Brand equity is a term most of us are familiar with and probably even use from time to time. But, as with many business concepts we may have a less than perfect understanding of what the term really means. This limits our ability to effectively develop marketing plans to create the kind of brand we want to project. So, exactly what is brand equity? What does it mean to create an effective brand? Why does any of this matter to an individual agent?
Brand Equity – What is it?
Brand equity is the value of the brand in the marketplace.1 Simply put, a high equity brand has high value in the marketplace. However, what this means exactly is often not fully or clearly understood. High brand value, a brand with high equity, means that the brand has the ability to create some sort of positive differential response in the marketplace. This can mean that your brand is easily recognizable when encountered in advertising or seen on a yard sign. It can mean that your brand is one of the first ones recalled when a relevant prompt is used – “who would I call to discuss listing my house?” It could mean that individuals would be willing to pay a premium price for your brand’s offering. In the case of a real estate transaction, individuals would pay a standard commission and feel as if they received a valuable high-quality service from a well-known and trusted brand. It could mean that when someone asks for a referral, your brand is the first one that is recommended to others. All of these are positive responses to the brand – a readily recognizable brand, a brand that is recalled quickly and easily when needed, one that individuals are willing to pay a premium price to acquire, and a brand that is recommended to others. These are all characteristics of a high equity brand.
