What is Brand Equity?
Brand equity is the sum of all the thoughts, feelings, and associations people hold about your brand. It's why someone might choose your product over a competitor's, even at a higher price point. It's why they'll give you the benefit of the doubt when things go wrong. And it's why they'll recommend you to others without being asked.
But I get it, branding seems like such an abstract and often ephemeral concept. At least marketing gives us tangible numbers right? Number of impressions, cost per acquisition, number of customers, profit, loss - all of these figures show us clearly what’s working and what isn’t.
So how do we measure brand?
Here’s how and why you should be doing it for your business.
Why Measuring Brand Equity is Worth Your Time
The Business Case
Strong brand equity translates directly to your bottom line. When customers value your brand, you can command higher prices without losing business to competitors. Your marketing costs naturally decrease as satisfied customers become your best advertisers through word-of-mouth. You'll find it easier to attract and retain top talent who want to be associated with a respected brand. And when challenges arise or mistakes happen, a strong brand provides resilience, helping you bounce back faster than competitors.
The Growth Case
Understanding your brand equity opens doors to strategic growth. By measuring what truly matters to your customers, you can identify natural opportunities for expansion that align with their needs and expectations. You'll make smarter decisions about where to invest your resources, knowing which aspects of your brand resonate most strongly with your audience. This insight helps you build deeper, more meaningful connections with customers, and helps turn people into loyal advocates.
A Reality Check
Ignoring brand equity measurement is like driving with your eyes closed. You can't make informed decisions about pricing, marketing investments, or customer relationship strategies. You might be pouring money into brand-building activities that aren't moving the needle, or worse, missing crucial opportunities.
Five Essential Ways to Measure Brand Equity
Let's break down brand equity measurement into five key areas that any business can track and measure:
1. Brand Awareness
Brand awareness tells you how easily people recognise and recall your brand. Start by monitoring how often your brand comes up naturally in conversations and searches. Set up Google Alerts for your brand name and track social media mentions. Pay attention to how people describe your business when recommending you to others—their language often reveals the strength of your brand awareness.
Key metrics to track:
- Unprompted brand mentions in your industry
- Social media tracking and mentions
- Search volume for your brand name
- Share of voice in your market
2. Customer Perception
Understanding how customers view your brand and capturing the emotional and rational associations people have with your business is crucial. Regular surveys can help, but pay special attention to the unsolicited feedback that comes through reviews and casual conversations.
Focus on:
- What qualities customers associate with your brand
- How they describe your business to others
- What they believe makes you different
- Their perception of your value versus price
3. Brand Loyalty
Brand loyalty manifests in customer behaviour patterns. Look at how long customers stay with you and how they behave during that relationship.
Monitor:
- Average customer relationship length
- Repeat purchase patterns
- Customer retention during price increases
- Response to competitor offers
- Forgiveness during service issues
4. Financial Performance
Your brand's financial impact shows up in various ways. Look for patterns that indicate a strong brand premium—situations where customers choose you despite having cheaper alternatives. Track how your pricing power evolves as your brand strengthens.
Key indicators include:
- Price premium sustainability
- Customer lifetime value
- Cost of customer acquisition
- Revenue per customer over time
- Market share in your category
5. Brand Advocacy
Perhaps the strongest indicator of brand equity is when customers become advocates for your business. This goes beyond simple referrals to active promotion of your brand. Watch for situations where customers defend your brand unprompted or actively promote you to others.
Measure advocacy through:
- Unsolicited testimonials and reviews
- Social media shares and endorsements
- Word-of-mouth referral rates
- Customer content creation
Real-World Examples: How Different Businesses Measure Brand Equity
Local Restaurant
- Tracks average spend per table (increased from $65 to $85 after brand refresh)
- Monitors Instagram mentions and food photo shares (up 40% year-over-year)
- Measures repeat customer frequency through booking system
- Reviews customer wait time tolerance (eg. willing to wait 30 minutes vs competitor's 15)
Professional Services Firm
- Analyses project win rate when competing against lower-priced alternatives
- Tracks referral sources and their quality
- Measures speaking engagement invitations as industry authority marker
- Monitors premium rate acceptance (able to charge 25% above market average)
E-commerce Fashion Brand
- Evaluates shopping cart abandonment rates vs. competitors
- Tracks repeat purchase frequency (increased from 2.1 to 3.4 times per year)
- Measures social proof through user-generated content
- Analyses customer service interaction sentiment
Trade Services Business
- Monitors callback rate from previous customers
- Tracks premium service package uptake
- Measures emergency call-out acceptance rate
- Analyses price sensitivity in different service areas
Practical Tools for Measuring Brand Equity
Let's move beyond theory into practical tools you can use right now:
1. The Brand Equity Tracker
Create a simple spreadsheet with these columns:
- Date
- Source (customer feedback, social media, review, etc.)
- Type (positive, negative, neutral)
- Key themes mentioned
- Action taken/needed
- Follow-up required
2. The Customer Feedback Template
A simple three-question survey to send after interactions:
- "What made you choose us over alternatives?"
- "What's one thing we do better than others in our industry?"
- "What would you miss most if we weren't around?"
3. The Competitor Comparison Tool
Track monthly:
- Your pricing vs. competitors
- Social media engagement rates
- Review ratings and themes
- Market share (if available)
- Customer retention rates
4. The Brand Value Calculator
Monitor these metrics quarterly:
- Average transaction value
- Customer lifetime value
- Referral rates
- Price premium (% above market average)
- Cost per new customer acquisition
Making it Work in the Real World
Here's how three different Australian businesses might measure their brand equity in practical ways:
The Local Café
They track:
- Regular customer visits (through their loyalty program)
- Social media mentions and tags
- Google review themes
- Word-of-mouth referrals
The Professional Services Firm
They monitor:
- Client retention rates
- Referral sources
- Price sensitivity in proposals
- LinkedIn engagement
The Online Retailer
They measure:
- Repeat purchase rates
- Cart abandonment reasons
- Customer service feedback
- Social proof (user-generated content)
Simple Steps to Start Today
- Document Your Current State
- Save positive feedback emails
- Screenshot social media mentions
- Keep track of referral sources
- Note why customers choose you over competitors
- Set Up Basic Tracking
- Use free tools like Google Forms for customer feedback
- Set up Google Alerts for your brand name
- Monitor your social media mentions
- Track repeat customer rates
- Make it a Habit
- Review your numbers monthly
- Ask for customer feedback regularly
- Keep notes on what people say about your brand
- Share insights with your team
Common Mistakes to Avoid
- Don't try to measure everything at once
- Don't compare yourself to global brands
- Don't forget to act on what you learn
- Don't overcomplicate your tracking systems
The Bottom Line
Your brand equity already exists—whether you're measuring it or not. By starting with these simple steps, you can begin to understand, track, and improve how your brand matters to the people who matter most to your business.
Next Steps
Choose one aspect of brand equity to start measuring this week. It could be as simple as creating a folder for positive customer feedback or setting up a basic customer survey. The key is to start small and build from there.
Want to dive deeper into measuring and building your brand's value? Let's talk about practical ways to make your brand matter more.
