Brand equity is like a magnetic force that effortlessly pulls you towards it in when you find yourself in rough seas that are full of options. Even when you’re not looking for anything in particular, you’ll gravitate towards a brand likes it’s an old friend who is ready to save you from bad decisions.

Quite simply, brand equity refers to the intangible value and influence that a brand possesses in the minds of consumers.

It is not to be confused with brand values, which are the principles and beliefs that a brand stands for. Brand equity is determined by the perception and worth that people attribute to a brand.

Research suggests that when customers have a positive perception of a brand and value it highly, they are more likely to be loyal and continue purchasing from that brand instead of its competitors. This loyalty and preference result from positive experiences and interactions that the brand creates for its customers – almost thinking of it like a person.

From a marketing perspective, brand equity represents the social value of a well-known brand name. Brands that have established strong equity can generate more revenue based on brand recognition alone. Consumers tend to perceive products from well-known brands as better than those from lesser-known brands.

Researchers have approached the study of brand equity from two perspectives: cognitive psychology and information economics. According to cognitive psychology, brand equity is rooted in consumers' awareness of a brand's features and associations, which shape their perception of its attributes.

On the other hand, information economics suggests that a strong brand serves as a credible signal of product quality, especially for consumers with limited information. This signalling effect allows brands to command price premiums as a return on their branding investments.

Ultimately, investing money in the quality of your pictures, writing, design, website, and all your brand touchpoints pays off through loyal customers.

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