Brand equity is a perception of value. Consumers often turn to brand-name products because they see greater value in them than off-brand items. Any business with a brand should strive to build this equity and grow the added worth and value consumers see in your branded products.

Taking active steps to build this equity should result in more sales, a higher price for your products, a bigger share of the market, and in general, a great return on investment. Understanding the importance of brand equity is just the first step. You also need to know how to do it right.

A Return on Investment

Brand equity is a process. It requires an investment of time and resources, with the hope that the return will be worthwhile. This goes for both the business owners and any investors they have. Why is all the work worth it? There are several reasons:

Premium Product 

By building brand equity, you’re developing a premium product as perceived by consumers. A premium product is of greater value to consumers. The perception of value is valuable to you, the business owner.

Premium Price 

A premium product commands a premium price. When consumers believe your offering is better, higher quality, or more aspirational, you can price it higher than the market average for that type of product. You may not even spend more making this product, but perception is everything when it comes to what people will pay.


Brand equity leads to greater recognition and ultimately a good reputation. With a reputation for excellence and strong recognition, you can spend less on traditional advertising. People will see your product, and thanks to how you’ve built the brand, know what they’re getting.

Keep Growing 

With established brand equity, it’s easier to expand your product line. Loyal customers who know what to expect with your brand will be ready to try whatever else you have to offer.

Market Impact 

A strong, premium brand image gives you a more significant impact on competitors and a greater market share. It provides leverage for partnering with other businesses and getting better deals from suppliers and vendors.

Premium Share Price  Strong equity in a brand increases stock prices, which is good for investors and, in turn, the business owners. It builds an expectation of performance that boosts share prices.

Building Equity

So brand equity is important. It takes time and resources to build it, but the return on investment has the potential to be enormous. How do you do it? There are a lot of different avenues to take. A mix of them will give you the best results and greatest return.

It all starts with awareness. If no one recognizes your brand, there is no equity. Several components come together to increase awareness:

  • A strong, simple logo used on everything.
  • A concise message and clear purpose.
  • A story for the brand that captures emotion.
  • Details that set your brand apart from the competition.
  • Social media activity and engagement.

Excellent customer service that drives a superior experience people will share and talk about

Awareness is a great place to start, but there is much more work to do. Connecting with consumers is one of the biggest overarching goals of building brand equity. Get to know your target audience, what they need, want, and purpose in buying a product like yours.

Personal connections equate with premium. Keep building on that connection by developing relationships with your customers. Start with excellent customer service and expand to things like rewards and giveaways.

Promotional programs are also great for connecting with customers and building awareness. Find out what your customers want and what they value. For instance, creative types enjoy things like koozie promotional ideas, taking a branded item, and adapting it for other uses. Simple promotional products like these don’t cost much, but they connect you directly to your audience.

Finally, listen to your customers. Especially in the age of online reviews and social media, people are happy to tell businesses and brands what they want, like, or don’t like. Listen and adapt to elevate your brand.

Brand Equity is Always Worth the Effort

If you’re struggling with the idea of putting time and money into projects like these, keep going back to the benefits. Think of some of the brands with the most equity, like Nike or Coca-Cola. 

These brands put in the effort and are now reaping brand loyalty rewards, huge market share, and returns to investors. You may not be the next Nike, but you can still build brand equity within your niche and benefit for years to come.