Here’s the thing about brand equity, according to experts

Why is Netflix your favorite place to watch shows? Why do you always buy Nike sneakers? Why are Pringles in your snack stash instead of store-brand chips? 

Maybe it’s because you associate these brands with quality, reliability, or status. Maybe it’s because they make you feel good. Maybe it’s because they’re favorites with your friends. 

69% of consumers say they’d choose a trusted brand over the budget-friendly alternative. 

This comes down to brand equity — consumers’ perceptions of a brand’s value. 

In this post, we get insights from the experts on what brand equity is, how it influences a company’s financial performance and the best ways to measure it.

“Brand equity refers to the consumer’s perceived value of a brand. Your brand equity = how pervasive and likable your brand is in the eyes of the consumer. If you ask ten people to define brand equity, you are likely to get ten (maybe 11) different answers as to what it means.” 

- George Christodoulides, Lecturer in Marketing at The University of Birmingham and Leslie de Chernatony, Professor of Brand Marketing at Università della Svizzera italiana

While many marketers and researchers have argued about the definition of brand equity, it’s loosely agreed that brand equity refers to the consumer’s perceived value of a brand. 

Your brand equity is how pervasive and likable your brand is in the eyes of the consumer. 

It’s trust. It’s reputation. It’s story. 

It’s why you grab the box of Chips Ahoy over store-brand chocolate chip cookies.  

For consumers, researcher Kevin Lane Keller says that assessing a brand comes down to two essential things: 

1. Judgements — consumers judge a brand based on factors like quality, credibility, usefulness and superiority in comparison to competitors. 

2. Emotions — consumers assess a brand based on how it makes them feel. The six positive brand feelings include: fun, excitement, warmth, social approval, security and self-respect. 

As Danica Popovic says, “In order to build a strong brand you must shape the way your customers think and feel about it. In other words, there’s no brand value without customer perception.” 

Feel-good brand assessments are why people have favorite brands. 

Take Gen Z  — who rank brands like Netflix, KitKat, and Nike as some of their go-to brands, while millennials say that Apple, Amazon, and Nike are their top brands. 

Here’s a few of Gen Z’s favorites for example:

Here’s some millennial favorites:

While brand perception and the subjective world of consumer emotion or judgment may be hard to measure, it’s clear how consumers' opinions on a brand can have a direct impact on your profits and customer retention. 

71% of people buy more from brands they trust. While 81% of consumers say their buying decisions are impacted by their friends’ posts on social media. 

“A brand is an intangible asset in that it has no physical substance, including not becoming cash in a year. Nonetheless, a strong brand has value to the consumer and accordingly can be expected to generate financial value to the company over time.”

— Ph.Ds Bubby Calder and Mark Frigo

Market share is the percentage of total sales generated by a company in a specific industry. 

You can work out market share by dividing your business’ sales over a defined period by the industry’s total number of sales over the same stretch of time. 

How does market share relate to brand equity? 

People pay for what they value. They pay for products and brands that have a great reputation and that make them feel good. The higher your market share, the more brand equity your brand is likely to have.

From our analysis above, we know that Nike is repeatedly ranked as one of consumers favorite brands. While they have a market share of 43.7% in the sportswear industry.  

Here’s Amanda Lane from GrowSurf: 

“Companies with high brand equity are often more visible in the marketplace whether it's through advertising campaigns, consistent branding and messaging, or positive word-of-mouth from brand advocates. The more exposure and positive associations your brand receives, the easier it is to edge out competitors and increase market share.”

Because brand equity is made up of ineffable and hard-to-pin-down elements such as consumer emotion and opinion, it can feel like a hard concept to define and analyze. 

However, Landor’s Nick Cooper believes that it’s one of the most common myths that brand equity can’t be meaningfully measured. He says: 

“It’s true that there are plenty of established tools for measuring demand generation. However, brand can be measured equally effectively, not least through quantifying brand equity and monetizing the impact of brand.”

By breaking down brand equity into quantifiable concepts that you can easily measure, you can start to track and analyze brand equity as a whole. Let’s take a look. 

Brand awareness 

Brand awareness is one concept that can help you more easily measure brand equity. 

Brand awareness refers to how familiar consumers are with your brand. It’s all about how easy your brand is to recognize and remember. 

We may call brands with high brand awareness “trending,”, “cool” or “popular.” 

The ultimate example of a brand with a high level of brand awareness is Google — with the term, “Google it,” becoming synonymous with running an internet search.

Total brand value

Total brand value is all about monetizing the impact of a brand.

According to Qualtrics:

“If your company were to merge or be bought out by another business, and they wanted to use your name, logo, and brand identity to sell products or services, your brand value would be the amount they would pay you for that right. This is market-based brand value.”

Total brand value is how much your brand is financially worth. It’s how much your brand would go for if you sold it. 

While total brand value is a tangible measure of a brand’s power, the tangible and concrete can point to “hard-to-pin-down” indications of a company’s power and influence like brand equity.

Just take a look at some of the brands with the highest brand value:

• Apple at $516.6 billion  

• Microsoft at $340.4 billion

• Google at $333.4 billion

Brand relevance 

Brand relevance is a metric that measures how relevant people feel your brand is to their wants and needs. 

David Aaker says, “Winning under the brand relevance model is based on being selected because competitors were not relevant rather than not preferred, a qualitatively different reason.”

Thibaud Clement goes on to say that brand relevance is often about how people feel, rather than think:

“It is not about how customers think, but how they feel, prompting statements such as “watching Netflix makes me feel good,” “driving a Tesla makes me feel smart,” and “shopping at Whole Foods Market makes me feel responsible.’” 

Brand’s with high brand relevance create products that are affordable and make life more fun, easier and more meaningful. More than that, they connect with consumers’ values and self-perceptions.

Smart people buy Teslas. Ethical people shop at Wholefoods. These consumers wouldn’t go to another business because those businesses aren’t relevant to who they are and how they see themselves. 

Now we’ve broken down brand equity into definable concepts, let’s take a look at some of the best tools to measure them. 

Surveys 

Surveys are one of the best ways to measure brand awareness and brand relevance. 

Because surveys are easy to run online and people can do them wherever they want, on any device, they typically have a high response rate. As such, you can get a ton of insights into your customers’ thoughts and feelings from just this source. 

However, high response and completion rates depend on great survey design. 

At Zappi, we’ve studied how to design surveys in a way that supports the respondent experience. 

Some of our best practices include: 

1. Optimized for mobile: Many brands overlook stepping up the mobile survey experience — putting desktop first. We always optimize our surveys for mobile, giving respondents an easy experience across their devices.

2. Short and sweet: Based on thousands of surveys we’ve run, the most engaged responses always come in the first 10-12 minutes. Keep your survey length no more than 10 minutes to help make sure your responses are reliable.

3.  Low dropout: We mandate a 20% minimum inclusion rate in every survey. 

You can use Ask Anything, our ad-hoc survey tool to survey users about brand assets (from your name to your logo), brand sentiment and brand perception. 

Use our predefined consumer survey solution to find the best questions to measure your brand’s reputation and awareness. With easy-to-read automated reports, you can spot patterns in your brand equity data over time. 

Social listening 

Social listening involves pulling up the social media platforms where your customers hang out and seeing how they talk about your brand and products. 

Whether it’s Reddit or TikTok, social listening can give you great insights into how your customers perceive you. 

Here’s an example of a Reddit user sharing why they think a Huda Beauty eyeshadow palette is worth the price tag:

"Yes I really do think they are! Although I'd always suggest that you wait for a sale because those come around pretty often, and it puts less pressure on the purchase. That said, quality + performance-wise, they're the only shadow I have that I wouldn't feel like a sucker paying full price for.

I've spent top dollar on ND, CT, UD, TF, Viseart, Dior, and I've always felt like I overpaid a bit, even if I like them. But I've never felt that way with my Hudas. They really spark joy with their performance, versatility and the way they look on my eyes. But yeah wait for a discount, especially if this is your first Huda purchase because you might not feel the same as I do."

You can use social listening to: 

1. Find honest opinions on your brand and products

2. See whether your brand, products, or campaigns are trending 

3. Understand where your brand or product ranks in comparison to your competitors 

To get started with social listening, send out a short survey and ask your customers about which social media channels they like to use. 

Once you have a list of their go-to networks, look beyond the typical social media platforms and brainstorm digital hangouts like: 

• The comment section of your blog posts 

• Online reviews on TrustPilot or Google 

• Specialized forums — say you’re a B2B brand, many of your customers may spend time on dedicated industry forums

Next, make a list of target keywords or search terms you’ll use to search for your brand or competitors. Use tools like Sprout or Brandwatch to track your brand mentions. 

Google Analytics 

There are a number of ways you can use Google Analytics to measure brand awareness and brand relevance. 

Take a look at some of the best metrics to help you measure them:

• Web traffic and search volume: — High web traffic and search volume suggests that people are aware of your brand or products and are looking for them. 

• Click-through-rate for PPC ads: — The higher your CTR, the higher your visibility and relevance.

• Referral traffic: — Who is referencing your site, brand, or products? Use Google’s referral traffic to keep track of backlinks.

• Average session time: — The more time people spend on your site, the more they’re getting out of your brand or products. Longer session times suggest higher brand and content engagement and more time spent browsing your product pages. 

Now you know what to measure and have the right tools, read on for five steps for measuring brand equity. 

1. Choose what to measure 

Above, we covered three overarching concepts you can use to measure brand equity. At this stage in your research, it’s time to break these down into different research topics, such as: 

• Brand or product awareness: — To test brand or product awareness, you might go for a picture-based survey and show people product images or logos within your product category then ask them which ones they recognize.

• Brand recall: — How well can respondents remember your name, logo, products, or slogan? 

• Customer satisfaction: — An important topic to cover if you want to understand and measure brand relevance. Metrics such as your Customer Effort Score, Customer Satisfaction Score, and Net Promoter Score can all help you understand how relevant and useful your customers consider your products. 

• Competitor performance: — Where does your brand stack up among your competitors? Add a competitor analysis into the mix to understand how your customers see your brand in comparison to other names in your industry. 

• Financial values: — Beyond profit margins, there are a number of financial metrics you can use to get a sense of your brand equity, such as revenue growth and price premium. 

2. Choose your research approaches 

The next step is to choose your research approaches. The right approaches depend on what you want to measure. 

Above, we covered some of the best tools you can use in your research — including Zappi’s predefined and optimized surveys, social-listening tool Sprout Social, and Google Analytics. 

You can also add other approaches in the mix, such as: 

1. Focus groups: Focus groups involve bringing together your target audience and talking brand with them. Focus groups can often lead to deeper insights as participants explore ideas together and bounce opinions off each other.

2. Interviews: A great way to get more in-depth insights into your customers’ opinions and feelings about your brand. 

3. Different types of periodic surveys: Such as email, Net Promoter Score, and telephone surveys. 

It’s best to use two to three different approaches for each metric. 

By using multiple tools, you can triangulate your data — combining multiple data sources. This allows you to: 

1. Validate your responses: — If your consumer’s responses to your brand track across data sources then you know you’ve got a reliable measure of brand equity.

2. Spot trends in your results: — The more data you have, the more trends you can spot.

3. Cover any weaknesses in your data or data gathering methods: — By using different methods and datasets, you can spot any gaps in your research and help cover the weaknesses of each method.

3. Validate your findings 

To validate your research findings, check to see whether your data is: 

1. Accurate: — Does it give a true representation of the way your customers think and feel about your brand? Is your data reliable and representative? 

2. Complete: — Are there any gaps in your data? Does your data offer the full picture on your consumers’ experience and perceptions of your brand? 

3. Consistent: — Is your data consistent across your sources? Consistent data is trustworthy data. 

If your data fits this criteria then it’s ready to process and analyze. 

4. Publish your research 

Original research is a great way to get your brand noticed and improve your reputation with people who are already your customers with 74% of B2B buyers saying that original research impacts their buying decisions.

Once you’ve analyzed your data, why not turn your research findings into a long-form blog post or downloadable report? 

Read on for three more tips to help you measure brand equity. 

1. Conduct regular brand tracking 

Consumers’ perceptions of your brand can shift each month or even every year. One misguided ad, a trending news story, or new competitor can have a huge impact on the way consumers see you. That’s why brand tracking, measuring your brand equity over time, is essential to understanding brand equity. 

There are a number of ways to approach your research, you can schedule research: 

1. Each quarter 

2. Each year

3. Every 18 months (this may be a better option for you if you’re a smaller business with a limited budget)

4. After a campaign roll out 

2. Keep track of changing definitions 

Every year, new researchers are bringing out new models and rolling out new definitions to help us better conceptualize brand equity. New models and definitions can give you fresh ways of understanding and measuring brand equity. 

3. Do a brand audit 

How do you work on your brand equity from the inside out? With a brand audit. 

Review your products, messaging, visual identity (e.g. logo and brand colors), and digital channels and analyze what your biggest strengths and weaknesses are. 

You can also rely on many of the research strategies and tools we listed above to do your audit — such as Google Analytics, Zappi’s surveys, and social listening tools like Sprout Social. 

A brand audit can be an important tool if you notice a drop in brand equity — you can use one to help you figure out where your brand is going wrong with consumers and what you can do to improve your consumer sentiment.

Brand equity is essential to understanding what consumers think and feel about your brand. By regularly rolling out brand tracking, you can make sure your understanding of consumer sentiment is up to date and reliable. 

If you’d like to learn more about how Zappi can help you improve your survey response rates and find out the best questions to ask consumers, reach out to us.