April 2, 2025 • 12 min read

How to Build Brand Equity (and Why It Matters)

Brand Strategy

At Infinity, we believe that stronger brands perform better — and you build a stronger brand by earning brand equity.

What’s the definition of brand equity? More than mere reputation, brand equity in marketing is an intangible yet essential resource that determines the respect, trust, and goodwill your company commands in its marketplace. Without it, growing your audience or achieving your brand’s full potential is difficult. But when you have brand equity, you’ll unlock new opportunities and raise business performance across the funnel.

Today, we’ll discuss what brand equity means, why it matters, and how you can start building it for your business. Start a conversation with our brand strategy agency if you’d like to learn more from the experts at Infinity.

What is the importance of brand equity?

Brand equity is the measurable value a brand holds in the minds of its customers and the overall marketplace. The basic components of brand equity include the accumulated trust, recognition, and collective customer preference that makes people more willing to choose a particular brand over its competitors.

Think of brand equity as “spendable” trust — something a company earns over time through consistent quality, excellent service, and positive word-of-mouth. The more of it you “bank,” the greater your options are and the more resilient your brand is to damage (whether that’s a company mistake or broader economic developments).

Brand equity vs. brand value: how do they differ?

Though they’re closely related, brand equity and brand value are distinct concepts to keep in mind.

If brand equity is the trust or importance that customers feel toward a brand, brand value is the actual financial value of that same business. The largest difference between the two is tangibility; brand value can be distilled into a hard number, whereas brand equity is a little tougher to pin down.

Some of the most well-known, popular, and successful brands have both equity and value in spades. Companies like Starbucks, Amazon, Tylenol, Toyota, and Microsoft have built both brand equity and value over time and built so much that they can feel like closer concepts than not.

You can see the difference between brand equity vs. brand value as clear as day when you look at performance. Take Apple and Google, two of the world’s biggest tech brands.

Google sold 27.6 million Pixel smartphones between 2016 and 2022. Apple sold over 235 million iPhones in the same period — why? Both companies are valued (measured in terms of stocks, assets, and profits) in the hundreds of millions of dollars, and it’s unlikely that the average iPhone is objectively nearly 10 times better than the average Pixel phone.

The answer: brand equity. Customers implicitly (and sometimes explicitly) value Apple products more than Google products. That’s a power that you can only gain through building, refining, and maintaining a magnetic brand.

How equity leads to higher brand performance

The benefits of brand equity extend beyond garnering a positive customer perception. In fact, they have direct financial and operational impacts on a business. From conversion rate to customer acquisition cost, brand equity drives success at every level of the funnel.

A few examples of brand equity benefits are below:

High brand equity empowers companies to charge higher premiums for their goods or services. Generally, customers are often willing to pay more for brands they trust because they believe in the value those brands bring to their lives.
Brand equity also makes it easier to build and maintain customer loyalty, even if mistakes occur. Customers are usually more forgiving of brands they’ve built a rapport with, or that have a strong reputation, and equity can have a major effect on your brand awareness efforts with new audiences.
Furthermore, brand equity enables companies to expand into new markets, form strategic partnerships, and negotiate certain deals more easily.

The bottom line? Brand equity leads to measurable advantages for your business.

Components of brand equity

To better understand this concept, let’s identify a few key sources of brand equity. These are:

Brand awareness: Brand awareness is how well-known your brand is to the average consumer (in your target audience, not necessarily the general public!).
Brand associations: Your brand associations are the relationships your audience draws between your brand and other items, brands, concepts, and so on. For example, Apple is generally associated with innovation and creativity, while Ford is associated with classic American car-making.
Brand perception: Brand perception or perceived quality is what customers feel about the products, services, or solutions you offer. The higher your brand perception, the better the average consumer feels about what you bring to the table.
Brand loyalty: Loyalty is the commitment or inherent trust that customers have in your brand. It takes time to build, but it’s highly worthwhile because it helps you retain and grow your audience.
Proprietary assets: Your brand’s proprietary assets are any patents, trademarks, or owned properties that are materially important to your business and its success. They can include packaging, specific products or solutions, and even your brand logo. Whatever they are, your proprietary assets are intrinsically connected to your brand.

Building positive brand equity through reputation and experience

Brand equity matters — and it’s something that you can cultivate over time. You can build it through what we call the “reputation + experience cycle.”

Here’s how it works:

People have good experiences with your brand.
They share those experiences, strengthening your brand’s reputation.
That reputation then attracts more customers (think of it like a “magnet” growing stronger — we’ll explain more below).
Those new customers then have more positive experiences, and the cycle repeats.

The result is a positive feedback loop that gets stronger with time. In a critical sense, brand equity builds upon itself and becomes easier to generate once you take some initial steps to get the ball rolling.

Does your brand have equity?

One of the best ways to think about your brand is that it’s magnetic.

In a nutshell, a strong brand acts like a marketplace magnet, producing a naturally attractive force. The stronger your brand is, the more it draws customers who align with your values, mission, and offerings. At the same time, a well-defined brand repels customers who won’t be a good fit (just like a magnetic charge repels similar charges).

This natural attraction and repulsion are what makes branding so powerful — it helps businesses find and retain their ideal audience without wasting effort.

Of course, building a strong brand magnet starts with a strong foundation, and that requires:

Defining what your brand is about
Understanding what your brand stands for
Knowing what it aims to accomplish

Finding your brand’s guiding light

Brand building, and the equity you create, begins with knowing what your brand is all about. That means discovering your brand’s essence or guiding light: the core principle that drives everything you do. The guiding light acts as your brand’s North Star, helping you keep your business on track as it grows and evolves.

Without a clear guiding light, it’s easier than you think to drive your brand in an unplanned direction — or for your brand to become diluted, inconsistent, or forgettable.

Here are a few common examples of brand essences from major brands:

Google – Don’t Be Evil. (This was retired in 2018.)
Nike – Authentic Athletic Performance.
AirBnB – Belong Anywhere.

Nuts and bolts: identifying your brand essence

Finding your brand’s guiding light can be easier said than done!

In fact, it’s common for businesses to struggle with this if they have several competing ideas. For instance, if you run a software-as-a-service company, is your guiding light:

Delivering great solutions to clients?
Pushing the boundaries of what’s possible in your niche?
A mix of both?
Something else entirely?

The answer could be any of those — and your brand’s answer can be similarly tough to nail down.

In our experience, the key to identifying your brand essence is to:

Reflect on what differentiates your brand from competitors.
Consider the impact you want to have (even if you haven’t achieved it yet) on your customers and industry.
Look inward and examine your culture, including what it is and what it might be.

After you identify and hone the most important idea to your brand, all other ideas and goals must be subservient to it.

How to create brand equity

Once you know what your brand is, it’s time to put that knowledge into action. Whether you’re starting from scratch or looking to evolve your brand in a strong new direction, here’s how we recommend generating brand equity for your business.

Communicate that idea through content

You’ve got your guiding light and are ready to start building brand equity. The best way to do that? There are several, including communicating your core idea — your North Star — in all of your business’s content.

Blog posts, videos, digital ads, social media posts — all of it needs to accurately reflect your brand’s identity and purpose. In media marketing, being authentic (and even a little vulnerable) in this way takes courage, but it’s key to creating a magnetic charge that inexorably draws the best audience to your company.

Post content regularly to build brand equity

Earning brand equity isn’t just about what you say; it’s also about how frequently and consistently you say it. The more people see your brand reflected in your content marketing efforts, the more real the brand becomes, and the more people believe in what your brand offers or says it’s about.

With that in mind, prioritize making informative, entertaining, or otherwise valuable content for your audience as often as you can. The more you create, the more you put your brand out there, and the more chances you have to build and bank equity.

Getting everyone at your business on the same page can be tricky, which is why a brand book is a valuable resource to create. A thorough brand book should:

Have complete explanations of your brand’s voice, values, and visual identity
Include examples for writers, designers, and other content developers
Lay out, in clear terms, what your business is about so everyone can get on board

Live your brand values

Your brand’s guiding light is one-half of the formula that leads to its equity. Think of your guiding light and the mission statement or values you gain from it as a promise. It’s what you intend to do.

The other half of the formula is follow-through. Delivering on the promises your brand makes is what ultimately creates great experiences and earns you a reputation worth sharing.

Every product, service, and customer interaction should embody your brand values. If customers experience inconsistencies between what your brand says and what it delivers, trust erodes — and with it, brand equity.

There are many impactful ways to live your brand values, including:

In your interactions with clients, customers, or prospects
In the design and value of your offerings
In the effort you make to resolve customer difficulties
In how you respond to complaints or comments
In how you partner with other companies
In how your brand treats its staff, who can become your greatest advocates if inspired

Build your culture to reflect the guiding light

Your brand is an internal reality as much as it’s an external image or experience. Your company’s culture can contribute to or reinforce brand equity by ensuring employees believe in and uphold the brand’s values.

That’s because your employees are brand ambassadors. If they don’t believe in your brand’s mission, you’ll have a hard time convincing your customers of the same promise.

Therefore, your company’s internal culture should reflect the same principles you promote externally. Training, internal communications, and leadership behavior should align with the guiding light to create a unified, authentic brand experience.

Measuring and monitoring brand equity — putting it all together

The more you prioritize brand equity, the more you’ll need to monitor it to grasp the health of your brand as it grows and evolves. Monitoring brand equity can involve a few different methods, including:

Tracking brand awareness. The more people know about your brand, the more brand equity you’ll be able to create through positive experiences and interactions. You can often measure brand awareness through tools like social media mentions and reviews, customer surveys, and your website’s search volume.
Measuring brand relevance via your business’s Net Promoter Score, traditional surveys, and email newsletter responses or open rates. Brand relevance can indicate how valuable your brand is to its target audience.
Monitoring brand power, or how strong your brand’s equity is in the minds of its consumers. Surveys, alongside social media activity and mentions, are potent means of tracking your brand’s power as it grows.

It’s a good idea to continually monitor brand equity, both as you begin your efforts to build more of it and as you start to achieve your benchmarks. Keeping the pulse of your brand’s equity is key to knowing when to adjust your tactics or shift your business trajectory, especially in dynamic markets.

Earn brand equity — see better business outcomes

Building brand equity is a long-term process that requires clarity, consistency, and commitment. But it’s an investment worth making for the performance it drives and the loyalty it earns from your audience.

By defining your brand’s guiding light, communicating it effectively, living your brand values, and fostering an internal culture that aligns with your mission, you can develop brand equity that translates into a lasting reputation, greater customer trust, and overall business success.

Let’s discuss how to achieve that together. Contact us at Infinity to learn more about partnering with our marketing strategy agency and consulting services.