I finally came up with a definition for brand equity that I am happy to share:
“Brand equity is the value of a brand. A popular brand enables a business to sell more products at a higher profit margin; that ability is valuable. Brand equity is the dollar value a company would pay to purchase a brand or sell their brand for.“
The understanding that the brand has a definable value unites all the people in an organization on one mission: increase the value of the brand.
How do you do that? You set a brand promise with your marketing and communications and then you deliver a product or service that meets the expectations you set.
When McDonald’s tantalizes us with a Big Mac (assuming you are an omnivore, like me!) they are not only promoting, they are promising. If I go in and the hamburger is as warm, tasty, and timely as the ad promised, then I am going to be more inclined to engage with McDonald’s in the future. That inclination is worth money, and if I and billions of others are more likely to buy, then that ads up to McDonald’s brand equity of $45 billion.
Both marketing and fulfillment are both keys to building a brand and it’s equity.