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Definition: Brand equity

What is brand equity?

With the term brand equity, marketers describe the "value" of a brand. Brand equity doesn't refer to a brand's financial value. It is determined, instead, by consumer perception and is driven by positive (or negative) customer experience.

The benefits of positive brand equity are many: consumers are willing to pay more money for the same products; when brands extend product lines, new products are perceived just as favourably; ultimately, brand equity directly affects stock price.

Wondering what the latest trends driving brand equity might be? We've asked 1000+ branding professionals for their opinion. Take a look at our 2020 State of Branding Report.

What drives brand equity?

Brand equity develops over time and is based on the experiences customers have with a brand. Brands craft detailed strategies to drive brand equity and break them down into specific steps. Some of these are:

Creating brand awareness: introducing the brand to its target audience through ads and a social media presence.

Creating brand recognition: making the elements that represent the brand always recognizable by customers.

Improving consumer perception: using impeccable customer experience to shape the perception and opinion customers have of the brand.

Creating brand loyalty: having a base of loyal customers who regularly turn to your brand and recommend it to others.

Don't underestimate the importance of clear brand guidelines to achieve positive brand equity. Learn how to create dynamic, future-proof brand guidelines with Bynder to scale brand consistency across markets.Download our free guide.