Contrary to what most companies believe, they don’t actually own their own brand. It’s not the sum of their logo, colors, fonts and mission statement. Instead, each brand is something that lives in the minds of its audience. And each individual has a different interpretation of the brand based on his or her experiences and what he or she has heard other people say.
For example, Milton Glazer’s famous “I ❤ NY” logo is a visual element that represents New York City. But people’s opinions of New York are entirely dependent on their experiences. Someone who was proposed to at the top of the Empire State Building during a romantic weekend visit will have a very different idea of New York than someone who couldn’t wait to escape from a tough inner-city neighborhood. The city’s government had an influence on both experiences, but it has only so much control over what people think of the city. The idea of what New York is like lives only in the heads of the individuals. And when they tell other people their story of the city, it affects their opinion too.
“Your brand is the sum of a person’s experiences and beliefs about your company, product or service.”
So when we talk about brand equity, we’re talking about the common experiences, beliefs, assets, and stories that affect the brand’s value in either a good or bad way. These experiences are driven by five factors:
- Uniqueness
Successful brands have qualities that differentiate them from the competition. The goal is to create unique elements to help them rise above commoditized markets and earn a higher share of attention. - Familiarity
Your audience knows what your brand is about. And the more familiar they are with it, the more they trust it. - Relevance
If you’re going to connect with your audience, your brand needs to relate to its needs and beliefs. The best brands connect with their audiences on multiple levels, including functionally and emotionally. - Quality
The brand needs to deliver a consistent level of quality. Regardless of the price point, people need to know what to expect when they use the product. - Popularity
Brands benefit from the enthusiasm and endorsements of passionate people. The more contagious their passion is, the more desirable your brand becomes.
Together these factors, which can be easily measured through traditional brand trackers, form a brand equity index that you can use to measure the strength of your brand. More importantly, knowing these factors helps you consciously design experiences that deliver against these qualities. And by doing that, your audience will collectively cherish the equity they own of your brand in both their minds and in their hearts.