Brands do not exist without consumers and consumers do not exist without brands – a bold statement perhaps, but very true and relevant.   From this, an understanding of Brand Equity vs Customer Equity is imperative!

What is the Difference Between Brand Equity and Customer Equity?

Brand Equity can be defined as; “The monetary value and strength of the brand – its’ total worth.”

Customer Equity is defined as; “The lifetime value of its customers.”

Brand Equity and Customer Equity have two things in common

  • Both emphasise the significance of customer loyalty to the brand
  • Both emphasise that value is created by having as many customers as possible paying as high price as possible for the product/brand.

How do Brand Equity and Customer Equity differ conceptually?

  • While customer equity puts a lot of emphasis on financial value received from the customers; brand equity attempts to place more emphasis on the strategic issues in managing those brands.
  • Customer Equity is a less narrow alternative. It can overlook a brands’ optional value, and their capacity effect on revenues and cost beyond the present marketing environment.
  • Just as customer equity can persist without brand equity, brand equity may also exist without customer equity. For instance I may have positive attitude towards brands – Nandos and KFC, but I may only purchase from Nandos brand consistently.

 Written by Jainita Khatri. She is the founder of Prana Business Consulting.  She has 15 years of practical experience in marketing for blue chip organisations and has consulted extensively with entrepreneurial and medium sized businesses.  Jainta’s passion lies in digital marketing – helping businesses to build their brands and businesses.  Jainita is a speaker at conferences and guest lectures Monash University and UJ on vaiorus marketing related topics.