What is Customer-Based Brand Equity?

According to marketing author and professor Kevin Lane Keller, “The power of a brand lies in what consumers have learned (felt, seen, heard) about a brand – and this resides in the minds of the consumer.”

To consumers, brands are more than just features of the products or services they sell. Brand adds value to a product, so it’s important to understand this value, especially from a customer perspective.

Brand equity is an intangible aspect that’s created through your marketing and branding efforts. It’s the consumer’s perception of the brand, rather than the functionality of the product or service. It's the associations people have with your brand and how these work together to form a brand personality. In its most holistic form, brand equity is the entire customer experience with a brand. In this context, brand equity is generated by both brand awareness and brand image.

Keller introduced a very useful model that’s known as customer-based brand equity. Aside from using the model to understand the customer-based equity of a brand, it can also be used as a roadmap for brand building. And as you would typically approach building any structure, you start with laying the foundation: salience.