The Brand Equity Formula

It has been an interesting occurrence of late that many smaller business and entrepreneurial clients and colleagues have asked me what it means to develop a brand and brand equity in today’s shifting technological and online social world.

There are many definitions of brand and brand equity and I’m sure if you were to ask 100 marketing professionals you would receive 100 different answers.  In this journal entry, I will give my take on brand and brand equity.

First, it is important to understand that times change, trends change, tools change; but, principles never change.  When looking at branding and brand development, it is important to realize that your brand is more than your logo, more than your website and more than the sum of your social media followers and fans.  I have given a great deal of thought on the brand / brand equity question since it has popped up so much in conversations over the past few months.  I feel like so many small business owners are focusing too much on the tools (which there are a plethora) and focusing too much on the process of brand development and missing the simple equation that I believe makes up a strong brand.  The equation looks like this and is based on business principles that have withstood the test of time: Authenticity + Trust + Value = Brand Equity.  I know, you are saying that is all too simple.  Well, in reality, it is.  Again, we are focusing on principles not tools, trends and tactics.  Just like building a house, it is necessary to have a strong foundation to build upon.  Small business owners typically look to the tools and tactics as their foundation, while missing out on the most important and true basis of a brand – the customer (our foundation).  We all know that nothing in a business happens without a sale and without a customer no sales take place.  The goal of branding is to engage and develop a relationship with our customer.  Can a tool such as MailChimp or InfusionSoft build such a relationship solely on its own without guidance?  No.  So how do we build the guidance of our brand using this simple formula?  Let’s take a look.


Every entrepreneur or small business owner has their own personality and view of the world.  This personality and view of the world makes each of us unique.  Remember the old saying “if everyone in the world was like me, the world would be a boring place.”  This principle holds true in the business world as well.  All too often I see entrepreneurs gauging their success off of their competition or what their competition is doing versus developing their own business voice and business personality.  When you find yourself starting to do exactly as your competition, you are not developing an authentic business voice, you are replicating a voice that most likely 200 other businesses are replicating as well.  Gary Vaynerchuk promotes the concept of betting all your chips on your best strengths and I believe this concept creates authenticity.  The authentic you is what your business needs.  Do your clients enjoy your stories?  Tell more stories.  Do you really enjoy providing value based on your knowledge; but, are afraid your competition will see giving away your knowledge as weakness (or your industry has shunned giving knowledge away)?  Create an amazing blog and get your business personality in the marketplace by sharing your knowledge.  Being true to your beliefs and values is authenticity and authenticity attracts others with the same mindset.  Your authenticity will not win over everyone; however, it will win over numerous customers that will continue to provide you with business opportunities and business growth.


Now that we established that you are going to be authentic, next comes the trust.  The two are synonymous.  You can’t be authentic without building trust.  To be true to you and your customer means you are building a trust factor.  Why is trust so important?  When developing any relationship the foundation for that relationship is most likely built on trust.  Once trust is broken, the ability to strengthen the relationship is diminished.  It seems simple.  We all know this as part of social science; but, it gets lost in translation when business comes into play.  I like to place myself into my customers’ shoes.  Instead of selling something, I work on building trust.  Granted, trust takes time to develop; but, the mutual relationship will benefit more from trust than selling.  Trust can be developed a number of ways.  Here are some of the questions I ask myself and try to view from my customers’ perspective.  What is my customer struggling with?  How can I make processes easier for my customer?  How can I help my customer with their business beyond my product or service?  How can I help my customer make money beyond what product or service I sell?  Is the customer in the position right now to utilize my product of service?  Will my product or service really help this customer?  Am I willing to forgo the sale for the benefit of my customer?  As you start to dig into these questions you start to realize that the sale is less important than ensuring the customer is taken care of and trust is built.  Very much like the principled golden rule; basically, “treat others as you want to be treated.”

One other important factor of trust is transparency.  Many businesses develop ways to hide their inner workings in fear of showing their competition how their business operates – I get it.  However, to fear someone stealing from you is a shackle that will never allow you to move forward.  I’m of a different mindset – let the world see what you are doing.  With transparency comes greater responsibility for your business to live by the authentic standards you set.  With transparency comes trust from your customers and envy from your competition.  We see it more and more in the corporate world as businesses open up their doors and let the customers see clearly how they do business and why.  As small business owners, we need to do the same.


I have had a number of colleagues challenge me on this point.  To build value, you must provide value.  Again, most small businesses are afraid to give something away in fear of showing weakness, desperation or that the customer will not need your services if they receive some advice for free.  Remember, we are looking at the long term game, not the short term sales game.  To build brand equity, we must focus on where our brand will be years from now, not just next week.  To build value means you must produce value and show your customers your expertise.  Sharing your knowledge only strengthens the bond with a potential customer that has not yet engaged with your brand.  Share tips on how to do simple tasks that your customers can do on their own, share relevant information that will help your customers’ business grow, take time to help out a non-profit with your expertise, don’t stop providing value after the sale is closed – continue on as if the customer will be there forever.  As part of our transparency we discussed above, let’s provide value by opening up our doors and letting our customers understand our knowledge, gain some benefit from our expertise and become part of our brand through the value we bring.

Brand Equity

Take these three pieces of the equation and start building a strong brand equity position.  I guarantee that if you use these guiding principles your business will be leaps and bounds above where it is today (and above your competition).  Keep in mind that this is the long game and that results do not show up tomorrow; but, instead of building a weak house of straw, we are building a strong fortified castle.


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