What is the Difference Between Brand Equity and Customer Equity?

By on December 15, 2011

Brand equity is generally speaking, the monetary value of a brand, its total worth. Customer quity is the lifetime value of a customer.

What Brand Equity and Customer equity have in common?

  • In both the cases there is high emphasis on customer loyalty to the brand.
  • Both stress that there is value in “having as many customers as possible paying as high as possible”.

What they don’t have in common?

  • Brand equity focuses more on the strategic value of a brand, while customer equity focuses more on the bottom line financial value gained from customers.
  • Customer equity can have a “spillover” effect for more than one brand. A loyal customer may regularly buy more than one brand from a company. But brand equity is the value derived from only that brand. Its focus is narrow.
  • Both brand and customer equity can exist without each other. Scenario 1: I may like two particular brands of shampoo, but buy only one regularly. The other brand will have brand equity without customer equity. Scenario 2: I may buy regularly cheap/fake commoditized products from a company. Here the company will have customer equity without any brand equity.

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