The main difference between brand equity and customer equity is that the former one is the monetary value, strength, and the net worth of the brand, while the customer equity is the lifetime value of the brand’s consumers.
So, both concepts define the worth of having as many consumers as possible and see brand loyalty as the main component to achieve these values. The elements of analysis of brand equity and customer equity are products and customers, respectively.
Both the brand equity and customer equity focus on consumer loyalty to the company and trying hard to attract as many clients as possible who pay high prices for the products. The brand equity can determine through five components like brand awareness, brand associations, brand loyalty, assets, and elements.
On the other hand, customer equity can determine through the three main components like Value Equity, Brand Equity, and Retention Equity.
It is what the consumer assesses the value of the company’s services or products. This concept relies on perceptions of what loses to get some other things. Value equity can determine through three elements: Quality, convenience, and price.
• Quality-How does the consumer estimate the quality of the brand’s products?
• Convenience-How convenient is it to do business with the brand?
• Price-How good is the price?
It is the intangible assessment and consumer’s subjective above and beyond the perceived value of the brand. Brand equity can easily influence from the customers’ life experiences and associations with the company. The components of it include customer brand awareness, customer attitude towards the brand, and customer perception of brand ethics.
The vital role of brand equity in building the customer equity is to:
• Build awareness and attracts consumers
• Build emotional attachments with the consumers
• Remind customers to repurchase the items
It is the possibility that how the consumer stays with the company in any consequences like bad or good. Retention equity always focuses on building the relationship between the brand and customers. It considers the following questions:
• Does the customer get advantage from the relationship with the brand?
• Does the brand get advantage from its relationship with the consumers?
• Does the consumer leave the brand if their relationship discontinued?
The main components of retention equity are:
• Loyalty Programs (purchase/reward events)
• Affinity (emotional attachment) programs
• Knowledge-building events
• Special treatment and recognition events
• Community programs
To sum up, one can say that brands don’t exist without customers and vice versa. Consumers serve as a profit-medium for the companies to increase their brand value. Customer equity doesn’t need brand equity to survive, and in some cases, brand equity also persists without the presence of the former one. For example, a family may have a positive attitude towards the two brands like McDonald and Pizza Hut, but they only purchase from the brand Pizza Hut more frequently.
It is right to say that both brand equity and customer equity are highly related to each other.