Imagine two products that are equally good and equally priced. Why would someone pick one over the other? What’s left is the brand: what that person knows and feels about it. That is brand equity, and it shows up as four things you can measure. The first three are gates, each inside the one before. People have to know you. Then they have to feel all right buying you: plenty of people feel lukewarm about brands and buy anyway, but if your values clash with theirs, they won’t. Then you have to make their shortlist. Preference is different: it’s a share. Buyers with a favorite split 100% of their loyalty between you, the rival and everyone else.
Your competitors’ awareness, favorability, consideration and availability stay fixed. When you win more preference, it comes at their expense. The blue lines show how those changes affect who wins the buying occasion.
Points of buying occasions, from where you are now. Every measure has to be good enough, because a weak one limits what the others can deliver. This shows how much each move is worth, so you can decide how far to push each one. Ten points isn’t the same size of job for each: winning ten more points of buyers’ favorites is usually far harder, and slower, than ten more points of awareness.
A simple model. Favorability is read as “would feel all right buying”, not “likes the brand”, and each gate is set as a share of the one before; real surveys report each as a share of everyone. Shares of buyers and shares of buying occasions only match if everyone buys equally often. Buyers with a favorite pick it when it’s there, and about half look for it when it isn’t. Everyone else splits evenly between what’s on their shortlist and on the shelf. When your share of favorites grows, the rival and other brands lose it in proportion. These are guesses chosen to show the shape.
You can’t be on a shortlist if the buyer doesn’t know you, or if buying you would feel wrong to them. A favorite has to be on the shortlist. Everyone with a favorite has exactly one, so the shares of favorites add to 100%. A brand that isn’t on the shelf can only win buyers who go looking for it.
All numbers are illustrative. About half of buyers with a favorite look for it when it’s missing. Buyers with no favorite split evenly across what’s on their shortlist. When your share of favorites grows, the rival and other brands lose it in proportion.
Each measure for you and the brands you compete with, in your market, asked the right way: favorability as “would you feel comfortable buying from them?”, not “do you like them?”. How many buyers in your category have a favorite. What your fans actually do when you’re not on the shelf.
Enough of each, and a view of how much more is worth buying. All four have to be good enough: a brand few people know can’t be preferred by many, and a well-known brand that people rule out can’t be shortlisted. So the question isn’t which one to work on. It’s how far each one needs to move against your main rival and the rest of the market, and what that movement is worth. The next module puts a value on it.
Numbers illustrative