What makes you choose one brand over another, even when the products are nearly identical? The answer often lies in customer-based brand equity (CBBE)—how customers perceive and connect with a brand.
Think about brands like Apple or Nike. Their success isn’t just about great products; it’s about the trust, emotions, and loyalty they build with customers over time.
CBBE is all about how customers feel about a brand and the value they attach to it. Strong brand equity leads to customer loyalty, positive word-of-mouth, and even a willingness to pay a premium.
But how does a brand create and maintain this kind of equity?
Understanding the key components—brand awareness, associations, perceived quality, and loyalty—can help businesses develop stronger, lasting relationships with their customers. Let’s break it down.
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What is customer-based brand equity?
Imagine you’re at the store, choosing between Coca-Cola and a generic soda. Even if the generic one is cheaper, you might still pick Coca-Cola. Why?
That’s customer-based brand equity (CBBE) in action. It’s the value a brand holds in your mind based on your experiences, perceptions, and emotions.
CBBE is built on four key elements: brand awareness, brand associations, perceived quality, and brand loyalty.
First, awareness means you recognize and recall a brand easily—like how everyone knows McDonald’s golden arches.
Brand associations are the emotions or thoughts linked to a brand. For example, Tesla represents innovation and sustainability.
Perceived quality is how you judge a brand’s reliability—Nike’s shoes, for instance, are seen as durable and high-performance.
Finally, brand loyalty means you stick with a brand and even recommend it, just like how Apple users eagerly upgrade to the latest iPhone.
Startups and small businesses can build CBBE by creating consistent messaging, delivering great customer experiences, and staying authentic.
Take Glossier, a beauty brand that grew by engaging with customers on social media and focusing on real user feedback. Similarly, Patagonia builds loyalty by aligning with sustainability values.
The stronger your brand’s equity, the more customers trust you, prefer you over competitors, and are willing to pay a premium. Building CBBE takes time, but when done right, it turns one-time buyers into lifelong fans.
Types of brand equity models
Customer-based brand equity (CBBE) models help businesses understand how to shape customer perceptions, increase brand value, and create loyal customers.
Let’s explore some of the most well-known CBBE models and how they apply to real-world brands.
Keller’s Customer-Based Brand Equity (CBBE) Model
Developed by Kevin Lane Keller, this model is one of the most widely used frameworks for understanding brand equity. It’s structured like a pyramid with four key stages:
Brand Identity (Who are you?)
This is where brand awareness begins. Customers need to recognize and recall your brand. Think about McDonald’s golden arches—you recognize them instantly, even without the name.
Brand Meaning (What are you?)
This stage focuses on brand associations and perceived quality. For instance, Volvo is associated with safety, while Apple represents innovation and premium design.
Brand Response (What do people think about you?)
Customers form judgments and feelings based on their experiences. If you ask someone about Tesla, they might say it’s “cutting-edge” or “expensive.” Positive brand response strengthens brand equity.
Brand Resonance (Do customers connect with you?)
The top of the pyramid is about loyalty, engagement, and advocacy. Customers don’t just buy your products; they actively promote them. Nike’s “Just Do It” campaign fosters deep emotional connections with athletes and fitness enthusiasts.
Aaker’s Brand Equity Model
David Aaker, a leading brand strategist, introduced another well-known model. He defines brand equity through five key components:
Brand Awareness – How familiar customers are with your brand. For example, Starbucks dominates the coffee industry because people instantly recognize its logo and stores.
Brand Loyalty – How often customers choose your brand over competitors. Amazon Prime members, for instance, stick with Amazon due to benefits like free shipping and exclusive discounts.
Perceived Quality – The customer’s judgment of product quality. For example, Toyota is known for reliability, which is why its resale value stays high.
Brand Associations – What emotions and values customers link to your brand. Dove, for example, stands for body positivity and self-confidence.
Other Proprietary Assets – Patents, trademarks, and unique business advantages that differentiate a brand. Coca-Cola’s secret formula is a classic example.
BAV (Brand Asset Valuator) Model
Developed by Young & Rubicam, the BAV model evaluates brand strength using four pillars:
Differentiation – What makes your brand unique? Example: Tesla disrupted the auto industry with electric vehicles.
Relevance – How well the brand fits customer needs. Netflix dominates streaming because it offers content people want.
Esteem – How much respect and admiration customers have for the brand. Mercedes-Benz is seen as a luxury and high-quality brand.
Knowledge – How well customers understand your brand. Nike is universally recognized because of its long-standing presence in sports.
Which model should you use?
Each model has its strengths. If you’re a startup, Keller’s pyramid can help you build a step-by-step brand strategy.
If you’re scaling, Aaker’s model can guide you in boosting loyalty and associations. The BAV model is great for established brands looking to measure their market position.
No matter which approach you take, strong brand equity leads to loyal customers, premium pricing, and long-term success. The key is to be consistent, deliver value, and build trust—because in the end, your brand is what customers say it is.
Customer-based brand equity (Keller model)
Keller’s model is shaped like a pyramid, with four stages that represent how customers move from simply recognizing a brand to forming a deep emotional bond with it. Let’s break it down with real-world examples.
First stage: brand identity
Who are you?
Before customers can love your brand, they need to know it exists. This is where brand awareness comes in. How easily can people recognize your logo, name, or packaging?
For example, McDonald’s golden arches are recognizable worldwide. Even if you’re in a foreign country and don’t speak the language, you can spot a McDonald’s and instantly know what to expect.
For startups, increasing brand awareness means being consistent across social media, advertising, and product packaging.
Glossier, a beauty brand that started as a blog, built awareness by engaging with customers on Instagram, leading to over 2.6 million followers today.
Related: Top brand awareness examples
Second stage: brand meaning
What are you?
Once customers know your brand, they start forming associations with it. This stage focuses on performance (how well your product meets customer needs) and imagery (the emotions and lifestyle linked to your brand).
Take Tesla—it’s not just an electric car brand. It’s associated with innovation, sustainability, and cutting-edge technology. That’s why Tesla customers aren’t just buying cars; they’re buying into a vision of the future.
If you run a small business, think about what emotions you want customers to associate with your brand. Do you want them to think of reliability (like Toyota) or luxury (like Rolex) when they hear your name?
Third stage: brand response
What do people think about you?
At this stage, customers start forming opinions about your brand. Their judgments are based on quality, credibility, and how well your brand aligns with their needs.
For example, Nike consistently earns positive responses because it delivers high-performance products backed by endorsements from athletes like Michael Jordan and Serena Williams. Its brand messaging also promotes motivation and empowerment.
If customers don’t trust your brand, they won’t engage with it. Transparency, great customer service, and quality products help strengthen positive perceptions.
Fourth stage: brand resonance
Do customers connect with you?
The top of Keller’s pyramid is where brands achieve loyalty, attachment, and advocacy. At this stage, customers don’t just buy your products—they identify with your brand and recommend it to others.
Think about Apple. Its customers don’t just buy iPhones; they line up for hours to get the latest model and passionately defend Apple over competitors. That’s brand resonance.
For small businesses, achieving resonance means creating a community. Patagonia, for example, builds loyalty by supporting environmental causes, making customers feel part of something bigger than just buying clothes.
Keller’s model isn’t just for big brands—it’s a roadmap for any business looking to build strong brand equity.
Whether you’re starting out or trying to grow, focus on awareness, associations, positive experiences, and deep customer connections. When done right, your brand becomes more than a name—it becomes something customers trust, love, and stay loyal to.
Customer-based brand equity (Aaker model)
David Aaker’s Brand Equity Model helps businesses understand how to build, measure, and strengthen brand equity by focusing on five key components.
Unlike Keller’s pyramid model, which focuses on the customer journey, Aaker’s model breaks down what makes a brand strong. Let’s explore each component with real-world examples.
Brand awareness
Do customers recognize your brand?
Before customers can consider buying from you, they need to know your brand exists. The more recognizable your brand, the easier it is to attract and retain customers.
For example, Starbucks has over 35,000 stores worldwide, making it one of the most recognized coffee brands. Even without the name, you’d recognize its green mermaid logo anywhere.
Startups often struggle with awareness. One way to build it is through social media. Gymshark, a fitness apparel brand, started by leveraging influencers on Instagram. Today, it’s worth over $1.3 billion and has a massive online following.
Brand loyalty
Do customers keep coming back?
Loyal customers choose your brand repeatedly and even recommend it to others. This reduces marketing costs and increases profitability.
Think about Amazon Prime—members pay $139 per year for benefits like free shipping and exclusive deals. Because of this, Prime users spend $1,400 per year on Amazon, compared to $600 by non-members. That’s brand loyalty in action.
For small businesses, loyalty programs can be a game-changer. Coffee shops often use punch cards (buy 9, get 1 free), encouraging repeat visits. Even simple gestures like thanking customers personally can build loyalty.
Perceived quality
Do customers trust your product’s value?
Customers don’t just buy products—they buy quality and reliability. High perceived quality makes them willing to pay more for your brand.
For instance, Toyota is known for reliability. That’s why a Toyota Corolla holds its value better than most competitors and lasts well over 200,000 miles.
As a business, you can improve perceived quality by ensuring product consistency, offering warranties, and providing excellent customer service.
Brand associations
What comes to mind when customers think of your brand?
Your brand is more than a product—it’s an experience, a feeling, or a set of values. Customers form associations based on what your brand represents.
For example, Dove is associated with self-confidence and body positivity. Its campaigns focus on real beauty, rather than unrealistic beauty standards.
If you run a small business, consider what message or emotion you want your brand to convey. Maybe it’s affordability, sustainability, or innovation.
Other proprietary assets
What gives your brand a competitive edge?
Aaker’s model also considers patents, trademarks, and unique business advantages. These protect your brand from competition.
For example, Coca-Cola’s secret formula is one of the world’s most famous proprietary assets. Even though many brands sell cola, none taste quite like Coca-Cola.
Startups should register trademarks early to protect their brand identity. Whether it’s a unique logo, product design, or slogan, these small details can make a big difference.
Aaker’s model is a practical tool for understanding and improving brand equity. Whether you’re a startup or an established business, focus on brand awareness, loyalty, quality, associations, and competitive advantages.
By strengthening these elements, you’ll create a brand that customers recognize, trust, and keep coming back to.
Customer-based brand equity (BAV model)
The Brand Asset Valuator (BAV) Model, developed by Young & Rubicam (Y&R), helps businesses understand how brands grow, decline, and differentiate from competitors.
Unlike Keller’s or Aaker’s models, the BAV model compares brands against each other using four key pillars. Let’s explore each pillar with real-world examples and how you can apply them to your business.
Differentiation
What makes your brand unique?
Differentiation is about standing out in a crowded market. It’s what makes customers choose you over competitors.
Take Tesla—it disrupted the car industry with electric vehicles, cutting-edge technology, and a futuristic brand image. Unlike traditional automakers, Tesla sells directly to consumers and constantly innovates with features like self-driving capabilities and over-the-air updates.
If you run a small business, differentiation doesn’t have to mean new technology. It can be your brand’s personality, unique packaging, or even customer service. For example, In-N-Out Burger keeps its menu simple and focuses on fresh ingredients, making it stand out in the fast-food industry.
Relevance
Does your brand meet customer needs?
A brand can be unique, but if it doesn’t matter to customers, it won’t succeed. Relevance measures how well your brand fits into customers’ lives.
For instance, Netflix dominates streaming because it understands what customers want—convenient, on-demand entertainment. With over 260 million subscribers worldwide, Netflix remains relevant by personalizing recommendations and producing exclusive content like Stranger Things and Squid Game.
For small businesses, relevance means knowing who your customers are and what they need. If you sell eco-friendly products, for example, make sure you align with the values of environmentally conscious consumers. Patagonia stays relevant by committing to sustainability and repairing customers’ worn-out gear for free.
Esteem
Do customers respect and admire your brand?
Esteem is about brand reputation and perceived quality. High-esteem brands earn trust, credibility, and positive word-of-mouth.
Think about Mercedes-Benz—it’s associated with luxury, performance, and durability. Because of this, customers are willing to pay a premium for a Mercedes rather than choosing a cheaper alternative.
If you’re a startup, building esteem takes time. Focus on delivering quality, providing excellent customer service, and maintaining a consistent brand image. Even smaller brands, like Glossier, have built esteem by using real customer feedback to create products that people love and trust.
Knowledge
How well do customers understand your brand?
Customers can’t admire or buy from you if they don’t know what your brand stands for. Brand knowledge is about how familiar people are with your brand and what they associate it with.
For example, Nike is globally recognized for athletic excellence, innovation, and empowerment. The “Just Do It” slogan, sponsorships with athletes like LeBron James, and iconic shoes like Air Jordans make Nike a household name.
If you’re a small business, build brand knowledge by telling a clear story and being active where your audience is—whether that’s social media, local events, or word-of-mouth.
The BAV model shows that strong brands balance differentiation, relevance, esteem, and knowledge.
If one of these pillars is weak, brand equity suffers. Focus on standing out, meeting customer needs, building trust, and increasing awareness to create a brand that customers recognize, respect, and stay loyal to.
Final thoughts on customer-based brand equity
Building customer-based brand equity takes time, but it’s worth the effort. Strong brands don’t just sell products—they create lasting relationships. You need to focus on awareness, associations, quality, and loyalty.
I’ve seen startups struggle because they ignored brand perception. Others thrived by prioritizing customer trust and engagement.
Your brand’s strength depends on how customers see and connect with it. Listen to them, be consistent, and deliver value. Branding isn’t just about logos or ads—it’s about trust.
Keep refining your strategy, and your brand will grow naturally. The more customers believe in you, the stronger your brand equity becomes.
Did I miss anything? Did you try these tips? Do you have any questions or comments? Share your thoughts below in the comments section.
