Brand Equity – What Leaders Need To Know

The offering gets you in the game, but meaning is what wins the margin.

Picture this: You’re in a rush and grab a coffee at Starbucks for £3.50 instead of £1 at a no‑name 'commodity' coffee shop. That premium you just paid isn’t for the dark roast - it’s for the brand. Commodity = A product or service that does a job, often interchangeable and comparable with others. Judged mostly on price.

Brand = An offering, product or service that ALSO carries meaning, associations, and familiarity in the mind of the customer.

Brand Equity = The ADDED value a brand creates beyond the functional commodity product - built from awareness, trust, emotional connection, and loyalty.

Put simply:

Brand Equity = Commodity + Meaning

You see, Brand Equity is what fills the gap between a commodity offering and a known brand. That extra meaning and value the audience attaches the the brand - the cumulative power of awareness, associations, perceived quality, loyalty, and emotional meaning. And far from being 'fluffy' it's a measurable advantage and a strategic asset:

According to Salsify’s "2025 Consumer Research" report, 87% of customers will pay more for brands they trust. That trust premium is brand equity in action.

A Kantar analysis in late 2023 showed brands investing in long-term equity efforts saw 72% growth in brand value, compared to just 20% for those focused on short-term tactics. Equity builds longevity.

Going back to my Starbucks example - Academic work on the Starbucks brand has highlighted how strong brand awareness, perceived quality, and especially loyalty significantly influence buying behaviour.

Why Should Leaders Care?

Getting a strategy around your brand in order to build long term equity is a smart move. Why? Because it gives you:

• Margin Boost: Equity lets you command higher prices without losing customers.

• Resilience: Trusted brands rebound faster from disruptions.

• Marketing Efficiency: Familiar brands convert more and spend less.

• Real Financial Value: Equity metrics belong on balance sheets and inform strategic investment decisions.

What Leaders Can Do Today

Quick Brand Check

Within your team or among users, ask three simple questions:

"Name any brands you think of in your category."

"What three things come to mind when you hear [your brand]?"

"Would you pay more for [our brand]? Why or why not?"

This gives a fast read on awareness of your brand (does your brand come to mind when asked about the category), associations (what main ideas are attached to your brand), and perceived value (are you perceived as worth it!).

Benchmark Briefly

Ask these same questions about your competitors:

"What three things come to mind when you hear [your brand]?"

"Would you pay more for [our brand]? Why or why not?"

Try to understanding what meaning the audience attaches to your rivals. The ideal will be not to compete with your competitors but find white space you can dominate. But you need to know where that space might be.

Decide on ideal Associations

What do you want your brand to stand for? Comfort, innovation, reliability? Pick two, and commit.

Plan a Mini Workshop

Get your leadership or marketing team together. Review what your brand is vs. what you want it to be.

Discuss:

Long-term moves: storytelling, social presence, distinctive visuals.

Short-term taps: product tweaks, customer experience experiments, targeted messages.

Rally your team around a plan for the future where you can live your decision and show it in action (this is the tough bit - but it starts with alignment!).

All of this is not rocket science - but it’s real work. That’s how you turn a commodity into something people will pay extra for.

The Takeaway

• Brands with trust and meaning command higher prices - and survive market shifts.

• Recent data shows consumers will pay more for brands they believe in.

• A short, structured conversation with your team can spark clarity and action.

And if you need help in working on this - you know where I am!