) leftover for your buyer. It’s a win-win solution.




Want to learn more about product, brand, and sales equity? Stay tuned for our next few articles! In the meantime, follow “The Brookeside Group” and “Encompass CX” on Linkedin!



Co-written by Alexis Audeh

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