There are few things more important to a brand than the equity they’ve built with consumers. A well-established presence in the marketplace gives brands some leeway when it comes to premium pricing or product tweaks, and it helps them protect against emerging competitors looking to steal market share.
Understanding the importance of brand equity in marketing also helps brands establish a solid customer base, proving important during a turbulent few years as inflation has risen and shopping behaviors have shifted. Here’s everything you need to learn how to measure brand equity.
Key highlights:
- There isn’t a universally accepted brand equity equation because of its subjective nature. Companies can still measure their impact based on brand equity index.
- You can use seven metrics to measure your brand equity: brand awareness, customer sentiment, net promoter score, market share, price elasticity, customer retention rate, and media coverage.
- The metrics you track will depend on your industry.
- Brands can use marketing mix modeling tools like Keen to improve their brand equity by understanding demands, better planning, and scenario-based analysis.
How do you measure brand equity?
There isn’t a single universal brand equity measurement formula because it’s a combination of qualitative and quantitative factors. Measuring brand equity comes down to four key factors:
- Brand awareness: Do customers recognize and remember your brand?
- Perceived quality: Do they see your products as high quality compared to competitors?
- Brand associations: What emotions, values, and attributes do people connect with your brand?
- Brand loyalty: Are they coming back, or jumping ship to competitors?
Based on the four factors, you can use the following brand equity index equation:
Brand Equity Index = (Brand Awareness + Perceived Quality + Brand Loyalty) / 3
You can also include “market share” as a measurement value. If you do, divide the sum by 4 instead of 3.
7 metrics to track your brand equity
Without brand equity tracking, you’re making decisions in the dark. Brand equity metrics give you the data to understand if you’re thriving, struggling, or just coasting. Here are seven brand equity metrics—and more importantly, how to use them to strengthen your brand.
1. Brand awareness and recall
Brand awareness measures how familiar customers are with your brand, while recall tracks if they can think of it unprompted. The stronger your awareness, the easier it is to convert customers. It answers the question: “Are you the first thing your customers think of?”
- How to measure: Surveys, search volume trends, and social media mentions.
- What to do if low: Invest in high-impact marketing, PR, top-of-the-funnel advertising, and brand partnerships.
2. Customer sentiment
Customer sentiment tracks how people feel about your brand—positive, neutral, or negative—based on online conversations, reviews, and social media.
- How to measure: Social listening, reviews, sentiment analysis tools.
- What to do if negative: Address complaints, improve customer experience, refine messaging.
3. Net promoter score (NPS)
NPS measures customer loyalty by asking how likely people are to recommend your brand to others. Low NPS shows a high-risk churn.
- How to measure: Direct customer surveys. Ask customers how likely they are to recommend you on a scale of 0-10.
- What to do if low: Improve customer service, resolve pain points, and build community engagement.
4. Market share
Market share is your brand’s percentage of total sales within your industry. The bigger your market share, the stronger your brand’s dominance.
- How to measure: Sales data, industry reports, competitor analysis.
- What to do if declining: Differentiate with unique offerings, refine brand positioning, and expand distribution channels.
5. Price elasticity
Price elasticity shows how sensitive your customers are to price changes—positive brand equity will help you increase prices without losing demand.
- How to measure: Track customer behavior and sales after price increases.
- What to do if low: Strengthen perceived value through branding and customer experience.
6. Customer retention rate
Customer retention rate is the percentage of customers who continue to do business with your brand over a specific period. A high retention rate signals strong brand loyalty, while a low rate means customers aren’t sticking around.
The churn rate is the opposite—it tracks how many customers leave.
- How to measure: Repeat purchase rates and churn rate.
- What to do if retention is low: Implement loyalty programs, improve product quality, and offer personalized experiences.
7. Brand mentions and media coverage
Organic brand mentions show how often your brand is mentioned in media, social media, and online discussions.
- How to measure: PR tracking, social media mentions, backlink analysis.
- What to do if low: Engage in influencer partnerships, PR campaigns, and brand storytelling.
Mistake to avoid: Don’t assume high social media engagement means strong brand equity. Without loyalty and perceived quality, engagement alone won’t sustain long-term growth.
Brand equity metrics vary by industry
Different industries emphasize different metrics:
- Luxury brands focus on perceived quality and exclusivity over price elasticity.
- Tech brands rely on innovation and emotional brand associations.
- CPG brands prioritize recall and repeat purchases.
- B2B brands track thought leadership and trust over mass awareness.
How brands of all sizes build a brand
As challenger brands look to establish themselves against long-term brands or traditional brands look to maintain their existing equity, it’s important that they invest in a sound omnichannel marketing plan so that their brand stays top of mind among consumers. The marketing strategy can include:
- Consistency across channels: Following a unified marketing strategy, your brand voice, visuals, and messaging should feel the same whether a customer sees your ad, visits your website, or interacts on social media.
- Delivery of high-quality branded products and services: No amount of marketing can fix a bad product. So, fix any recurring quality issues to build trust and repeat business.
- Clear marketing messages: Facilitate a positive brand reputation and highlight the uniqueness of your brand’s offerings. What makes you different? Why should customers choose you?
- Building an emotional connection with the target market: People don’t just buy products—they buy into brands that align with their values.
- Implementing a loyalty program: Encourage repeat purchases by rewarding your customers. It’s harder for a customer to switch brands when they are invested in one.
These tactics help a brand stand out from its competitors, foster customer satisfaction, and allow it to be seen as a singular product in the market. For instance, Band-Aid has long been seen as the singular product among bandages thanks to its product look and ubiquity in stores across the country.
Keep learning: How to develop a successful marketing mix strategy
Build and measure brand equity with marketing mix models
Another way for businesses to perfect their brand equity equation is to utilize marketing mix modeling tools to help optimize their marketing spend.
For instance, if a company has to raise prices on a product due to market trends or to offset the cost of parts needed to build a product, they can adjust their marketing budget allocation to ease customers’ minds and keep them within their ecosystem. Similarly, if their product is more of a seasonal item, they can slightly pull back on spending during other months of the year so that they can maximize their seasonal marketing spend when that product is back in trend.
AI-powered MMM platforms like Keen use advanced machine learning to incorporate timing into the planning process, making it easier for marketers to decide when to invest in marketing to boost brand equity.
Take a tour of the Keen Platform to learn more.
