Brand equity is the value a brand adds to a product beyond its features. In practice it shows up in three ways: the customer is willing to pay more than for a comparable unknown alternative, decides faster and with less comparison shopping, and returns even when something else is momentarily cheaper. For a company this means higher margin, a lower customer acquisition cost, and resilience against price competition. It can be tracked even without expensive research: through the trend in the number of searches for the brand name, the share of direct traffic, the difference in conversion rate between people who arrived via a branded versus a non-branded query, and the repeat purchase rate. Building it is slow and its effect shows up with a delay, which is why it is often forgotten in budgets.
See also: Share of search, Brand consistency, Incrementality.
