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Understanding brand equity

Every day, new businesses start up in the hopes of stealing a piece of that proverbial pie. This increasing saturation means we need to work harder than ever to build and maintain a strong position in the market.

The problem is, many businesses rely purely on their marketing activities to achieve this. But to build those really powerful connections that allow us to withstand time, competition and other obstacles to success, we need to take a step back and look at the bigger picture.

This is where your brand comes in. And more specifically, your brand equity.

So, what is brand equity?

In simple terms, brand equity is the significance a brand holds in the eyes of a consumer. It’s the value they place on your brand based on things like experiences, perceptions and associations. It’s the reason you’re more likely to pick up a can of Coke in the supermarket than a can of home brand cola.

As a business, building and maintaining your brand equity represents a massive opportunity for long-term growth. By building and leveraging the equity of your brand, you’ll achieve a stronger competitive advantage, greater customer lifetime value, higher revenues and substantial negotiating power. It also means that your existing customers will be really receptive to new products, services or markets should you decide to expand your offering.

How is brand equity measured?

David Aaker’s brand equity model

According to renowned marketing specialist and theorist, David Aaker, there are five key elements that make up your brand equity. Together, these elements allow you to gauge the value of your brand and provide clarity on where more work might be needed.

  • Brand loyalty
  • Brand awareness
  • Perceived quality
  • Brand association
  • Other proprietary assets


david aaker's brand equity model


Brand Loyalty

When your customers align with your values and what you do, and repeatedly seek out your products or services rather than trying out one of your competitors, you’ve got yourself a loyal customer. Loyalty is incredibly powerful to your brand for a number of reasons, but primarily the fact that they’re much easier to sell to and they actively advocate for your brand within their social groups.

Why focus on brand loyalty?

  • Greater lifetime customer value 
  • Reduced marketing costs
  • Leads to brand advocacy 
  • Social proof attracts new customers

Brand Awareness

Brand awareness (AKA brand salience) is all about how well known your brand is. When your brand has high awareness, it’s likely you’ll be the first option that springs to mind when a customer has the want or need for your products or services. 

Why focus on brand awareness?

  • Brand recall increases opportunity for consideration 
  • Familiarity leads to reputable & trustworthy perceptions
  • Reputability and trustworthiness impacts conversion

Perceived Quality

Quality, or perceived quality, is essentially the perception that your products or services rate highly in terms of things like durability and functionality. If your brand has high perceived quality and a great customer experience, customers are far more likely to favour your products or services.

Why focus on quality?

  • Quality is favoured above price or features
  • Encourages perception of greater value
  • Aligns with sustainability movement (where products don’t need replacing regularly)

Brand Association

Brand association is all about your brand image and the types of thoughts or ideas that people connect to your brand. It’s the attributes that people associate with your brand, generally formed from deep seated beliefs about what you do and how you do it. If your customers align with your brand image, they’re likely to use your products and borrow from your brand to identify themselves in the same way. 

Brand association can be positive or negative and can be hard to change once a customer has formed these associations in their mind. 

Why focus on associations?

  • Form/maintain positive sentiment
  • Improve negative associations
  • Own your market position

Proprietary Assets

Proprietary assets are the safeguards put in place by your brand to ensure no other business can replicate what you do in a way that may confuse consumers into thinking they’re doing business with you.

Examples of proprietary assets include copyrights, trademarks, patents, domains, software and other related assets.

Why focus on proprietary assets?

  • Protect your intellectual property 
  • Safeguard the integrity of your brand

What can you do to improve brand equity?

It’s all well and good to know that building strong brand equity is important, but now what?

Unfortunately, there’s no quick fix or guaranteed method to make it happen. But what you can do is dedicate more of your energy, resources and budget towards developing a really strong brand strategy.

At its core, brand strategy will help you define what you really want your brand to be recognised for and how you can achieve it.

It will help you determine your distinctive market position, and how to leverage it to stand out from your competitors. And it will help you truly connect with the people you serve and understand how to deepen those connections in order to foster greater brand equity.