How to Measure Brand Equity: Step-by-Step Guide

No matter what industry you're in, one thing is certain in 2024: budgets are getting tighter and you need to do more with less.

While it may sound counter-intuitive, investing in your brand is the smartest thing to do at the moment.

But to find out if your efforts are paying off, you need to see that ROI. Today, we’ll talk about measuring brand equity - what it is and how it's done.

• What is brand equity?
• Why does brand equity matter to PR
• Brand building through PR - key strategies
• 6 effective strategies for measuring brand equity
• Improving brand equity with PR - case studies
• Monitor your brand equity and make data-driven decisions

What is brand equity in simple words?

Brand equity refers to how your customers, both potential and actual, perceive your brand and what kind of associations they have once they hear your name.

As the "hard sell" era is long gone, paving the way for generating interest in ways that are not as invasive. This is where brand equity comes into play.

Now is the right time to invest in reputation, as 30% of B2B buyers consider brand reputation to be a crucial factor when purchasing B2B services.

💡 Businesses with great brand equity can command higher prices, better customer loyalty, and stand out in the market.

For example, if a brand has a positive reputation and equity, customers will be more inclined to pay extra for it. Customers would rather purchase a luxury Audi or BMW compared to a newcomer on the market, even if they offer better features and pricing.

Brand equity vs. brand value

When measuring brand equity, the term "brand value" is often mentioned and used interchangeably. However, there are some differences to keep in mind.

Four components of brand equity

There are four key components of brand equity to keep in mind:

1️⃣ Brand awareness

How aware customers are of your brand and how easily they can recall it. Great brand awareness means that your brand is easy to recognize and remember, making it effortless to get more sales in your target market.

2️⃣ Brand association

The mental and emotional connection that a consumer has when they hear about your brand. This helps you stand out to your target customers compared to your competitors, builds trust and credibility, and enhances your perceived value.

3️⃣ Brand perceived quality

How consumers perceive your overall quality and position in the market, especially compared to alternative choices. Well perceived value and quality help you stand out against competitors and give potential customers reasons to purchase.

4️⃣ Brand loyalty

How attached customers are to your business, products or services, and how likely they are to shop with you again. With high brand loyalty comes decreased marketing costs and a strong word-of-mouth reputation, and it's easier to win new customers through awareness.

Why does brand equity matter to PR?

Building high brand equity is one of the key tasks of great public relations.

PR is the tool that shapes the public perception of your brand, helps you manage crises, makes your brand more credible, and helps it stand out against the competition, among many other things.

In short, brand equity is crucial in the context of PR, and PR plays a pivotal role in improving brand equity metrics.

So high brand equity is good for PR, we get it. But how can you influence it as a PR professional?

Brand building through PR - key strategies

You can use a variety of methods for brand equity building, such as:

Crisis management

PR protects a brand's reputation when times get tough. When marketing campaigns go south or the brand receives negative publicity, PR preserves brand equity.

Social listening helps with crisis management as you can get notified about brand mentions in real-time.

It's a part of media monitoring which you can automate, instead of doing it manually. With Prowly you can track mentions 24/7 without the irrelevant noise.

Brand image building

PR shapes a positive brand image through various methods and tactics, such as media relations, partnerships with brands and influencers, community building and engagement, and more.

All to weave a positive, compelling narrative around a brand.

Building trust and credibility

Brand power comes from consumer perception and that is built on trust and authenticity. PR helps show brands as transparent, authentic, and ethical, winning trust and credibility with both stakeholders and customers. This is why measuring PR success is a necessity.

👉🏼 Differentiation: PR improves a company's success and sales performance by highlighting the key attributes that make that brand different from the competition. Whether it's in its features, price differences, or something else, PR helps brands stand out.

👉🏼 Strategic partnerships: public relations professionals collaborate with other organizations and brands, helping create strong brand equity through increased visibility. By partnering with influencers, content creators, journalists, and others, PR pros help build brand equity by improving reach.

And building strong brand relationships is an integral part of media relations.

How is brand equity measured? 6 effective strategies

If you want to measure your brand strength and equity from positive brand associations and more, you should know that there are multiple ways to measure success. Here are some of the most common ways to measure brand equity.

#1 Share of Voice

Share of voice, or SOV, is the percentage of all the brand mentions your brand has in your market.

For example, if you're selling phones, your SOV would be your percentage of mentions compared to Apple, Samsung, Xiaomi, Huawei, and others.

An important distinction is that SOV includes the organic mentions of your brand in media such as blogs, social media platforms, review websites, and others.

To measure brand equity, you need to measure your share of voice, as it's a pretty good indicator of how your brand ranks in the competitive landscape.

Looking for the best way to measure your Share of Voice? Read this article on how to calculate your SoV.

Compare online and offline Share of Voice

Your brand relevance and equity don't exist only in the online world. Offline, people talk about your brand in various places and it's important to consider both types of SOV.

Some of the ways you can measure your share of voice offline includes media impressions, mention frequency, media mix, market surveys, interviews, partnerships and sponsorships, and others.

Since offline publications are getting less and less popular, it might be quite easy to do it manually - unless you're an industry giant that gets tons on coverage, of course!

Compare the results of your online and offline campaigns to determine brand equity accurately and analyze what brings the most impact.

#2 Brand loyalty and engagement

💡 Brand loyalty and brand engagement cannot be measured through a single metric.

There are multiple KPIs all meant for measuring them, such as:

• Customer retention rate (the number of customers retained over a specific period)
• NPS score (Net Promoter Score, calculated on a scale from 0-10)
• Customer satisfaction score (CSAT, also calculated on a scale of 0-10)
• Repeat purchase rate (the percentage of customers who return to shop again)
• Average order value (the cash value of a typical order your customers make)

Loyal customers are a great brand equity measurement because they contribute positively to your overall brand equity.

And if you want to find out how loyal your customers are, social listening can prove an accurate method, too.

#3 Market share and price premium

Market share is how much of your existing market belongs to you and your products.

For example, Apple's market share in the final quarter of 2023 was 24.7%. This means they sold about a quarter of all new phones sold in this period.

Price premium is a KPI that shows how much higher a price customers are willing to pay for a particular brand compared to other entries on the market.

The higher the price premium, the higher the perceived value.

#4 Brand associations and perceived quality

Brand associations are mental connections that customers make between a brand and their experiences, values, emotions, and attributes.

👉🏼 You can measure brand associations through surveys and questionnaires, running focus groups, performing social media monitoring, and hosting brand equity studies, among other things.

On the other hand, perceived quality is the subjective perception of the quality of your products and services by your customers.

👉🏼 Measuring perceived quality can be done through surveys, attribute analysis, brand reputation surveys, customer reviews, and ratings.

#5 Brand awareness, recall and perception: sentiment analysis and surveys

Brand awareness is just that - how aware your potential customers are about the space you take up in your target market.
Brand recall is the ability of those potential or existing customers to remember your brand without assistance or prompting.

👉🏼 You can measure both through surveys and studies to access metrics such as unaided brand awareness, brand recall, and recognition.

• Surveys can help you tap into these metrics by showing you product quality, relevance, and differentiation metrics.
• Sentiment analysis helps you analyze where and how people talk about your brand online. And you can now quickly analyze thousands of brand mentions for their sentiment with just a few clicks.

#5 Customer Lifetime Value (CLV)

Customer lifetime value (CLV) is the amount a customer spends over their total period of being your customer.

Higher customer lifetime value indicates a strong brand equity through brand loyalty and affinity.

#6 Brand Equity Index

Brand equity index is a proprietary metric that some brands develop to measure brand equity.

The index typically combines multiple metrics and dimensions into one score that gives the business a bird's eye view of the health of their brand.

Improving brand equity with PR - case studies

Public relations can be a lifesaver when it comes to improving brand positioning, brand consistency, and overall brand equity metrics.

Here are some examples of brands that pulled it off well, as well as cases of why you should regularly do PR reporting for your campaigns.

🙁 Negative brand equity turned positive: Ryanair

Ryanair is a prime example of a company that turned its brand perception upside down. They are typically known as cheap, uncomfortable, and as a company that treats passengers poorly. Instead of trying to defend themselves, they decided to own it and build their communications based on this identity.

Nowadays, they are open and transparent about what they can (and cannot) offer, using humor and sarcasm to create strong equity for their brand. And it's working.

Lessons learned: build a communication plan and monitor conversations

The secret behind Ryanair's success is not just transparency. They embraced who they are after listening in on online conversations about them. They even share these posts and other (potential) customers engage with these reports.

The PR lesson you can get from this is: monitor the web for your brand mentions, prepare a communications plan, and stick to it. Make it controversial, but not so controversial to where it's off-putting.

Also, make sure to have a crisis plan in place to act immediately if things go south. If a crisis does arise, you'll be prepared thanks to social listening.

😊 Positive brand equity example: Coca Cola

The battle of Coke vs. Pepsi is one of the most interesting brand standoffs in the past century. Both brands have amazingly successful campaigns, as well as some ideas that never worked out, such as Pepsi’s commercial with Kendall Jenner, or Coke's Real Magic ad from 2022.

The two products have very similar ingredients and yet, Coca-Cola is now the 47th most valuable global brand on Brand Finance’s Global 500. Meanwhile, Pepsi places down at 95.

There are many reasons why Coca-Cola is more successful. Much of it boils down to customer engagement - they engage with their followers across many channels. Social media, loyalty programs, online and in-person events. They nailed down their consumer preferences - their customers love the brand interactions they have with Coke.

One such example is the wildly successful #shareacoke campaign, which spread like wildfire across social media and internationally.

Lessons learned: increase customer advocacy & build partnerships

Consumers gravitate towards brands that listen to them and interact with them. To succeed like Coke, create interactive campaigns that require your customers to get in touch with you, offline and online.

Social listening is the key piece to this puzzle, as it allows you to run campaigns and capture what people say about you, but more importantly, track how they respond.

These campaigns also allow you to partner up with other brands, media outlets, journalists, content creators, and influencers.

What connects the success of Ryanair and Coca-Cola is - monitoring what's being said about the brand, drawing conclusions and responding strategically.

You can use Prowly to monitor what's being said about your client's brand, measure their Share of Voice and other key PR metrics.

Monitor your brand equity and make data-driven decisions

In an age where advertising is getting increasingly expensive, investing in your brand is a smarter, long-term alternative to paid advertisement efforts. A brand's equity is a powerful tool that can help win more customers at a lower price point.

To start measuring your brand equity today, taking a look at your PR metrics is an excellent starting point. With Prowly, you can measure just about any aspect of your PR and marketing strategies in minutes.