Knowledge Sharing

How to build brand equity for ecommerce business

Jason Dang

Customer Success Manager

Brand equity is a marketing term that describes a brand’s value. That value is determined by consumer perception of and experiences with the brand

Table of contents

    Table of contents

      1. Brand Equity Definition

      Brand equity is a marketing term that describes a brand’s value. That value is determined by consumer perception of and experiences with the brand.

      Companies can create brand equity for their products by making them memorable, easily recognizable, and superior in quality and reliability. If people think highly of a brand, it has positive brand equity. When a brand consistently under-delivers and disappoints to the point where people recommend that others avoid it, it has negative brand equity.

      Brand equity has three basic components: consumer perception, negative or positive effects, and the resulting value

      1.1. Brand perception

      Brand perception is what customers believe a product or service represents, not what the company owning the brand says it does. In effect, the consumer owns brand perception, not the company

      1.2. Positive or negative effects

      When consumers react positively to a brand, the company’s reputation, products and bottom line will benefit, whereas a negative consumer reaction will have the opposite effect

      1.3. Value

      Positive effects return tangible and intangible value - tangibles include profit or revenue increase; intangibles are brand awareness and goodwill. Negative effects can diminish both tangibles and intangibles.

      Benefits of positive brand equity

      2.1. Bigger profits on each sale

      Companies can charge more for a product with a great deal of brand equity. When a company has positive brand equity, customers willingly pay a high price for its products, even though they could get the same thing from a competitor for less.

      2.2. Transferred to line extensions

      Products related to the brand that include the brand name - so a business can make more money from the brand Eg: apple ecosystem

      Apple, ranked by one organization as “the world’s most popular brand” in 2015, is a classic example of a brand with positive equity. The company built its positive reputation with Mac computers before extending the brand to iPhones, which deliver on the brand promise expected by Apple’s computer customers.

      How brand equity develops

      Brand equity develops and grows as a result of a customer’s experiences with the brand. The process typically involves that customer or consumer’s natural relationship with the brand that unfolds following a predictable model:

      • Awareness: The brand is introduced to its target audience - often with advertising - in a way that gets it noticed.
      • Recognition: Customers become familiar with the brand and recognize it in a store or elsewhere
      • Trial: Now that they recognize the brand and know what it is or stands for, they try it.
      • Preference: when the consumer has a good experience with the brand, it becomes the preferred choice.
      • Loyalty: After a series of good brand experiences, users not only recommend it to others, it becomes the only one they will buy and use in that category. they think so highly of it that any product associated with the brand benefits from its positive glow.

      How to build brand equity

      4.1. Build greater awareness

      You need to make sure your customers recognise your brand identity when they’re looking for goods or services, and that they perceive it in the way you intend. There are several ways you can do this:

      • Using the same logo or image to ensure your branding is consistent
      • Great customer service
      • A heart-warming story behind the brand
      • Keeping the brand in front of your market
      • Providing ongoing value
      • Keeping in touch via email or newsletters
      • Tap into social media and share – blogs, tweets, Facebook groups, Instagram photos

      Word of mouth, positive customer experience and targeted marketing all help you develop greater brand awareness.

      4.2. Communicate brand meaning and what it stands for

      There are two things to bear in mind here: how well your product meets the needs of customers and its social and psychological aspects. A company that produces a useful product, and genuinely commits to social or environmental responsibility will attract customers and employees who share those values. And who will be sufficiently connected and enthusiastic to be advocates.

      IKEA, for example, has invested in sustainability throughout its entire business operation: 50% of its wood is from sustainable sources, 100% of its cotton is Better Cotton standard and 700,000 solar panels power its stores. With feel-good eco-credentials like these, spending a Sunday afternoon assembling an IKEA flat pack seems more a pleasure than a chore when the product comes from such a reputable brand.

      4.3. Foster positive customer feelings and judgments

      When customers have a warm feeling towards your product, they’re more likely to become loyal customers and pass the word on. Judgments are made about a brand’s credibility, capability, quality, relevance to need, and superiority over the competition, so it’s important to maintain the integrity of all of these. Positive feelings can be excitement, fun, peer approval, security, trust, self-respect.

      A brand that can maintain positive judgments and feelings is onto a winner. For example, the Apple iPad: did you think you needed one before you saw one and appreciated its capabilities? Now, for many of us, it’s our computer, games console, TV, radio, alarm clock, mobile bank, messaging service… We love our iPads.

      4.4. Build a strong bond of loyalty with your customers

      This is powerful, yet the most difficult aspect of brand equity to attain and maintain. Customers have formed a psychological bond and feel attached to your brand and make repeat purchases. They may feel part of a community with fellow consumers and act as your brand ambassadors by engaging in social media chats on Twitter, Facebook and Instagram, online forums and even events. Brand equity connection that borders on customer evangelism is valuable.


      Use storytelling techniques to create a story around your brand to trigger emotional responses from your target audience. Maintain your story’s authenticity and consistency across channels

      Communicate and build relationships with customers through email marketing, social media platforms, and your customer support team.

      Measure Brand Equity

      5.1. Financial metrics:

      The C-suite will always want to see a positive balance sheet to confirm that the brand is profitable and viable. You should be able to extrapolate from the data market share, profitability, revenue, price, growth rate, cost to retain customers, cost to acquire new customers and branding investment. => using solid financial metrics data to demonstrate how important your brand is to the business and secure higher marketing budgets to continue growing.


      Look at your market share, sales revenue, the percentage of stores carrying your brand, and the percentage of people who have access to ot to better understand your brand equity.

      5.2. Strength metrics

      Strong brands are more likely to survive despite change and deliver more brand equity, so it’s essential you measure its strength. you’ll need to track awareness and knowledge of the brand, accessibility, customer loyalty and retention, licensing potential and brand “buzz”. As well as surveys that use open text questions, social media monitoring will be able to give you a picture of how your brand is know and loved (or not)


      • Awareness: brand monitoring is a great way to discover if customers recall your brand when they are in need of a specific product.
      • Value: Brand value can be measured by whether a brand provides good value for the money or whether customers buy its products over competitors for other reasons.
      • Brand personality: brand personality can help forge an emotional connection with customers.


      • Social listening tool: these help reveal what people are saying about your band and competitors across social channels. The insights will provide you with a bigger picture of your brand. However, you should note that these tools may provide inaccurate data, as they can only discover the perception of a tiny percentage of the general population
      • Brand tracking software: brand tracking can help you monitor overa;; brand health - including brand awareness, brand usage, brand consideration, brand perception, and brand associations.
      • Track brand mentions: a brand mention is a reference to a brand on the internet and describes anytime someone uses your brand name. by tracking brand mentions, you can figure out how many people are talking about your brand or sharing your posts on a specific channel.

      5.3. Consumer metrics

      Companies don’t build brands, customers do, so it’s essential that you track consumer purchasing behavior and sentiment towards your brand. Track and measure brand relevance, emotional connection, value and brand perception through surveys and social media monitoring.


      • Loyalty: brand loyalty is a core dimension of brand equity. a loyal customer base means consistent sales, a basis for a price premium, and other advantages.
      • Customer satisfaction: survey
      • Perceived quality: using surveys or focus groups, you can evaluate what customers think about your product quality.


      • Collect feedback: display a survey form on your website or run a poll on social media asking how your audience found out about your brand. the insights gathered will tell you where you’ve succeeded in your marketing efforts. review sites are also a good source to track conversations
      • GA: track website traffic, traffic source, keywords driving traffic, search volume, user demographics, => how engaged your audience is with your brand

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