By: Todd Irwin
Every company talks about brand value. Far fewer understand what creates it. Some think it’s ad budgets. Others think it’s social media buzz, Net Promoter Scores, or how clever your brand purpose sounds in a keynote. But brand value, the monetary figure on your balance sheet, is just the output. The real engine is something softer, harder to measure, and more often misunderstood: brand equity.
Equity is what lives in people’s minds. It’s what they expect of you, what they feel when they see your name, and how likely they are to pay more, choose you again, or tell someone else you’re worth it. And while equity is intangible, it’s not theoretical. It’s why Apple commands premium pricing. It’s why Barbie could stage a billion-dollar comeback. It’s also why Bud Light lost $27 billion in market cap almost overnight. But here’s the catch: equity isn’t built by being different. It’s built by being relevant.
The Misunderstood Math of Brand Value
In the valuation world, brand value has a few accepted formulas: Kantar’s BrandZ, Interbrand’s financial modeling, Brand Finance’s royalty relief method. They each calculate how much of a company’s revenue can be attributed to the brand itself. Not the operations. Not the tech. Just the name, the feeling, the promise.
Those valuations matter. They show up in M&A deals, in stock market premiums, in how CFOs weigh risk. But if you zoom out, the lesson is simple: you don’t get brand value without brand equity. And equity doesn’t come from storytelling alone. It comes from problem-solving. Solving customer pain better than anyone else, so thoroughly that the competition becomes irrelevant. That’s not positioning. That’s de-positioning.
De-Positioning: The Equity Multiplier
Today’s markets are overly saturated, so trying to be “different” is a losing game because everyone is trying to do it, so your brand lives in a world of brands that are trying to out-differentiate each other. The consumer doesn’t want different. The consumer wants the best option. The most useful. The most obvious. The least friction. De-positioning is the strategy of building your brand around a pain point solution that your competitors either ignore or can’t solve well. It’s the strategic act of removing alternatives from the customer’s consideration set, not by attacking your competitors, but by making them obsolete through solving.
Look at Uber. It didn’t brand itself as “cooler than taxis.” It eliminated the pain of hailing a cab, fumbling with cash, and not knowing when your ride would show up. The result? A category shift and a brand that people default to by instinct. That’s de-positioning.
And Liquid Death. It’s water packaged like beer. But the pain it solved is real: health-conscious consumers who are tired of boring wellness brands and wanted to drink something in a can that didn’t feel like a compromise. It made every vitamin water and hydration startup feel irrelevant. What do these brands have in common? They didn’t just create differentiation. They created emotional and functional lock-in. That’s brand equity. And when it sticks, value follows.
The Twitter/X Debacle: A Masterclass in Equity Destruction
Let’s talk about what happens when you do the opposite. In 2023, Elon Musk rebranded Twitter to “X,” retiring the blue bird, the word “tweet,” and 15 years of cultural recognition. Whatever your opinion of Musk, one fact is clear: Twitter had equity. It had verb status. Global familiarity. Even nostalgia. And overnight, that equity was gone. Branding analysts estimate that decision destroyed between $4 billion and $20 billion in brand value. Not because the platform’s servers broke. But because the emotional and cultural equity it built was ripped away with no transition, no logic, no respect for how brands live in people’s minds. It wasn’t just a bad naming decision. It was an equity wipeout. And equity, when lost, takes a hell of a lot longer to rebuild than it does to lose. Fortunately for Elon, he has so much money to burn, he can take his time rebuilding as X, but most companies don’t have that luxury.
The C-Suite’s Blind Spot
Too often, brand equity is treated as a marketing issue. Something soft. Something handled by the CMO while the rest of the executive leadership team focuses on EBITDA. But let me be blunt, equity is a business asset. When your brand builds trust, drives trial, reduces churn, supports a price premium, and earns a seat in the customer’s default decision making set, then the brand is making you money every single day. If something damages it, you will feel it. In the pipeline. In revenue. In retention. Brand equity, without a doubt, deserves a seat at the table alongside financial risk, operational scale, and product strategy, because it impacts everything from margin to retention to enterprise value.
The brands that win—Apple, Uber, Netflix, Amazon—they aren’t just “known.” They’re relied on. Expected. Embedded in the customer’s life. They’ve been engineered to solve first. And as a result, their brand value is extremely high because it’s earned.
How to Build It: Equity in Practice
What do smart brands actually do to grow brand equity?
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- Start with solving the pain. Don’t chase differentiation. Chase the customer’s most important pain point. Go deeper than your competitors. That’s your wedge.
- Make the alternative feel obsolete. If your brand messaging doesn’t signal why every other choice is less desirable, you’re just adding noise to a crowded shelf.
- Deliver on the promise, obsessively. Equity isn’t only built in your messaging. It’s built in your product. The experience. The support. The consistency. What people say about you when you’re not in the room is the brand.
- Quantify it. Use real frameworks. BrandZ, Interbrand, or your own. Just use something. Build a baseline and track it. You can’t grow what you don’t measure.
- Make equity a C-suite responsibility. If your CFO can’t explain how brand equity affects valuation, or if your CEO can’t define your brand’s core promise, you’re playing without your full team.
From Storytelling to Strategy
Too many brand strategies stop at “telling a better story.” But the goal isn’t storytelling. It’s signaling. The job of your brand isn’t to entertain, it’s to make the decision easier. It should collapse the mental time your customer spends evaluating options. The more coherent the story, the faster the decision. This is what de-positioning does. It removes friction. And in removing friction, you build trust. Trust becomes preference. Preference becomes margin. And margin, built over time, becomes valuation.
And the data backs it up.
Studies from the Ehrenberg-Bass Institute show that when brands stop advertising, sales fall by 16% in the first year and up to 25% by year two. Rockerbox found that for every $1 saved by cutting brand spend, companies often need to spend $1.85 to regain lost ground. And research from Brand Finance suggests brand equity accounts for as much as 20% of business value, influencing pricing power, customer retention, and long-term growth. The message is clear: short-term cuts to brand investment may look good on a spreadsheet, but they often lead to disproportionate losses that compound over time.
Final Thought: The Cost of Inaction
The next time someone in the boardroom asks what brand is really worth, don’t point to a logo or a tagline. Point to the pricing power it protects. The churn it prevents. The sales cycles it shortens. The customer loyalty it earns without needing a discount. Remind them that the stronger the brand, the more premium our price can be. Brand equity is not soft. It’s not optional. It’s not a marketing expense. Brand is the most undervalued asset in your company. If you ignore it, someone else will make your brand irrelevant before you even realize what happened.
