Reliable Ways To Measure Brand Equity

A popular term in the marketing industry is brand equity. It defines the depth of the brand name and indicates the customer perception’s value of your organization. It denotes the market capitalization of an organization that is not defined by liabilities, assets, intellectual property, or revenues. In short,

Brand Equity = Total Market Value Of The Company – Each Measurable Factor

Also, brand equity is driven by the customer experience quality that includes marketing and branding. It has an emotional impact and influences customer behavior to a larger extent. For example, consider the latest iPhone. It has an average review, still, customers purchase it. This is due to the bond that customers have towards the brand. 

Brand equity has the following three components:

  • Consumer Perception
  • Effect of the perception towards the company
  • Effect’s value

These parameters are further cut down into the following:

  • Tangible factors 
  • Intangible factors

Tangible Factors

As per the marketing brand strategy, a brand should measure brand equity by considering the following key metrics:

Tangible factors denote quantitative values like profit or loss revenue and sales numbers. Intangible factors denote qualitative values like your brand’s consumer awareness, goodwill, etc.

  • Knowledge Metrics
  • Preference Metrics
  • Financial Metrics

When you measure these metrics for measuring brand equity, you will be aware of the brand equity components. Let us discuss each of the metrics for brand equity measurement.

1) Knowledge Metrics

This metrics is a popular metric used for the measures of brand equity and measures brand popularity. The knowledge metrics go deeper into your brand’s popularity than just a yes or no. These metrics evaluate the consumer’s awareness and your brand’s association all through the many stages like top recognition, recall, aided, and unaided. Consumer awareness is classified into the following types:

a. Functional Associations

This relates to the product or service usage. When you evaluate your brand’s functional, you need to consider the following queries:

  • Are the customer/prospective customers aware of the functionality of the product?
  • Are they aware of the value that comes out of it?
  • Are there any misguided functions in them?

These answers that you get out of these questions to provide valuable insight into your company. This data concerning the functional associations would make you understand the way your customers make use of your product.

b. Emotional Associations

This relates to the way your customers feels about your product or services. When you evaluate your brand’s emotional view, you need to consider the following queries: 

  • What do they feel about your product purchase?
  • What is their experience with its first-time usage of the same?
  • Does the customer think about your service even when they do not require it?

These answers that you get out of these questions to provide valuable insight into your company. This data concerning the emotional associations would make you understand the way your customers feel about your brand.

When you focus on knowledge metrics, you would be collecting a lot of data. With this data, you can have a good understanding of your product or service. This would guide you to improve your services to your customers.

Image Source: WebStockReview

2) Preference Metrics

This metric is a popular metric used for measuring brand equity and is easy to measure. Preference metrics deal with customer perception of your brand. But this is measured accurately concerning the company’s position. When you look at these metrics, the following factors are to be considered for the measure of brand equity.

a. Brand Relevance

This parameter deals with a company’s capacity to find out and give some benefit to the brand. It also guides to bring into line the brand’s value to the company. Every company whose brand relevance is high would have a minimum one Unique Selling Proposition (USP) that sets aside from the competition.

b. Accessibility

This deals with the capacity that a brand must reach the target market and then be able to pass on the proposed value to the respective customers. Consider for example the Domino Pizza outlet. There is a chance that in each area you could find one outlet making its accessibility easy. The company can also place stalls inside various popular malls, department stores, and supermarkets.

c. Emotional Connection

This deals with the brand’s capacity to form a bond with the customers and this leads to loyalty.

3) Financial Metrics

This metrics is a popular metric used for measuring brand equity and a straightforward way to measure. When you analyze the financial situation of your company, you would get an idea of your brand. The most important financial metrics for a company is the following:

a. Market Share

This refers to the percentage of complete sales in the domain of your market.

b. Transaction Value

This refers to the price that you provide for your product or service.

c. Price Premium

This refers to your company’s capacity to provide your product or service at a higher price than the average price to enhance its appeal.

d. Revenue Generation

This refers to the amount of money that your company generates out of selling the products or services. If the trends are likely to continue, the potential revenue that could come out of your product or service.

Revenue Generation
Image source: Novelus

Let us discuss how to measure brand equity.

You need to have a strong foundation for the current equity of a brand. Otherwise, a company would struggle to set improvements for metrics. There are many ways on how to measure brand equity and customer retention and satisfaction. Below list the main factors for brand equity measurement.

1) Brand Awareness

An important factor for brand equity is the customer knowledge of your products and services. You should be aware in-depth about the way your customer sees the brand. Gaging brand awareness amongst your target audiences can be taken in many forms. Few techniques to find out to know your ideal customers are the following:

  • Focus groups and Surveys
  • Web Traffic
  • Brand and products search volume
  • Reviews and Social Mentions
Image source: 3nions

2) Consumer Preference

One main factor for daily purchase decisions is consumer preference. Due to this, a customer can decide to go a step ahead and spend more money to get the product or service that they prefer. Customer preference can be measured through sales data, surveys, and focus groups. Customer preference includes the following:

a. Brand Importance

This deals with the depth in which your customers feel your brand is worth and unique than the ones provided by your competitors.

b. Availability

This deals with the depth in which your products or services are available in your target market.

c. Emotional Bond

The brand’s main strength is to form an emotional connection with their customer. It is all about brand loyalty.

d. Brand Value

This parameter measures whether your customers are ready to pay the amount specified for your products and services.

3) Financial Situation

Finance is the focal point for any business. The finance parameter that surrounds the measure of brand equity is directly related to the performance of the brand’s sales. If the finance value concerning your brand is increasing, then your revenue would also be more, and both tend to move in the parallel direction. Measuring brand equity with regards to the financial factors includes the following:

  • Premium price over the brand’s competitors
  • The average value of the transaction
  • Value of the customer lifetime
  • Sustained growth rate
Financial-Situation To measure Brand Equity
Image Source: EarningDiary

4) Output Metrics

This is a very important factor to be considered while measuring brand equity. When your brand is devoting considerable time and budget for developing brand equity, there should be an outcome shown with the effort. The output indicates the measure of the marketing activity that measures the assets that are shown to the public. It looks at the way the marketing materials and the asset type that is displayed to the marketplace. The output depends on the influence of your brand in the market. Using the following ways, you can find out the way your asset impacts the markets and getting transformed into output:

  • Market campaign and asset utilization
  • Products sales
  • Customer acceptance for loyalty programs
output-metrics to measure brand equity
Image Source: Eureka Labs

5) Local Marketer Perception Metrics

You need to think about your local target markets as your customers for distributing brands. Keep a distributed brand management team in place, and your local representatives would have a great influence over your brand equity metrics like the following:

  • Local advertising
  • In-store customer experience awareness
  • Preference
  • Financial habits

These factors would influence the brand’s success and make a good experience for local customers. Sometimes, a franchise that does not have a connection with your brand may not be successful over the marketing assets. Hence, your local outlets should be responsible to increase your customer experience. When the emotions of the local market are met, you can easily identify whether your brand equity is on the rise or decline. The various ways where you could measure your brand perception are the following:

  • Surveys
  • Focus groups
  • Rate of adopting the software
  • Rates for deploying various campaigns

6) Competitive Metrics

The competitive metric is a must for measuring brand equity. Your brand’s competitor is very important and has a direct impact on your brand’s equity trends. In case the competition comes down and you launch a campaign advertising to adjust the price. In this case, your customer preference would dip down. So, performing competitive metrics can identify and disclose areas where your competition would not be adding value to your customers. It could be due to various reasons like unsatisfied customer experience, missing product, pricing, etc. It can also tell various strategies and campaigns that would have vibrated with your customer base. The competitive metrics for brand equity measurement are the following:

  • Market Share
  • Rate of Customer Acquisition
  • Lift of Sales
  • ROI of various distribution channels
Competitive Metrics To measure Brand Equity
Image Source: Sales Hacker

Ways To Build Brand Equity

Having discussed how to measure brand equity, let us see the ways to build brand equity.

1) Create Your National Brand

Your brand requires you to reach many people. Making use of traditional and well-established techniques to create your brand on the national level would help you to increase your customer value and local affiliates as well. The various techniques to expand your brand to the national level are the following:

  • Improve brand position
  • Express your brand story
  • Improvise on your marketing tools for international brand consistency
  • Improve brand messaging using the market feedback that includes consumer and local market

2) Improvise On The Performance Of The Local Market

From the local side, brand equity is inclined by the customer experience quality and its consistency. When your customers come across your product in a national advertisement, decide to purchase it they would create a great experience with it and create long-lasting brand equity. You can easily build brand equity through good execution. When you deliver great experiences consistently at the local market, it would trigger the brand management teams to define the expectations clearly and a proper process would be established and be set in place. It could also be using technology and make it easy for dual communication between the brand management team and the local marketers.

3) Provision Of Local Innovation

It would be an uninteresting experience if your brand does not provide frequent updates. For a successful brand to flourish, brands would require thinking of new ideas and find out interesting methods to maintain customer excitement and engage them. To get this, there are two main brand consistency types:

a. Repetition

This indicates the same thing again and again.

b. Innovation

This indicates the same idea to be expressed in a unique way frequently.

Ways to Build Brand to measure brand equity
Image Source: Ad On Digital

When there is semantic consistency, the brand would be boosted up and be excited whereas a rote consistency creates customer trust. For a distributed enterprise, both semantic and rote consistency should be supported to get the right innovation.


It is a fact that the way your target customers treat your brand would regulate your business performance. Measuring brand equity should be a part of your marketing strategy and analyze the factors that led to the brand value. Brand equity measurement would do wonders for your business.

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