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By CampaignDrive on August 13, 2019

6 Ways to Measure Brand Equity and How to Build It [Updated 2019]

As you know, brand equity is the value of your customers' perceptions of your organization. It is the market capitalization of a company that isn't defined by assets, liabilities, revenues, or intellectual property. At a basic level, brand equity is a company's total market value minus each measurable factor.

In fact, brand equity is the reason world-renowned brands like Apple can command premium price points for products. It is estimated that Apple's brand value is $154.1 billion, or nearly three times its total annual revenue.


Additionally, brand equity is driven by the quality of the customer experience, including branding and marketing. It's built by emotion and impacts customer behavior; it's the reason why customers still line up to buy the latest iPhone, even if it gets mediocre reviews.

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Part One: How to Measure Brand Equity

Without an understanding of a brand's current equity, organizations can struggle to set metrics for improvement. The fact is, there are a number of ways to measure brand equity and customer satisfaction. There are six distinct factors that enable a comprehensive understanding of distributed brand equity:

1. Brand Awareness

Customer knowledge of your products and services is an important part of brand equity. But even better than customers knowing you, is customers not being able to avoid thinking about your brand. A leading indicator of the consumer's awareness of your company is “conversation share,” or the amount of time your brand comes up in everyday conversations about the products and services you offer. Measuring brand awareness among your target customers can take many forms. Some methodologies used to understand how aware your ideal customers are include:

  • Surveys and focus groups
  • Web traffic
  • Search volume for your brand and products
  • Social mentions and reviews

2. Preference Metrics

Consumer preference is a powerful factor in daily purchase decisions; it’s the reason a customer may decide to travel further and spend more money to access a product or service they really like. Aspects of customer preference that can be measured through focus groups, sales data and surveys can include:

Brand Relevance: The extent to which your customers agree your brand provides unique and specific value that is not offered by your competitors.

Accessibility: The ability to provide your target market with your products/services.

Emotional Connection: Your strength in forming emotional connections with customers, a key factor in loyalty.

Brand Value: A measure of how much your customers are willing to pay for your products and services.

3. Financial Metrics

Financial metrics surrounding brand equity are directly tied to sales performance. If these indicators, related to the financial value of your brand are increasing, your revenue is likely to be moving in the same direction. Ways to measure brand equity through related financial aspects include:

  • Price premium over competition
  • Average transaction value
  • Customer lifetime value
  • Rate of sustained growth

4. Output Metrics

What if your brand is investing time and budget into brand equity-building and you don’t see results? Output is a measure of marketing activity, which measures the marketing assets that get released to the public. Output looks at how often marketing materials are released, and the type of asset released to the market place. Output can also be measured through the impact of your brand-created offers in local markets.

Local activity impacts brand equity because assets that aren't being utilized by a local store owner can't influence sales. Similarly, poor-quality output – such as a direct mail offer that's amateurishly edited by a local franchisee – may have a serious negative impact on your brand equity. Three ways to determine how your assets for local marketers are translating into output are:

  • Local marketer campaign and asset utilization
  • Sales on promoted products
  • Customer adoption of loyalty programs

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5. Local Marketer Perception Metrics

For distributed brand management teams, there’s value in thinking of your local marketers as customers. Your local representatives all have influence over your brand equity metrics; their local advertising and in-store customer experience shapes awareness, preference and financial habits.

These factors influence their success and local customer experiences – a dealer who doesn't prefer your brand is less likely to have success selling your products to a customer. A franchisee who doesn't have an instinctive connection to your brand may use your marketing assets improperly.

Your local outlets are directly responsible for the way your customers experience the brand. By monitoring local marketers' sentiment, you can further understand whether brand equity is increasing or decreasing and improve the quality of your support to locals. Ways to measure local perception of your brand include:

  • Surveys
  • Focus groups
  • Software adoption rates
  • Campaign deployment rates

6. Competitive Metrics

Your competitors’ brand equity has a direct influence on how your company's brand equity trends. If competition doubles-down and launches a campaign advertising a pricing adjustment, your customer preference could dip for reasons that have nothing to do with the work you're doing – and everything to do with your competitor's brand.

Competitive metrics can reveal areas where your competition is not providing value to customers, such as missing products, poor customer experiences, or pricing. It can also reveal tactics and campaigns that have resonated with your consumer base. Metrics here include, but are not limited to:

  • Customer acquisition rate
  • Market share
  • Sales lift
  • ROI of distribution channels

Part Two: How to Build Brand Equity

Brand equity is built through every "touch" or interaction with the customer. Your advertising at the national and local level supports your brand equity, but so do your local marketers' face-to-face interactions with customers on a daily basis. By understanding that every outbound communication and in-store experience is an opportunity to add to a positive brand impression, brand managers can take control and not just measure brand equity but actually build it in the process.

1. Build Your National Brand

Distributed brand managers don't have direct control over local marketing execution, though they do have control over national-level campaigns. Using traditional, proven methodologies for building your brand on a national scale can increase your value to consumers and local affiliates.

Strategic tools for expanding your value include:
  • Improving your brand position
  • Telling your brand story
  • Improving your tools for international brand consistency
  • Using consumer and local marketer feedback to improve brand messaging

2. Improve Local Marketing Performance

Brand equity at the local level is influenced by the quality of the customer experiences and consistency. If your customers see a product in your national advertisements, go to buy it, and have a great experience, you're on the way to building lasting brand equity. Just as easily as you build equity through good execution, poor local execution will undermine all those gains.

Delivering consistently great experiences at local storefronts requires brand management teams to define expectations clearly and establish processes, often by using technology, that make it easier for two-way communications between local marketers and brand management teams to occur.

3. Support Local Innovation

How boring would it be if your brand released the exact same direct mail flier with no updates every summer? Pretty boring. Brands need to recast ideas in new and interesting ways to keep their customers excited and engaged. To achieve balance, brand managers need to understand the two primary types of brand consistency:

Repetition: The same thing over and over again.

Innovation: The same idea expressed repeatedly, in a different way.

Semantic consistency is what keeps your brand exciting, while rote consistency builds customer trust. Achieving a balance of these two factors is important to building your existing equity. For distributed enterprises, successfully balancing the two types of consistency requires supporting the right kind of innovation at the local level, making it easy for locals to comply with brand guidelines, and using a mixture of tools and strategic tactics like:

Elevate Your Distributed Brand Equity

Distributed brand equity is hard-earned and easily lost. It may take just one bad experience at their favorite store to turn a long-time, loyal customer off to your brand. Building on the equity you've already created by delivering a consistently great experience is a challenge. Doing that when you manage a network of thousands of affiliates, can feel next to impossible.

Traditionally, businesses measure brand equity through customer knowledge, preference, and financial metrics. Distributed brands can also determine brand equity through measuring output, local marketing metrics, and competitors. With a solid baseline understanding of distributed brand equity, your organization will be positioned to build equity through national efforts, improving local marketing performance, and support for local innovation.

The key to understanding how your brand is executing against your promise is to understand that your consumers aren’t the only factor to monitor. Your local marketers' perceptions are tied to action, and working to improve their equity measures will have a direct influence on your local execution and equity.

CampaignDrive is a distributed marketing platform designed with local marketing in mind. Our secure platform centralizes marketing assets across franchise and enterprise locations to give businesses a holistic view of their collateral and facilitate brand compliance across all branches and affiliates. Brand managers, designers, and local marketers can have the tools they need to stay aligned with brand guidelines as well as automate and streamline processes for faster output.

Are you looking for creative ways to enable local marketers to execute local marketing? Get The Local Marketing Playbook for new ideas, tactics, to inspire your local team.

Download The Local Marketing Playbook

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The Local Marketing Playbook

Is inconsistent branding across locations negatively impacting the customer experience and your company's bottom line?

Published by CampaignDrive August 13, 2019
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