Brand equity: What it is, why it matters, and how to measure and build it

​​Do you buy the generic painkillers or the branded ones? And why does it matter?

As consumers, our purchasing decisions come from exposure to marketing messages that ultimately lead us to believe one is better than the other.

This pulling power—built up through advertising, PR, and ‘social proof’—is what marketers refer to as brand equity.

It might sound like just another buzzword, but if you’re building a brand or promoting a new product, understanding brand equity is absolutely key. In this article, we’ll walk you through what brand equity really is, why it matters, how to measure it, and what you can do to build it.

What is brand equity?

Brand equity—or positive brand equity—is the premium value that a brand can command when it has a recognizable name over a generic product. And when we talk about brand equity, we have to talk about David Aaker. His brand equity model is still one of the most referenced frameworks out there.

Aaker breaks brand equity into five key components:

1. Brand loyalty – Will customers come back?
   
2. Brand awareness – Do people recognize or recall your brand?
   
3. Perceived quality – How good do people think your product is?
   
4. Brand associations – What values or emotions are connected to your brand?

This framework gives marketers a way to audit the strength of their brand. You don’t need to tick every box perfectly—but you do need to understand where your brand stands.

Negative brand equity can also happen. This is the case when customers are willing to spend more on a generic product than on a branded one. So it works both ways.

Worth noting: brand equity isn’t the same as brand loyalty. Brand loyalty is what keeps customers coming back. Brand equity is what makes them choose you in the first place.

Why is brand equity so important?

Whether you simply want to sell more products, at higher prices, or you’re hoping to attract investors, brand equity matters. It even plays a role in the quality of employees you’ll be able to secure for your company.

Here are three key benefits of great brand equity:

1. Increased sales

A strong brand builds trust. It’s a shortcut in a busy aisle or a crowded feed—a signal that says “you can count on us.”

74% of women prefer to buy brand-name health and beauty products, and 69% of shoppers say it’s important that washing detergent comes from a well-known brand. Our own research shows that 55.5% of consumers are willing to spend more with brands that align with their values.

So, having a clear brand promise pays off, because it directly translates to brand equity—and gets your product picked again and again.

It also makes expansion easier. Launching something new? Customers are more likely to give it a shot if they already trust your brand. Distributors are more likely to stock it. Your sales team gets a head start.

2. Higher profits

Consumers are still willing to pay more for brands they trust—especially in categories where quality, safety, or performance really matter. You see it clearly in sectors like automotive or performance wear, where people lean toward established names not just for the logo, but for the reassurance that comes with it.

At the same time, there’s a growing appetite for ultra-low-cost platforms like Temu and Shein, where the gamble is part of the appeal. In those cases, consumers knowingly trade off quality or sustainability for price. They don’t expect excellence—they expect cheap. And that expectation is exactly what those brands have built.

The contrast is telling. When brand equity is strong, it gives you pricing power. When it’s weak—or deliberately absent—price becomes your only lever, and only volume can save you. Choose wisely. 

3. More influence

When it comes to making strategic partnerships, companies are naturally keener to team up with influential allies. In turn, such collaborations result in even further enhanced brand equity for both partners – it’s a win-win!

What’s more, studies show that companies with high brand equity find it easier to recruit talent. That’s because job seekers use reputation perception as a signal about job attributes, and reputation affects the pride that individuals expect from organizational membership.

Plus, they know that working for a well-known, well-respected brand will help them when searching for their next role. Individuals will even accept lower wages to join firms with positive reputations.A brand perception survey can indicate how your company is being perceived.

There are also plenty of brand management software that can help you better manage your brand locally and globally—so that you can guarantee positive brand associations, meaning that your customers will recognize and return to your brand.

How do I measure brand equity?

Brand is, by nature, a difficult concept to measure. But there are methods. Here are three ways to get a grip on your brand’s equity.

1. Brand lift

The simplest way to quantify brand equity? A/B test your branded ads against generic ones.

For example:

• Unbranded: Book an amazing beach holiday
• Branded: Book an amazing beach holiday with TUI

If the branded version consistently gets more clicks, that tells you your brand name carries weight.

Take it a step further: assign a monetary value to the uplift. If your PPC brand lift is 15% on £10m in sales, your brand name alone could be generating £1.3m in added value.

You can even run this test on a debranded site to isolate your brand’s influence.

2. Brand value (financial)

Want to put a dollar value on your brand? Firms like Brand Finance use a royalty relief method:

• Assess brand strength
• Determine royalty range by industry
• Apply royalty rate to projected revenue

The result is a financial estimate of your brand’s worth. It’s neat, but note—it leans heavily on business performance, so it’s more of a lagging indicator than a predictive one.

3. Attest consumer research

The other methods above? Great, but they miss a crucial piece: how people actually feel about your brand.

Attest’s platform puts real consumers at the center. By running brand awareness and brand perception surveys, you can see how your brand stacks up in people’s minds.

With Attest you can track:

• Unprompted recall – Are you the first brand people think of?
• NPS (Net Promoter Score) – Would people recommend you?
• Purchase intent – Will they buy again?

Together, these scores form a total brand equity score—your brand’s relative strength in the market.

And because it’s flexible, you can tailor your research to test new markets, product launches, or messaging shifts. It’s brand equity measurement, powered by real people.

How to build brand equity

To build brand equity, you need to have a strong brand that customers value, recognize, and support.

Here are the steps you need to follow:

Step 1: Define your brand identity

The first thing you need to do to achieve brand equity is to have a strong brand identity. To must have:

• A strong brand name
• Easy-to-recognize logo and variations for its different placements and contexts
• Tagline or slogan
• Set color palette and graphic styles
• A brand voice and tone

These are the elements from which you’ll start to build brand equity, so they’re crucial.

How to build brand equity

To build brand equity you need to have a strong brand that customers value, recognize, and support.

Here are the steps you need to follow:

Step 1: Define your brand identity

The first thing you need to do to achieve brand equity is to have a strong brand identity. To must have:

• A strong brand name
• Easy-to-recognize logo and variations for its different placements and contexts
• Tagline or slogan
• Set colour palette and graphic styles
• A brand voice and tone

These are the elements from which you’ll start to build a brand equity, so they’re crucial.

Step 2: Establish your mission and values

Customers will be more loyal and willing to support a brand if they can align with its mission and values. Additionally, if they see a brand with firm values they’ll be much more able to identify with it and remember it.

Having a mission and values statement and showing them through your actions and products is the best way to show them.

Step 3: Consider brand awareness

To build brand equity you need to be out there and in people’s minds. Having a consistent brand representation and making sure it is where customers are is important.

Improving your brand awareness comes to how and where you’re advertising, what kind of brand campaigns you use, and the social presence that you manage. These three strategies will help you be where your customers are and create positive associations with your brand.

Step 4: Provide a positive customer experience

If customers can recognise your brand but only have negative experiences with it, most likely your brand equity will be negative—something you want to avoid, especially when building your brand equity.

Make sure customers are having a good experience with your brand, not only when making a purchase and using your products, but also when things go wrong make sure you’re repairing the relationship.

Step 5: Reward brand loyalty

Part of having a positive brand equity is that you’ll have repeat purchases and long-time customers. Make sure you’re rewarding brand loyalty by giving discounts and special offers to those that have stuck with the brand for a long time.

Build and measure brand equity with Attest

Taking steps to build, and measure, a strong brand equity will increase sales, customer loyalty, and prestige—and both are needed to become truly successful and remain a leader in your market.

Attest’s brand tracker gives you clear, real-time insight into brand perception and consumer behavior—so you can improve how you’re seen, and build a stronger brand for the long haul. Explore our brand tracker to start measuring your brand equity the smart way.