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Brand equity is the dollar result of having customers who are loyal to the brand and willing to pay more to get it.

Brand Equity Is Result Of Loyal Customers

Brand equity is a term that causes a lot of confusion among marketers. Simply put, it is the dollar result of having customers who are loyal to the brand and willing to pay more to get it.

In the U.S., there is no widely accepted measurement of brand equity. Therefore, if you want to measure brand equity, you first have to decide how to measure it!

Measuring Brand Equity

Copernicus Marketing identifies some of the more frequently used elements for measuring brand equity:

Brand Permeation – brand and ad awareness and distribution
Brand Distinctiveness – brand differentiation, uniqueness and superiority
Brand Quality – overall reputation for quality
Brand Value – the extent to which the brand delivers what buyers pay for
Brand Personality – congruence of image and who the buyer is or wants to be
Brand Potential – extent consumers will pay more (in time, money or effort) to get this brand
Competitive Inoculation – extent consumer will stick with brand in times of adversity or competitiveness (loyalty)

The appropriate measure of brand equity for you might be a weighted combination of a few or several of the above measurements. Since there is no widely accepted measurement used, it is critical to gain organizational consensus on the methodology and calculation for measuring brand equity before attempting it.

Using Brand Equity To Evaluate Executives

There are those who claim that brand equity is the only measure on which executives should be evaluated. In essence, if brand equity is not increasing, why should your exectives be rewarded? Measuring brand equity is challenging, but may be useful for organizational expansion and growth.