Before brand equity, let’s focus on the term equity alone. The textbook defines equity as the ownership stake representing the value minus the liabilities. But that’s more of a finance definition. We need to understand equity in terms of branding.
What is brand equity?
Brand equity, in simple words, is the reputation, goodwill, and intangible respect that a company earns over time that goes beyond its tangible assets. In other words, you can understand how the customers perceive a brand and value it. It may sound like a complex term, but it basically represents the commercial value not as how the business describes itself but as how the customers perceive it. Now, it's a very simple explanation: when brand equity is high, people pay more, stay longer, and forgive mistakes. When it’s low, you’re locked in a race to the bottom. The hack here is rather than trying to focus on what you want your customers to feel about your product, try aligning with their brand perception and position your brand accordingly.
When working on brand equity, always remember the famous words of Marty Neumeier.
“Your brand is not what you say it is; it's what they say it is.”
If we just follow the study by Kantar as a statistic, it says that strong equity grows their market value five times faster than brands with low equity. Brand equity is reflected in pricing power, customer loyalty, and market momentum. There are hundreds of global brands that you think of, and you relate the brand equity to them very easily.
But hey, just like we said, these brands were able to pull this off over time, not in one night, not in one week, not in one month, but through years of consistent actions and also leveraging on the evolution of content marketing. Today, in this blog, I brought you the four core pillars of brand equity. Once you master these four pillars, it is highly likely for you to not only create but also maintain your brand equity. So, let's begin this.
The Four Core Pillars of Brand Equity
I’ve structured these four pillars accordingly as they come and play their crucial role in the development of your business’s brand equity. Follow my lead.
Quality
The only and number one ingredient that is required is, unfortunately, also the only and number one ingredient that most brands lack. Products are manufactured every day, services are offered every hour, and businesses are opened and shut every week. But one thing that has prevailed through all of this and continues to do so is quality.
Of course, quantity has its value, but without quality, no one will buy your product in quantity. To create a brand reputation and equity, you must deliver top-notch quality every single time. To give you a very honest and relatable example.
Every town has a local market. Every local market has its own food stalls and eateries. Now, you also know which is the most famous eatery in your town or maybe in your locality. Why do you think that is? What is it that the particular eatery is doing that others are unable to follow?
You know the answer: quality.
Not only is that eatery old, but it has never compromised on its taste. So even you, but your parents too, enjoyed the same taste for decades.
A PwC report found that 73% of consumers say customer experience is a key factor in their purchasing decisions, but only 49% say companies provide a good experience. The gap between expectation and reality is where equity erodes. So you see that quality is something that never goes out of style. It never goes out of the equation. Quality is what creates the experience that brand equity is built on.
Consistency
Next is consistency. It has been said that it is the second most important pillar of brand equity. If we take the first example of the locally famous eatery further, we can easily derive the significance of consistency to build brand equity. For instance, the local eatery not only offered quality but also offered the same taste every single day. The owner showed up every single day without delay, without postponement, and without lethargy. Consistency builds familiarity. According to Lucidpress, consistent branding increases revenue by up to 23%. This shows that consistency is all about reinforcing your value at every step. A brand that can deliver quality is good, but a brand that can offer the same quality for the nth time is great. Your journey from good to great requires consistency, and that is what, in the end, will also increase your brand equity.
When you become consistent with your brand operations, quality, and service. There is a certain vibe about your brand that resonates among your target audience community, and they speak about it; they become vocal about it, and hence it results in a hike in brand equity.
Emotions
Next in line is emotions. You can see how we started with quality becoming consistent and then, with consistency, hit the right nerve of the customers and evoked the emotions towards the brand. It’s your brand strategy ROI to enjoy. I always say and recall this: people don’t buy products, they buy stories. When you sell your story, you don’t just sell your products but end up bonding with your customers.
Brands that have ingrained themselves in the DNA of your audience are not going anywhere. They are there to stay forever. But of course, it is easier to say than to do. Brands that have emotional value in the minds of people strike the right note of influencing customer buying behavior. A common example would be Maggi. If you notice, the other noodle brands talk about the health ingredients, taste, pricing, and benefits of their products. On the contrary, Maggi talks about the feeling of having a Maggi, the urge to eat Maggi in the mountains, at a hostel, or alone at home when there is nothing else to eat. It talks about the memories you create with your friend slurping Maggi. Emotions drive loyalty.
According to Harvard Business Review, emotionally connected customers are more than 52% more valuable than those who are merely satisfied. This is how you create brand equity and maintain it across all your platforms.
Customer experience
The last and fourth pillar of brand equity is customer experience. This simply refers to how you as a brand made your customers feel and how happy or joyous they were using your product, buying an experience that was not offered to them anywhere else. According to Salesforce, 88% of customers say the experience a company provides is as important as its product or service.
Remember, customer experience is a long game. Every onboarding email, support ticket, and refund policy is an opportunity to build or break customer trust. Your brand lives in the moments after conversion. Ignore them, and you’ll be forgotten.
Even when you pitch or sell to a new customer, they will always remember a good experience. That’s part of human nature. This is where you work on brand strategy and may need external guidance. The businesses will automatically understand why startups should invest in brand strategy consulting. That’s also your cue to excel in offering the best customer experience to people. It’s okay if they don’t buy, but clearly they will know someone who will be interested in your product or service. That’s the long shot and charm of good customer experience that never fades out.
How to Measure Brand Equity
Well, there are three primary ways you can measure your brand equity. Number one is, of course, by conducting brand surveys for studying perceptions and awareness among the people. As a business, you have complete authority over the methodology.
Secondly, you can assess the Net Promoter Score (NPS) for loyalty checks. The score ranges from 0 to 10. A high NPS correlates directly with growth and customer equity. According to Bain & Company, companies with high NPS grow at more than twice the rate of competitors.
Lastly, you can perform a brand valuation for financial equity. For startups and SMEs, internal metrics like customer lifetime value (CLV), customer acquisition cost (CAC), and retention rate tied to brand awareness can also signal rising or falling equity. Marketers must learn how executive branding influences company valuation. This test covers aspects like financial performance, customer perception, competitive strength, and brand role in decision-making.
Before we wrap
In this blog we discussed what is brand equity along with the four main pillars of brand equity, and they are quality, consistency, emotions, and customer experience. Along with that, we also discussed how as a business you can calculate your brand equity through different methods. Don’t forget that it's a long game. Brand equity cannot be built through one viral campaign. It’s built through thousands of small, aligned efforts made in the right direction and executed consistently over time. Your brand equity will compound, but it will take time. In the meantime, you can observe small wins in the form of pricing power, customer loyalty, and the ability to grow without burning through budgets. On this thought, let’s bring execution to these ideas and conquer your branding regime.
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