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Consumers now care more about the specific brands they choose than ever before. Product features are still important, but brand equity is equally key. What is brand equity all about?

What Is Brand Equity?

Your brand equity is the totality of your brand as an asset in itself. Equity includes everything that attaches to your brand name and its perception among consumers, the sum of which drives the kind of relationship that your customers have (or don’t have) with you.

Brand equity is about how customers feel when they interact with you, how they see you, and how they act towards you. Your brand equity has a strong influence on everything from your market share to your price premiums.

The 4 Key Components of Brand Equity


Whenever we hear or see anything, we associate certain things with it. What do people think about when they see or hear your brand? Consider a few well-known brands by way of example. When people think about Geico, for instance, they instantly think of funny, punchy commercials. When people see a Chick-fil-A, they think about the employees, who are renowned for their helpfulness.

Good associations drive sales and word-of-mouth marketing. You build these associations through your ads, your online interactions, your pre- and post-sales behaviour, and many other little things that work together to say something about who you are.


Anyone who knows about your brand will have an association, but experience goes a little deeper. This is what people experience as they interact directly with your brand. It includes experiences they have on your website, throughout the buying process, in getting problems resolved after sales, and their actual use of your product or service itself. Good experiences cause people to view your brand as superior to others.


Brand quality is intangible. It’s primarily built as you make and fulfill promises, but it’s also influenced by advertising and even something as simple as logo and colour choices. Customers compare what you’re offering to what competitors offer and come to a conclusion about what kind of quality you offer. Their conclusions are often very subjective, but if you have good perceived quality, you can charge higher prices. Apple is an amazing example of a company with pricing based, at least in part, on strong perceived quality.


Brand loyalty is about keeping customers for life. You make more money reaching out to repeat customers than trying to gain new ones, and that’s due to brand loyalty. Loyal customers are also the best source of word-of-mouth advertising. You build brand loyalty by showing existing customers you care and building a relationship with them.

How Brand Equity Matters

Good brand equity is an asset. You can license or sell it to others who want to trade on your good name. You can charge premium prices based on your perceived quality. Your market share will increase as customer loyalty improves and people have good associations and experiences with your brand. Strong brand equity also makes it easier to launch new products and services.

Conversely, poor brand equity can destroy you. Word-of-mouth spreads quickly when people have a bad experience. A few years ago, United Airlines forced a passenger off because they were overbooked. Overbooking happens regularly, but it’s usually dealt with before passengers board; and in this case, it wasn’t dealt with well at any point in the process. Follow-up by the CEO was even worse, and United’s refusal to apologize resulted in a loss of more than a billion dollars and one of the most spectacular market share drops in recent memory.

What Is Brand Equity to You?

Is your brand equity an asset or a liability? Do you know where you stand, where you need to go, and how to get there? Contact us to find out how we can refine your brand messaging and help you build the equity you need to grow.