Eclipse AI rated #1 in Proactive Customer Retention for SMEs by G2®
Close this search box.
What is Brand Equity

What is Brand Equity and Why Does It Matter?

Have you ever wondered why you’re willing to pay extra for a name-brand product when a generic version exists? That’s the power of brand equity in action!


Have you ever wondered why you’re willing to pay extra for a name-brand product when a generic version exists? That’s the power of brand equity in action! In this blog, we’ll unpack this essential marketing concept in a clear, actionable way, giving you the knowledge to leverage its power for your own business.

What is brand Equity?

Imagine brand equity as the total value of your brand beyond just its physical product or service. It’s the perception people have of your brand, encompassing everything from recognition and reputation to customer loyalty and emotional connection. Strong brands evoke positive feelings, trust, and a sense of familiarity, making them stand out from the crowd.

Think of brand equity as a multifaceted gem, each facet representing a key element that contributes to its overall value. Here’s a breakdown of these facets:

  • Brand Awareness: This is the basic recognition of your brand. How easily do people recall your brand name, logo, or slogan? High brand awareness is the first step towards building brand equity.
  • Brand Associations: What thoughts, feelings, and experiences does your brand evoke? Strong brands consistently deliver positive associations like trust, reliability, innovation, or luxury.
  • Perceived Quality: Consumers perceive some brands as offering superior quality compared to others. This brand perception can be based on factors like product features, performance, and durability.
  • Brand Loyalty: Loyal customers are more likely to choose your brand over competitors, even if there’s a price difference. Brand loyalty is fostered by consistently positive brand experiences.
  • Brand Assets: These are tangible and intangible assets associated with your brand, such as trademarks, patents, and customer lists. Strong brand assets contribute to the overall value of the brand.

These facets work together to create a powerful synergy. High brand awareness with positive brand associations leads to a perception of high quality, which in turn fosters brand loyalty. Strong brand loyalty and valuable brand assets ultimately contribute to a brand’s overall equity.

Brand equity is not just about a catchy logo or clever slogan. It’s about building a strong, positive, and consistent brand image in the minds of your target audience. By focusing on each facet of the brand equity gem, you can create a brand that resonates with your customers and delivers long-term value for your business.

How to build brand equity
How to build brand equity

Why Brand Equity Matters: Benefits You Can’t Ignore

Here’s how a strong brand equity can supercharge your business:

  • Command Premium Prices

Customers are happy to pay more for brands they trust and value. Think Apple or Nike – according to a study by Interbrand, Apple was the world’s most valuable brand in 2021, with a brand value of $408.2 billion. Their strong brand equity allows them to charge a premium for their products.

  • Boost Customer Loyalty

Positive brand experiences foster loyalty, leading to repeat business and positive word-of-mouth marketing (free advertising!). Statistics show that 83% of consumers are more likely to recommend a brand they trust to others 

  • Attract Top Talent

A strong brand attracts talented individuals who want to be associated with a respected company. A study by LinkedIn revealed that 75% of job seekers consider a company’s brand when making a decision about a new job 

  • Weather Challenges

A loyal customer base becomes a buffer during tough times. Strong brand equity can help you navigate economic downturns or product setbacks. For instance, during the 2008 recession, customers remained loyal to established brands they trusted, even when facing economic hardship.

How to build brand equity

Here’s a breakdown of how to focus on each facet to build strong brand equity:

1. Amplify Brand Awareness

  • Marketing and Advertising: Utilize targeted marketing campaigns across relevant channels to increase brand visibility. This could include social media marketing, search engine optimization (SEO), content marketing, or influencer marketing.
  • Public Relations: Build positive relationships with the media to generate organic brand mentions through press releases, media events, or sponsorships.
  • Experiential Marketing: Create memorable brand experiences that engage your target audience. This could involve interactive events, product launches, or branded content.

2. Craft Positive Brand Associations

  • Develop a Strong Brand Identity: Define your brand’s core values, mission, and personality. Ensure your messaging and visuals consistently reflect this identity across all touchpoints.
  • Deliver Exceptional Customer Service: Positive customer experiences are crucial for building trust and positive associations. Train your team to provide prompt, helpful, and friendly service.
  • Engage with Social Causes: Align your brand with social causes that resonate with your target audience. This demonstrates your commitment to values beyond just profit and fosters positive brand associations.

3. Solidify Perceived Quality

  • Focus on Product or Service Excellence: Consistently deliver high-quality products or services that meet or exceed customer expectations. Invest in research and development to stay ahead of the curve and offer innovative solutions.
  • Transparency and Authenticity: Be transparent about your brand’s practices and materials. Highlight the quality aspects of your offerings and showcase the craftsmanship or expertise behind them.
  • Customer Reviews and Testimonials: Encourage satisfied customers to leave positive reviews and testimonials. This social proof builds trust and reinforces high brand perceptions.

4. Foster Brand Loyalty

  • Reward Programs and Loyalty Initiatives: Implement loyalty programs that reward repeat customers and encourage brand advocacy. This can incentivize them to continue choosing your brand over competitors.
  • Personalized Customer Experiences: Personalize your interactions with customers to make them feel valued. This could involve remembering preferences, offering targeted promotions, or providing exclusive benefits.
  • Community Building: Foster a sense of community around your brand. Engage with your audience on social media, host customer events, or create online forums where they can connect and interact.

5. Leverage Brand Assets:

  • Protect Your Intellectual Property: Secure trademarks, patents, and copyrights for your brand logos, slogans, and other unique elements. This strengthens your brand identity and protects its value.
  • Content Marketing: Create valuable and informative content that showcases your brand expertise and attracts potential customers. This builds brand assets in the form of blog posts, articles, videos, or infographics.
  • Customer Relationships: Consider your customer base as a valuable brand asset. Positive customer relationships lead to referrals, repeat business, and a strong foundation for long-term brand equity.

Building Your Brand Equity Arsenal: Actionable Tips

Here’s how to cultivate powerful brand equity:

  • Deliver Quality Consistently: Great products and services are the foundation. Build trust by consistently exceeding customer expectations.
  • Craft a Compelling Brand Story: What makes your brand unique? Tell your story in a way that resonates with your target audience.
  • Prioritize Customer Experience: Every interaction with your brand should be positive. Responsive customer service and personalized experiences go a long way.
  • Stay True to Your Values: Authenticity matters. Align your brand messaging with your core values and social responsibility efforts.

Remember: Brand equity is a long-term game. By focusing on these key points, you’ll be well on your way to building a brand that customers love and trust, ultimately leading to sustainable success.

Bonus Tip

Conduct market research to understand your target audience’s perceptions of your brand. This valuable feedback can guide your brand-building efforts.


So, there you have it! Brand equity is a powerful asset for any business. By understanding its importance and taking actionable steps to build it, you can unlock a world of benefits for your brand. Now get out there and start building your brand equity empire!

Along with brand identity, if you are looking to increase your brand’s awareness, these guides will kick off your journey:

How to measure brand awareness?

How to increase brand awareness? 9 actionable tips

Get started with our free brand perception survey tool

Keep the conversation going


You may also like

Don’t Let Your Competitors Understand Your Customers Better Than You

Don’t miss out. Try our 30-day Free Professional Trial.

With Free Trial, You can:

Transform your Voice-of-Customer data into insights with a couple of clicks

Start for free now!