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What Is Customer-Based Brand Equity?

Mal Baxter
Mal Baxter

Customer-based brand equity (CBBE) is a way of assessing the value of a brand in customers' minds. Branding can increase profitability in large and small-scale businesses by filling in gaps in customers' knowledge and by offering assurances. The CBBE model centers that value in the minds of customers. It compels businesses to define their brands according to a defined hierarchy of qualitative, or common-sense, customer impressions. These impressions are often laid out in pyramid-shaped levels; they consist of salience, performance, imagery, meaning, judgments, feelings, and resonance.

Equity can be considered the sum total of values associated with a brand. These might include awareness, loyalty, and recognition. The greater the equity, the more likely customers will trust and choose the company's product or service. Additionally, equity capitalizes on normal psychological tendencies, such as the sometimes longer memory about negative experiences or the cognitive laziness that creates loyalty through a customer's unwillingness to choose unfamiliar products over familiar brand products.

Businesswoman talking on a mobile phone
Businesswoman talking on a mobile phone

Salience represents the bottom of the customer-based brand equity pyramid. This refers to what customers associate with a particular brand. It describes the very basics of what customers think about when they hear the name and how frequently they might think of it. Essentially, brand salience represents the depth and breadth of brand awareness.

Meaning characterizes the next level of the pyramid, which contains cells for performance and imagery. Performance categorizes brand awareness traits, and the types of products associated with the brand. Company reputation for service and reliability also factor in.

Imagery refers to the company image; it relates to emotional marketing, which has been proven more persuasive than factual approaches. The customer-based brand equity model relies on the description of a company's image and other intangible impressions from the user experience. These might include user profiles, experiences, and how a customer relates to the company or products in general.

Judgments and feelings fall on the next step up of the customer-based brand equity model. Generally, these aspects look at what a customer thinks and how a customer feels about a brand. Such traits can be described by factors like personal opinions and impressions about how good or reliable a brand may be. It also addresses customer emotions associated with a brand.

At the capstone, resonance describes the resulting customer loyalty and engagement with the brand. It describes whether a brand has a marked presence in the customers' minds or is just an indistinct blip on their radar screens. Resonance examines the relationship between a business and its customers and assumes a functional, ongoing interaction. The efforts of the customer-based brand equity model can create an intuitive, easily communicated and recognizable study of customer impressions. This can provide great insight and marketing value to help steer a business in a direction its paying customers may better respond to — a more connected customer experience that can show up on the bottom line.

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As customers become more and more savvy, it may be increasingly difficult to interact with them in a meaningful way.

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