Brand Equity: How to Build It, Measure It and Keep it

what is brand equity

Brand Equity: How to Build It, Measure It and Keep it

A brand is a set of values, attitudes and behaviours shared by an organization or individual. Brands are everywhere. From our homes to our workplaces to our cars, we associate brands with trustworthiness, reliability, quality and the promise of good things. And brands can do more than make us feel better about ourselves. They can also make us better employees and make us more valuable consumers.

Brand equity is the difference between brand awareness and brand recognition. In the old days, companies spent tons of money on advertising, hoping it would translate to sales. Today, we’re talking about building an intangible asset called brand equity. But what is brand equity?

Brand equity is a term used in business management and marketing circles to describe the intangible value of a brand.

What is Brand Equity?

what is brand equity

Brand equity measures a brand’s performance concerning its competitive environment. You can use brand equity to measure how well a business, product or service is doing by comparing how well it is performing against its rivals. Brand equity can be measured using one of three methods:

  1. Net Promoter Score (N.P.S.)
  2. Brand value
  3. Market share

In addition, we can measure brand equity in terms of intangible assets such as brand loyalty, brand reputation and brand advocacy.

The difference between brand equity and market position is that brand equity measures the value of a business within a particular industry against the competition. It helps companies understand where they stand in the market. It enables companies to determine whether they are in demand, and if they are in demand, they can identify the most appropriate market positions to target.

Why is brand equity significant?

  • Understanding and managing brand equity is critical as the market becomes increasingly competitive and brands compete for market share.
  • Brands need to be able to identify their strengths and weaknesses and develop strategies for growth that will help them continue to grow.
  • Brands need to be able to measure the success of their advertising campaigns.
  • Brands need to be able to plan marketing activities across various channels, products and markets.
  • Brands need to measure the success of their marketing communications, particularly on the internet.

The different ways in which you can measure brand equity are:

Net Promoter Score (N.P.S.)

This method is a way of measuring consumer loyalty. Companies use this approach to determine the loyalty of their customers and then to ensure that they are maintaining this loyalty.

To measure N.P.S., consumers are asked to complete a simple survey. The survey is composed of two questions.

  1. Would you recommend this product to your friends and family?
  2. How likely are you to repurchase the same product?

N.P.S. is calculated by subtracting the number of ‘no’ responses from the number of ‘yes’ responses. This calculation produces an N.P.S. score ranging from –100 to 100. A score of 0 indicates that people do not have a favourable view of the company. A score of 50 indicates that people do not have a favourable view of the company but are not actively looking to buy the product or service. A score of +100 indicates that people have a favourable view of the company.

Brand value

Companies can calculate their brand value by using any one of the following approaches.

  • Comparing the average price paid per unit of the product.
  • Comparing the average price paid per unit of the product with other products in the same market sector.
  • Comparing the average price paid per unit of the product with the company’s previous results.
  • Comparing the average price paid per unit of the product with the industry’s previous results.

Market share

Market share is the number of units of a particular product sold by a company divided by the total number of units sold by all the competitors in the market. It is calculated using the following formula:

Market share = Number of units sold.

Number of competitors × Total number of units sold.

Competitors include other brands, retailers and online retailers.

Brand equity is not the same as market share. Market share refers to the share of the total market that a particular company has captured. Brand equity is the value of a particular company with its competitors.

How can we use brand equity to manage a business?

  1. Understand the strengths and weaknesses of your brand.
  2. Identify the leading competitors.
  3. Determine the key market sectors in which your business operates.
  4. Identify the brands that are your closest competitors in the market.
  5. Calculate the size of your market.
  6. Calculate the size of your market share.
  7. Identify the main customers in your target market.
  8. Develop a strategy to increase your market share.
  9. Assess the quality of your customer service.
  10. Determine your most profitable sales channels.

Why Do You Need to Build Brand Equity?

why do you need to build brand equity

A brand equity strategy should be a part of every business’s marketing plan. To attract consumers, businesses must focus on building consumer awareness, customer loyalty and advocacy.

Brand equity is about building a customer base of people who think and talk about your company’s products and services. Building brand equity is more than advertising. It requires a strategic approach to marketing and management.

To build brand equity, companies need to:

  • Create unique brands. No one brand works across a wide range of products. Instead, companies need to create a brand name that stands out in customers’ minds. This involves having a solid identity that resonates with customers.
  • Create a credible image. Customers judge businesses by their appearance and reputation. To attract consumers, businesses must have a professional, trustworthy look.
  • Offer value and service. Consumers are attracted to companies that offer good service. If a company has a high level of brand equity, it will receive many good reviews and recommendations.
  • Use promotional activities wisely. Companies must use their marketing budget to ensure they attract and retain customers.
  • Stick to your guns. Once a company has established its brand, it must maintain it through consistent actions. For example, if a company sells furniture, it must never switch suppliers.
  • Be proactive and responsive. Consumers want to feel they know what they can expect from a company. To build brand equity, companies need to be proactive and responsive.

A branding strategy is an effective way to drive customer interest and awareness and generate brand loyalty. It is a method of communication that focuses on the products and services a company provides. The goal is to attract new customers and maintain existing customers.

Building a brand equity strategy involves using the most appropriate strategies to communicate a company’s products and services. Branding is a process that takes time to implement successfully.

How do you Build Brand Equity?

how to build brand equity six steps

Building brand equity is the process of making your brand memorable. Many businesses are struggling to increase their brand equity. Here, we’ll provide you with the best guide to building brand equity.

Brand equity is a company’s ability to create a positive impression among potential buyers. This is the primary reason why companies spend billions of dollars on advertising. They do this because they believe that brand equity is one of the most critical assets of any business.

In the same way, a well-designed logo is a vital part of your brand. It’s also one of the first things a customer sees.

In this article, we’ll talk about what exactly brand equity means and how you can increase it for your brand.

1: Identify the problem

One of the first things you need to understand is that brand equity isn’t something that happens overnight. It requires effort and time.

Brands are built through the accumulation of small details over time. It would be best if you started at the beginning of your brand building journey.

To begin with, you need to identify your company’s problems. For example, you might struggle to attract new customers or retain existing ones.

2: Identify the solution

Now that you know the problem, you need to identify the solution. You can do this by using the K.I.S.S. principle.

K.I.S.S. stands for ‘Keep it simple, stupid’. This principle has been proven to work in many different industries.

The easiest way to build brand equity is to keep it simple. Keep it as simple as possible without compromising on quality.

Once you have identified the solution, you need to develop a detailed strategy that will help you implement the solution.

You may also want to include the solution’s name in your logo. You can do this by adding a line under the company name.

3: Implement the solution

Once you have developed a strategy, it’s time to implement it. There are various ways to implement the solution. For example, you can use marketing strategies like paid advertisements, branding campaigns, sales promotions, etc. You could also focus on improving your service delivery.

You can also try new technologies like social media, eCommerce, etc. These are just some examples. You can also use these strategies to build brand equity.

4: Measure your success

It’s now time to measure your success. There are two main ways to measure your success.

The first way is to conduct a survey. You can ask your customers if they’ve noticed any changes. You could also ask them if they’ve heard of your brand before.

How do you Measure Brand Equity?

how to measure brand equity

Brand equity is defined as the intangible value that consumers attribute to brands. This includes brand strength, brand awareness, customer loyalty and trust, and brand quality.

To calculate brand equity, you must collect information about your target customers and analyze data. These are some of the critical elements you need to measure for your brand equity:

The first step in brand equity measurement is to define who your audience is.

Who is your target audience? If you have a large audience, the measurement will be more complicated. You have to think about what type of information they might need. For instance, if you sell baby products, you may want to find out what kind of parents they are. Are they having children now, or do they plan to have kids in the future? What are their attitudes towards parenting, and what do they expect from a baby product? Is it a gift they would like to receive or something they are looking to buy for themselves?

In addition, you should consider what they might expect from a product. They expect it to perform well if it’s a product that is important to them. If you are selling cars, you should ensure that your customers expect the car to be reliable, stylish and safe.

Next, you need to understand how much they trust the brands you are working with. Do they trust your brand to be reliable and honest, or do they worry about you making promises you cannot keep?

Now, you should find out what information your target audience is searching for on the web.

Your audience will probably be searching for specific things on the web. You can use the keywords they have entered into search engines to determine what they are searching for. This will also tell you whether they are searching for products or services. You can use the search terms to get more insights into who they are.

Once you know your audience, you can start collecting information about them. How many people are currently using your product or service? How often are they using it? Are they happy with it, or do they have problems with it? How does the product compare to competitors?

In addition, you can use tools such as Google Analytics and ClickTale to get more information about your audience. Google Analytics is an excellent tool for understanding your visitors’ behaviour. ClickTale is another tool that helps you understand how people interact with your site and where they are coming from. You can track your customers’ behaviour to determine where your weaknesses are.

How do you keep Brand Equity?

how to retain brand equity

Retaining brand equity is a tough challenge for every business owner. Today, thousands of companies are online, and they all promise the world, but few succeed in retaining brand equity. Let us find out why and how to retain brand equity for your company.

Why do we lose brand equity?

The reason behind this problem is that there is a lack of understanding of brand equity and how it can be created and retained. This lack of understanding causes businesses to focus on their products instead of their brand.

Types of Brand Equity

There are many types of brand equity like brand awareness, loyalty, preference, and brand equity. Brand awareness refers to how well people know about the company. Brand loyalty refers to how much consumers buy from the company because of its brand. Brand preference is the preference of consumers to use the company’s products over the competitors. Lastly, brand equity refers to how much the company’s brand is worth.

How does brand equity get lost?

When a company makes a mistake with its brand, it loses brand equity. When you are not consistent with your brand, your brand gets lost. People who work at your company also contribute to the brand loss. Employees who don’t understand your brand’s purpose start marketing their ideas.

Brand Loss Causes

Here are some common reasons why brands lose their brand equity.

1 – Poor Communication

The first reason behind the brand loss is poor communication. Many companies have difficulty explaining their brand’s vision to their customers. They fail to communicate the vision of the brand properly. They also fail to explain to their employees the vision of the brand so that they can make the brand successful.

2 – Poor Strategy

In addition to poor communication, many companies fail to develop a strong strategy. Without a strategy, your brand can’t retain its brand equity. Companies can’t survive without a strategy. The reason behind this is that a strategy has a significant impact on how much the brand retains its brand equity.

3 – Failure To Focus

Another important reason for the brand loss is the failure to focus. You need to focus on your brand’s vision and mission. It would be best to concentrate on ensuring the employees understand what they should do. This means that you need to hold team meetings regularly. You also must ensure that your employees are well versed in your brand’s vision, mission and values.


Brand equity is the sum of all of the associations and impressions a brand leaves in the minds of your customers. It’s not something you can calculate like you might an R.O.I. or profit margin. That’s why it’s essential to focus on creating quality content that engages your audience and builds brand equity. Once your brand equity grows to a certain point, you’ll begin to see a return on your investment in content marketing. Brand equity grows over time with consistent, high-quality content. Once you achieve this state, it will enable you to build deeper connections with your audience and attract new customers at the right price.

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