The Components of Brand Equity
Brand equity has many, many facets. Pay attention to the core components:
Brand Awareness
How familiar customers are with your brand.
If your brand has high awareness, it’s the first name that comes to mind for a given product or need. This is often referred to as mental availability. People can’t prefer your brand if they don’t know it exists! Building awareness means ensuring your brand is visible and recognizable.
Which sounds more natural to you: “I searched for it online” or “I Googled it”? We both know the answer. Google’s name is so well-known it became a verb, indicating dominant awareness (Brand vs Performance Marketing: Why Emotional Resonance Drives Growth).
Brand Loyalty
The degree of attachment customers feel to your brand.
Loyal customers repeatedly choose you over competitors, often out of trust or emotional connection. High loyalty means a stable base of repeat business and word-of-mouth referrals. These customers are also more forgiving of the occasional slip-up.
Consider the loyalty of Apple customers - many eagerly buy the newest iPhone each year even if last year’s model works fine. They’re not just buying a phone; they’re staying faithful to a brand they love. Similarly, think of how some coffee lovers refuse to go anywhere but their Starbucks, or the devotion contractors often have to their preferred power tool brand.
Perceived Quality
The public’s perception of the quality and value of your products or services.
This doesn’t just mean actual product quality, but the reputation for the quality your brand carries. Strong perceived quality lets you command premium pricing and gain customer trust before they even try the product.
This is bread and butter for luxury brands. For example, a plain white t-shirt with a Balenciaga logo can sell for hundreds of dollars, purely because of the brand’s aura of high fashion and quality. Customers assume if it’s Balenciaga, it must be superior (and worth the price tag). In contrast, if your brand is known for cutting corners, people will view everything you offer with scepticism.
Managing quality perception from great products, consistent service, to packaging and user interfaces is essential to communicating the quality level of what you offer.
Brand Associations (or Brand Image)
The ideas, feelings, and associations that people connect with your brand.
This includes your brand’s personality, values, and the emotions it evokes. Every impression - from your logo’s color, to your advertising tone, to your community involvement contributes to these associations. Positive, unique associations (like being seen as innovative, eco-friendly, or customer-centric) build stronger equity.
When you think of Volvo, you might think “safety.” When you think Patagonia, you might think “sustainability”. These associations didn’t happen by accident - they result from deliberate branding and real actions that shape public perception.
If consumers associate predominantly positive attributes with your brand, you have high brand equity. The goal is to own meaningful concepts in customers’ minds (for instance, being “the safe car” or “the friendly neighbourhood café”). Take a moment to consider what words or feelings do you want people to associate with your business? Those are the associations to cultivate.
(Bonus) Proprietary Brand Assets
Things like trademarks, patents, and partnerships that give you competitive advantages.
These legal/technical assets help protect your brand’s value. For example, owning a trademark prevents copycats from confusing your customers. For most business owners, the customer-facing components above matter the most, but it’s important to ensure your brand name and logos are legally protected as you grow.
But really. What is the point?
By focusing on building awareness, nurturing loyalty, ensuring quality, and creating positive associations, you actively increase your brand equity. These components are interrelated:
Greater awareness can lead to more customers trying your product.
If it’s high quality it will boost loyalty and positive associations.
Leading to recommendations that further increase awareness.
It’s a virtuous and compounding cycle when managed correctly.
Explore with us why this all matters and how it translates into real business benefits.
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