What is Brand Equity?
What is Brand Equity?
What is Brand Equity?
Simone Somekh

Simone Somekh

June 29, 2020 ‧ 19 MIN.

Brand equity is the reason why customers choose you over other similar companies. Your brand equity is much more than a logo or company values. It’s the trust your customers have on you. 

Companies build their brand equity by maintaining quality and reliability as expected by their loyal customers. The company’s marketing message also plays a crucial role in enhancing brand equity.

This article will explain what is brand equity, why it is important, and how to build it. Let’s start!. 

Brand equity is the perceived value of a brand decided by consumers. If your business has higher brand equity, you can charge more for your products than your competitors. 

There are various factors that determine your brand equity, such as brand awareness, perception, customer experience, and the perceived value of your products. 

Why is Brand Equity Important?

As mentioned above, businesses with higher brand equity can charge more for their products than their generic equivalent, thereby earning a higher margin per sale. But that’s not the only reason why brand equity is important. 

Here are some of the best benefits of building brand equity: 

  • Increases the brand’s market share and valuation. 
  • Helps build a loyal customer base.
  • Makes it easier for brands to launch new product lines. 
  • Facilitates your company’s long-term growth.
  • Increases your chances of succeeding when expanding into new markets and geographies. 
  • Gives you a considerable advantage in negotiating with vendors, suppliers, and distributors. 

Building Brand Awareness

Brand awareness means that when customers hear your company name, they instantly recognize it or at least know the products you sell. 

Brand awareness triggers customers’ emotions to check your products when they are looking to purchase something that you sell. 

It doesn’t guarantee you a sale, but it does increase your chances of getting your products sold. 

Let’s learn why brand awareness is important, how you can build and measure it. 

Why Is Brand Awareness So Important?

You can’t purchase from a brand that you don’t know exists. That’s why building brand awareness is crucial. 

Here are the top reasons why brand awareness is so important: 

  • It contributes to your overall brand affinity and loyalty by changing how people think about your business. 
  • When people engage with your brand awareness campaigns, you can easily collect valuable insights about your audience and potential buyers. 
  • It helps to Increase your sales. If your products are comparable, shoppers are likely to purchase from a brand they recognize instead of a company they never heard of. 
  • It helps develop strong brand equity and increases word of mouth marketing. 
  • More often, brand awareness is associated with the company’s reputation. If a lot of people know about you, chances are you sell quality products and provide excellent customer service. This, in turn, helps you outdo your competitors. 

How Does a Company Create Awareness of Its Product?

When creating awareness for your products, your greatest weapon is repetitive and relevant exposure. 

As a general rule of marketing, your brand or product awareness strategies should not irritate your target audience. 

Here are some great ways to create awareness for your products:

How does a company create awareness of it's product

1- Run Referral Programs

When you offer incentives to your existing customers for every person they refer to, they will gladly spread the word about your product. 

Uber, for example, leverages referral programs to boost its brand awareness. As soon as a rider creates an account, Uber assigns them a unique referral code. 

Whenever customers refer them to someone (who doesn’t already have an Uber account), both parties get a discount on their next trip. Uber also has a referral program for its partners, where they can earn by inviting other drivers to join the platform. 

2- Leverage Customer Testimonials

Customer testimonials help establish your brand’s credibility and authority. People trust testimonials as much as they believe in recommendations from friends and family. This is why customer testimonials drive sales. 

Here’s how you can use customer testimonials to boost brand awareness: 

  • Create a customer testimonials page and promote it separately to reach prospects. 
  • Share customer testimonials on your social handles to reach more people. 
  • Incorporate testimonials and success stories in your blog to spark interest in your products. 
  • Turn text testimonials into videos and share them across social platforms, such as YouTube, Facebook, and Instagram. 
  • Use testimonials to create in-depth case studies to amplify the value of your brand. Many companies use case studies data in their research, and they might give you a backlink, thereby further boosting your brand awareness. 

3- Offer Freemium Services

Freemium refers to offering your product for free for a lifetime but with limited features. 

Companies with freemium products see a 70% higher net promoter score (NPS) than those who offer free trials. Higher NPS means customers are more likely to recommend your products to others. 

Even if you sell physical products, you can take advantage of freemium by offering free samples to new customers. 

For example, Smashbox, a beauty cosmetics seller, provides free samples of its products to entice prospects into trying their product and spread the word about them. 

The screenshot was taken on June 19, 2020

4- Harness the Power of Content Marketing

Content marketing is yet another effective way to boost awareness for your products. 

Content marketing helps you tell your target audience what your brand represents and how your products are better. 

Here are the content marketing best practices to boost your brand awareness: 

  • Check what your target audience is searching for and develop better content that is ranking at the top of search engines. A company offering car painting services might want to rank for searches like “how to paint my car,” or “which is the easiest color to paint on a car?” etc. For example, when I searched for “how to paint my car”, I saw these questions in the “people also ask” section. One of the answers was from, “Jim’s Auto Body,” a company that offers auto painting services. When people see your company website, they will remember your brand and next time when they think of painting their car, they might prefer your brand over your competitors. 

The screenshot was taken on June 20, 2020

  • Tell a story, share your journey with customers. People love to connect with companies on a personal level, so by sharing your story, you increase your chances of being remembered. You can share the story on your website, blog, and social media to increase your reach. 
  • Send personalized emails to your customers that provide value to your prospects. 
  • Create infographics. They are known to be more impactful than texts and are shared 3x more than any other type of content.  

5- Partner With Influencers

Influencer marketing can help you reach lots of people at once. Look for social media influencers who have a similar audience as yours and partner with them. 

The primary reason why it works great for product awareness is that consumers follow influencers they trust. When these influencers vouch for your product, you can reach a wider audience and increase the conversion rate. 

Nike’s partnership with Michael Jordan is one of the best examples of a successful influencer marketing strategy. Nike launched a new shoe line (Jordans) in April 1985, which Michael Jordan wore in NBA matches. In just one month, Nike sold $70 million worth of shoes. Nike made more than $100 million by the end of the year. 



6- Enhance Your SEO 

SEO ensures your website appears at the top of the search engine results page. People trust search engines, and when they see your brand for queries with commercial intent, they are more likely to believe in your brand. 

Here are some great strategies to use SEO to create awareness for your products. 

  • Optimize your content to increase your chances of appearing in featured snippets. 
  • Focus on link building to boost your domain authority. It increases your chances of appearing at the top of the search engine results page. When high-authority websites link to you, their visitors are likely to visit your website, thereby boosting your brand awareness. 
  • Engage in online forums and answer people’s questions related to your industry. This shows you are an expert in your niche and increases your chances of being remembered. 
  • Incorporate short-tail, medium-tail, and long-tail keywords in your website content to boost your probability of appearing for different search terms. 
  • Integrate schema markup to provide more information about your website (such as product categories and star rating) to searchers right on the search engine. Here’s an example of schema markup. 

7- Create Social Media Contests

Run social media contests in which contestants need to tag their friends to be eligible to win something. The reward you offer can be monetary, freebies, or a discount on the next purchase.

When contestants start tagging their friends and family members to increase their chances of winning, it will automatically help to build brand awareness. 

For example, Chica De Gallo ran a contest on Instagram to spread awareness about its products. Chica De Gallo offered winners one $50 whole foods market gift card and a variety pack of three Mi Nina Tortilla chips. The condition for winning was to like the photo, follow the brand on Instagram, and tag a friend. As a result, the post received over 638 comments.

Chica De Gallo Instagram


8- Use PPC Advertising

SEO takes time and is a long-term strategy. However, PPC advertising provides you immediate results. 

With tailored ad copies and targeted keyword research, your brand will show up at the top of search engines for relevant searches. 

Depending on the type of PPC ad you run, your products can appear in different places, such as Google search results page, third-party network websites, and YouTube. 

You can also run PPC ads on social media platforms, such as Facebook and Instagram. Both these platforms allow you to create custom audiences based on interests, location, gender, demographics, and age. This increases your chances of reaching the right people and boosts brand awareness. 

9 – Publish Extra Valuable Guest Post

Guest posting is a great tactic to spread the word about your brand. When you publish an extra valuable post on other blogs, their readers are likely to remember your brand. When choosing websites to guest post on, pick the ones with a target audience similar to yours. 

Make sure the content you publish is not overly promotional and adds value to the readers’ posts. It should teach readers something. 

The case study of Bryan Harris is a great example of how helpful guest posting can be for a brand. Before guest posting, Bryan used to receive 285 visitors a day. On the day of the guest post, Bryan’s blog attracted over 1,086 visitors and 686 the following day. Of those 1,782, 73% of them were new visitors. In two days, 215 new people subscribed to Bryan’s site. 


10- Participate in Industry Events or Workshops

Getting your company involved in industry events and workshops will help you reach a wider audience. 

Companies with a local presence can participate in industry-related events in their neighborhood. For example, if you are a restaurant, participate in food festivals in and around your locality to boost brand awareness. If you sell apparel, join or sponsor local fashion shows. 

Online businesses can participate in events conducted by other companies that have a complementary audience. For example, if you sell fitness products online, you can participate in events organized by gyms or sponsor sports teams to boost brand awareness. 

How to Measure Your Brand Awareness?

Measuring your brand awareness helps you determine whether your strategies are working or not. It also allows you to make your tactics better and justify your decisions to stakeholders. 

Here are some great ways to measure your brand awareness: 

  • Use Google Alerts: When you set up Google Alerts for your brand, you will be notified via email or feed whenever someone mentions your company or product name on the internet. Visit Google Alerts to create an alert about your brand or product name. You can also select how often you want to be notified, region, language, and how many results you wish to receive. Once you have set up Google Alerts, you will receive emails like this in a day or in a week. 
  • Analyze your direct traffic: When people know your brand, they are more likely to visit your website directly. Comparing the percentage of direct traffic with another time period helps determine if your brand awareness strategies are working or not. You can find insights into your direct traffic in your Google Analytics account. Click on Acquisition -> All Traffic -> Channels.
  • Track the volume of brand mentions: Check how many unique people that are not affiliated with your brand mention you online. The higher the number, the more the brand awareness. Use tools like BrandMentions to check the number of people who are mentioning your brand online. For example, the below image shows there are 3369 mentions of a brand, out of which 130 were on the web, and 3239 on social media. 
source: Brandwatch
  • Conduct a brand awareness survey: Ask your customers how they heard about your brand. You can also ask random people if they know the products you sell. You can do this by collaborating with bloggers or influencers who have a massive reach. Tools like SurveyMonkey can help you conduct a brand awareness survey and get the insights that you want. 
  • Check branded search volume: If more people are entering your brand name in search engines, it indicates they know about you. Use keyword research tools like Ubersuggest to check the amount of your branded searches. Track your branded search volume over time to see if it’s increasing. If not, then you need to optimize your brand awareness strategies. 
source: Neil Patel Ubbersuggest

How Long Does It Take to Build Brand Awareness?

You can build brand awareness in phases. Implementing each stage requires additional time. Let’s look at the four phases of brand awareness and the expected time frame to build them. 

  • Marketing analysis: One to four weeks.
  • Visual analysis and creation of marketing plan: Two to four weeks.
  • Developing a website: Six to ten weeks. 
  • Marketing Implementation: Five to seven weeks. 

The time frame might differ depending on the industry you are in, your brand awareness strategy, and how effectively you implement it. 

Best Examples of Brand Awareness Campaigns

Let’s look at some of the great examples of building brand awareness that you can take inspiration from. 

1- Dollar Shave Club

Dollar Shave Club delivers personal grooming products (such as razors, moisturizer, sunscreen, and face wash). 

A family friend of Michael Dubin, the founder of Dollar Shave Club, asked him for help selling 250,000 razors he bought from Asia. Michael created a video, which he published on YouTube. 

At the start of the video, Michael says, “are our blades any good? No, our blades are ***king great”. Michael then talks about all the features of their blades and even shows it in action. 

source: dollar shave club

In just two days, they received over 12,000 orders and enough traffic to crash their servers. It’s been around eight years since the video was posted, and it has garnered over 26.8 million views

Key Takeaway: Create videos of your products and show them in action. 

2- Old Spice

Old Spice is a male grooming product manufacturer. They created a video that featured Isaiah Mustafa. The 30-second video focuses on different possibilities when “a man smells like Old Spice and not a lady.” 

source: old spice

As a result, the video went viral. Old Spice saw a 300% increase in traffic, a 50% increase in sales, and they became the #1 company for men body wash in the U.S. 

But that’s not it. Mustafa even responded to fans’ questions sent via Twitter and Facebook with follow up YouTube videos. More than 180 videos were posted responding to fans’ queries. 

As a result, Old Spice’s YouTube subscriber base increased to 65,000 from 15,000. Twitter and Facebook followers also increased by 2700% and 800%, respectively. 

Key Takeaway: Explain why customers should use your product and answer their queries related to it. 

3- Coca Cola

When it comes to soft drinks, Coca Cola is a household name. In 2014, Coca Cola launched the “Share a Coke” campaign, in which it replaced its brand name with popular names in the targeted country. 

Customers were encouraged to find names that held personal meaning to them and tweet the product’s image with the hashtag #ShareaCoke. 

source: share a coke campaign

The campaign was a massive success. More than 500,000 photos were shared using #ShareaCoke hashtag within the first year of the campaign. Coca Cola also gained more than 25 million new Facebook followers that same year. 

Key Takeaway: Personalize your product to capture your target audience’s attention and encourage engagement. 

4- International House of Pancakes

In 2018, IHOP changed its name to IHOb (International House of Burgers) temporarily. The main idea behind this was to tell the world that IHOP is now selling burgers. 

As a result of this name change, more than 20,000 articles flooded the internet. The company also received 36 billion social media impressions, and their burger sales quadrupled. 

The company then changed its name back to IHOP from IHOb after a few months, accepting that they did to spread brand awareness. They tweeted, “we’d never turn our back on pancakes (except for that time we faked it to promote our new burgers).” 

source: Ihop

Key Takeaway: When launching a new product, create a buzz about it. 

The Three Components of Brand Equity

Brand equity comprises the three basic components. 

1- Brand Perception

It is what your customers believe your product or service represents and not what you say it does. Various factors that influence your brand perception includes customer experience, product functionality, reputation, and word of mouth recommendation. 

Brand perception is crucial because it reflects what consumers think of your brand. Read online reviews about your brand and conduct sentiment analysis to get a fair idea of your brand perception. 

You can improve your brand perception by providing efficient customer response to all your customers. Building brand equity is yet another great way to change people’s perception of your company from negative to neutral, or from neutral to positive. 

2- Positive or Negative Effects

Your brand perception directly impacts the effects it has on your company. The effects can be either positive or negative.

If the brand equity is positive, customers will be willing to pay more for your products than for a generic item. An example of positive brand equity is Lacoste. A golf shirt with the alligator logo retails for much higher than similar apparel from a local manufacturer with no alligator. Many customers pay a higher amount happily because of the perceived value of Lacoste products. 

If the brand equity is negative, customers might choose products from other brands over your items. This might happen if an organization has a major product recall or causes a widely publicized environmental disaster. An example of negative brand equity is Volkswagen. In 2015, Volkswagen was accused of cheating emission tests in the U.S. As a result of this scandal, VW reported its first quarterly loss in 15 years

3- Value

Lastly, these effects return tangible and intangible values. Tangible values include profit, an increase in revenue, and inventory. Intangible values include brand awareness, goodwill, and reputation. 

Positive effects can help you get both tangible and intangible values. However, negative effects can diminish both the effects.  

For example, if your brand equity has positive effects, you will likely see an increase in profits and earn goodwill. If your brand equity has negative effects, you will probably see a decline in sales and customer loyalty. 

How to Build Brand Equity?

Kevin Lane Keller, a marketing professor at the Tuck School of Business at Dartmouth College, wrote a textbook, “Strategic Brand Management”. In the book, Kevin developed Keller’s Brand Equity Model, which consists of four key elements. 

  • Brand identity: It is crucial to create a brand that customers recognize. Ensure that your brand’s perception by consumers aligns with the way you want your brand to be perceived. 
  • Brand meaning: It refers to how you communicate “what your brand means” and “what it stands for”. There are two parts of brand meaning.
    • Performance: It includes the product’s primary characteristics, features, product reliability, durability, serviceability, service effectiveness, style, design, and price. 
    • Imagery: It includes your brand or product’s ability to meet customers’ demands on a psychological and social level. 
  • Brand response: It involves customers’ judgment about your brand and includes customers’ trustworthiness, likability, perceived quality of your products, the relevance of your products to a customer’s needs, and your superiority as compared to your competitors. 
  • Brand resonance: It is all about building a deep customer relationship. This encourages repeat purchases and increases customer loyalty. 

Building brand equity requires careful planning and execution. This ensures that your business thrives and stays that way for the long-term. 

Here are the seven steps to build brand equity: 

1- Differentiate Your Product From Your Competitors

The first step to build brand equity is creating a unique product. Your customers should recognize that your products are different than your competitors and are the better choice. 

The way you differentiate your products depends largely on the nature of your business and industry. Here are a few common things that almost every brand can leverage to make their product unique. 

  • Craft compelling messaging for your products that highlights your product’s unique features. Your marketing message should create the perception that your product is the best in the market, and there’s no substitute. 
  • Offer no-cost EMI, especially if your products are expensive. For example, Casper, a mattress brand, offers its customers no-cost EMI as well as a 100-night risk-free trial to differentiate themselves from their competitors. Though these options are not directly related to the product, they make Casper’s offer unique. 
source: Casper mattress
  • Differentiate your product from your packaging. For example, when I searched for “protein powders” on Amazon, I saw these products. Check out how Isopure differentiated its products in terms of packaging (not all). While every other brand is selling its product in a bottle, Isopure chose to use a bag that is easy to use and biodegradable. 
source: amazon product page

2- Communicate Brand Value and What It Stands For 

Customers are more likely to associate with brands that are not in the business just for money. 

Your brand value is related to the performance, reliability, effectiveness, and style of your products. It also includes how well your products meet the needs of your customers. 

Make sure to communicate your brand value via the right messaging to ensure your customers understand it. 

Also, tell the world what social causes your brand stands for. It could be anything like environmental change, feeding the poor, or something related to your industry. 

Companies that contribute to social causes and produce great products are more likely to have higher brand equity. 

LEGO Group is a great example of how brand value and social responsibility can be an asset to a company. In 2014, LEGO ended its 50-year partnership with Shell Global due to their plans to drill in the arctic. In addition to collaborations with organizations like WWF, LEGO also pledged to make all its products from sustainable materials by 2030 and packaging from renewable or recycled materials by 2025. 

LEGO was recently ranked as the world’s most reputable company by RepTrak, which lists only the highly reputed companies. 

source: RepTrak ranking

3- Build and Maintain Your Brand Image

Brand image refers to what people (even those who have never bought anything from you) think about your company as a whole. 

Here are five ways to build your brand image. 

  • Identify your target audience to create an effective and tailored marketing strategy. 
  • Ensure your marketing messages or announcements don’t hurt the sentiments of your target audience. 
  • Make your products unique and better than what is present in the marketplace. 
  • Deliver what you promise. Doing so will create a sense of belonging for your brand and increase customer loyalty. For example, if you say “the customer will get a cashback after the return window is closed,” make sure it reaches to the buyer without them having to approach you for the same. 
  • Position your company as a thought leader and expert in the industry. One of the ways would be to contribute to research related to your product or industry. Another way to position your company as an expert is by participating in podcasts, videos, or webinars to demonstrate you know what you are doing.  

Once you build a positive brand image, make sure it stays that way. Avoid getting involved in controversies and be transparent with your services. 

4- Offer Extraordinary Customer Service

Customer service is one of the strongest pillars that can either build or break brand equity. No matter how efficient your product is, if your after-sales service isn’t great, you won’t survive in the market for long. 

By offering proactive customer service, you can turn customers loyal and increase the LTV (customer lifetime value). 

Here are some ways to offer extraordinary customer service:

  • Provide a fast response to your customers’ queries. 
  • Ensure your customers’ problems are solved asap.
  • Respond to negative reviews online and put efforts to make the reviewer’s experience positive. 
  • Offer a 24X7 customer service. Incorporate live chatbots in your website to provide the best customer support. 
  • Check on your customers regularly even if they haven’t raised any complaints. 

5- Use Customer Feedback to Improve Your Products and Services

Using consumer insights to improve your products and services shows that you care for the people’s needs. When a brand goes the extra mile for the customers, it is likely to be considered a good company. 

Read your product reviews (mostly one and two-star) to determine what problems many of your customers are facing. Then make efforts to solve them in your next product launch or update. You might as well choose some reviewers randomly to try your updated product for free. 

Also, leverage social media listening to find what people are talking about your brand or product in social networks. Tools like Sprout Social can help you analyze real-time conversations in social media related to your brand, products, and services. As you can see in the below image, it consists of all the mentions of Sprout Coffee in different networks, such as Facebook, Twitter, and Instagram. 

source: sproutsocial

6- Adapt to Changes in Marketplace

Customers’ needs change over time. To stay relevant in the market, your business must adapt your products and services in response to the changes. 

You need to understand customers’ needs and optimize your product offerings carefully. One of the biggest examples of adapting to changes in the marketplace would be the shifting of offline-only retail brands to ecommerce. 

With the rise of internet users and online shopping, many brands created their ecommerce store. 

Here’s how you can identify changes in the marketplace:

  • Read research reports published by industry leaders. It will most likely include trends that might be the next big thing in your industry. 
  • Follow major publications and influencers in your industry to stay on the top of trends and changes they are talking about. 
  • Conduct customer surveys to get insights into their changing needs.
  • Stay active on social media and check what your target audience is talking about. 
  • Check what your competitors are inventing. Check if their invention is due to the changing needs of your customers. 

Once you identify the trends, make sure to create strategies to adapt to it. 

For example, Zara sells less of each item. Instead of mass-producing each individual style, Zara launches new collections twice a week. They also rely on feedback from all retail outlets. Store managers share feedback on what shoppers like, dislike, and what they are looking for. Zara’s designers leverage the demand forecasting data to build products as per the latest trends in the market. As a result, the company always stays fresh, adaptable, and unique. 

7- Engage With Your Target Audience Regularly 

Companies that engage with their target audience regularly are trusted more than others. When you take time to converse with your social media followers or customers, it makes them feel that you care for them. 

Here are four great tips for engaging with your target audience.

  • Build a team to regularly engage with your customers on social networks and respond to their comments. 
  • Send emails to your customers, asking if they need any assistance in using your product. 
  • Go live on Facebook and Instagram and talk to your social media followers. 
  • Build a community or online forum. This way, you will be able to engage with your customers directly, answer their questions, share information about your products, and have discussions related to your industry. 

Tripoto is one of the most notable examples of a brand that has created a community to engage with its customers. Tripoto has created an Instagram account named “tripotocommunity,” where they share travel pictures posted by their target audience. This has helped Tripoto emerge as a leader in the travel industry. 

source: Instagram


Brand equity is the non-monetary value of a company that it’s target audience decides. Companies with higher brand equity see a better profit margin, sustain for longer, and have a loyal customer base. 

To create and improve your brand equity, make sure to build brand awareness, enhance the perception of your products, communicate your brand value, and offer proactive customer support. 

Simone Somekh

Simone Somekh

Simone Somekh is a New York-based writer and editor who specializes in marketing and communications for B2B SaaS companies. He teaches Communications at Touro College and he is the author of an award-winning novel published in four languages.

Simone Somekh is a New York-based writer and editor who specializes in marketing and communications for B2B SaaS companies. He teaches Communications at Touro College and he is the author of an award-winning novel published in four languages.