Brand equity is the difference a brand name makes to how customers respond to a company's products and marketing. Keller (1993) defined customer-based brand equity as the effect that knowing a brand has on how customers react to its marketing, built from brand awareness and the associations people hold about it. In B2B markets, brand equity shows up when organizational buyers will pay more for a supplier they know, recommend it to others and accept its new products more readily. For industrial companies, research shows it is built less by advertising and more by the selling organization: its people, its capabilities, its service and its reputation.
What is brand equity?
Keller's (1993) model is written from the perspective of the individual customer. A brand has positive customer-based brand equity when people respond more favorably to its marketing than they would to the same product or offer under an unknown name. That happens when customers are familiar with the brand and hold favorable, strong and unique associations with it.
The model has two parts:
- Brand awareness. Do the people who matter know you exist, and do they think of you when the need arises?
- Brand image. What associations come to mind when they think of you: reliable, expensive, innovative, hard to deal with?
I first saw brand equity at work before my PhD, in the marketing department of a family-owned food manufacturer. Its flagship product was simple to make, yet the company had built a reputation for the highest quality in its category. That reputation let it charge the highest price in the market and still lead in market share, even though competitors spent more aggressively on marketing and priced lower (Farrokhi, 2020). Competitors could copy the product. They could not copy the name.
The financial side of the same idea, how brand equity becomes price premiums, lower risk and valuation, is covered in our article on the invisible balance sheet. This guide focuses on what brand equity means for industrial buyers and how to build and measure it.
Does brand equity exist in B2B markets?
For a long time, many marketers assumed that professional buyers ignore brands and judge only specifications and price. The research says otherwise.
Hutton (1997) asked whether organizational buyers show brand-equity behaviors. Using hypothetical buying situations, he found three: buyers were willing to pay a significant price premium for their favorite brand, to make referrals, and to extend their preference to other products with the same name. The better known the favorite brand, the more likely buyers were to show all three.
B2B brand equity attaches to different things than consumer brand equity. Kuhn, Alpert and Pope (2008) tested Keller's model with senior buyers of waste-tracking technology. Buyers put much more emphasis on the selling organization, including its corporate brand, credibility and staff, than on individual product brands. The authors proposed a revised model for B2B use.
For most industrial companies, then, the corporate brand is the brand. Buyers are judging the company behind the product.
What 71 studies say builds brand equity
For my doctoral research I ran a meta-analysis of the quantitative research on customer-based brand equity. Starting from 1,959 papers, 71 studies met the criteria, giving 92 samples, 414 effect sizes and close to 30,000 respondents. I grouped the drivers into three families and tested them together with structural equation modelling (Farrokhi, 2020):
- Relational factors: trust (ρ = 0.69; ρ is a correlation on a scale from −1 to 1), brand experience (0.68), the customer–brand relationship (0.61), satisfaction (0.60) and brand attachment (0.56).
- Attitudinal factors: brand image (0.66) and brand personality (0.66).
- Marketing mix: advertising (0.55), distribution density (0.58) and promotions (0.79, from only three samples).
Two results matter most for industrial companies. First, price level and price deals had no significant relationship with brand equity. A discount may win an order, but in this evidence it did not build the brand. Second, brand equity was strongly associated with outcomes managers care about: repurchase intention (ρ = 0.81), brand preference (0.79), brand performance (0.70) and perceived value (0.69). It was negatively associated with perceived risk (−0.30).
Almost all of these studies came from consumer markets, and they measure association, not cause. The B2B research below points the same way, with one difference worth noting: in industrial markets, the selling organization and its people carry much of the weight.
What builds industrial brand equity
Resource advantages that buyers can see
Wang, Capon, Wang and Guo (2018) surveyed 443 buying center members who make purchase decisions in high-technology B2B markets. They identified six dimensions of industrial brand equity:
- Functional advantage in products
- Solution advantage in services
- Analytical advantage in customer relationship management
- Omni-channel advantage in communication
- Symbolic advantage in publicity
- Network advantage in resource sharing
All six had significant effects on customer perceived value and brand loyalty. Purchasers, managers and users weighed the dimensions differently, which means one brand message will not land the same way with everyone in the buying center.
The sales force
Baumgarth and Binckebanck (2011) surveyed 201 managers in German B2B firms to compare the drivers of brand equity. The most important driver was the salesperson's behavior, followed by the salesperson's personality, then product quality, then non-personal marketing communications. In other words, the people you send to customers did more for brand equity than your ads and brochures.
Emotional intelligence and content
Hutchins and Rodriguez (2018) proposed functional and emotional paths to B2B brand equity. Analysing 11 B2B companies recognized for their social media content, they argued that a firm's collective emotional intelligence, shown through how it communicates, is a route to brand equity alongside product quality and process. We cover the emotional side of industrial buying in emotions in B2B buying.
Genuine sustainability practice
Vesal, Siahtiri and O'Cass (2021) collected data from B2B manufacturers and their customers. Environmental sustainability practices improved the manufacturers' brand image, which in turn improved market performance. The effect was stronger when the firm managed customer relationships well and worked with customers who had positive environmental attitudes. The claims have to be true, which is why we wrote a separate guide on greenwashing and B2B sustainability claims.
Being present and responsive online
In a survey of 200 customers of UK-based B2B firms, a supplier's presence on Twitter, LinkedIn and Facebook had a positive effect on commitment, intimacy, satisfaction and perceived partner quality. Interactivity improved perceived partner quality, and responsiveness improved commitment (Karampela, Lacka & McLean, 2020). See our guide to LinkedIn for industrial companies.
Brand equity and financial value
Two studies of US public companies link B2B branding to firm value.
- Shareholder value. Guenther and Guenther (2019) studied 380 US-based public B2B service firms. B2B service brands had positive value to shareholders. How much depended on the branding strategy (corporate branding versus multi-branding) combined with the type of service offered, but not on how diversified the firm was.
- Brand management efficiency. Rahman, Rodríguez-Serrano and Lambkin (2018) looked at all brand management inputs and outputs together in US B2B firms. Firms with higher brand management efficiency had higher firm value, measured by Tobin's q.
These are correlational studies of large public companies, so treat them as evidence rather than a forecast for your business. They do show that investors notice the difference.
On the pricing side, brand equity is part of what makes a value-based price defensible. See value-based vs cost-based pricing.
How to measure B2B brand equity
Hutton's three behaviors make a practical measurement framework for an industrial company, because each one can be observed in your own sales data.
- Price premium. Track price realization against named competitors on comparable bids. Are you winning at a higher price, or only when you match?
- Referrals. Record how many new opportunities came from customer recommendations, consultants and peers. Ask every new prospect how they heard of you.
- Extension. When you launch a new product or service, how quickly do existing customers try it?
Add measures for Keller's two components:
- Awareness in target accounts. Survey or interview buyers in your target segments: which suppliers can they name unprompted?
- Image. Ask buyers to describe you in a few words. Compare their words with the position you want to hold.
- Shortlist rate. How often are you invited to bid when a relevant project comes up?
Measure by segment and by buying center role. Wang et al. (2018) found purchasers, managers and users weigh brand dimensions differently, so an average can hide the real picture.
A plan to build brand equity in an industrial company
- Decide what you want to be known for. Pick the two or three associations that matter most to your buyers and that you can prove. Our guide to B2B branding for industrial companies covers positioning.
- Brand the company, not just the product. Buyers weigh the selling organization's corporate brand, credibility and staff (Kuhn et al., 2008).
- Don't build the brand on discounts. Price deals had no significant relationship with brand equity in my meta-analysis (Farrokhi, 2020). Use them for specific commercial goals, not as your positioning.
- Invest in the sales force as a brand channel. Salesperson behavior was the strongest driver of B2B brand equity in the Baumgarth and Binckebanck (2011) study. Train for it and hire for it.
- Make your resource advantages visible. Service capability, analytics, communication channels, publicity and partner networks all build equity when buyers can see them (Wang et al., 2018). Publish case studies, test data and service records.
- Tailor proof to each role. Engineers, managers and users need different evidence.
- Involve customers in creating the solution. In three experiments, run online and in a university lab, in both a service and a product setting, people who did more of the work of designing their own offer rated the brand's equity higher than those who did less (Farrokhi, 2020). Those were consumer settings. In industrial markets the nearest equivalents are joint specification, application trials and co-development; whether the effect holds there as strongly has not been tested.
- Be present and answer quickly online. Presence and responsiveness were linked to stronger relationships (Karampela et al., 2020).
- Measure yearly. Use the price premium, referral, extension, awareness and shortlist measures above, by segment.
A note on the evidence: a 2024 review of 64 articles on industrial brand equity, published between 2010 and 2023, described the field as recent, with many aspects still underexplored (Castillo-Villar & Murillo, 2024). The direction of the findings is consistent, but individual effect sizes come from specific samples.
Frequently asked questions
What is brand equity in simple terms?
The extra value a brand name adds. If buyers respond better to your offer because it carries your name than they would to the same offer from an unknown company, you have positive brand equity.
What is the difference between B2B and B2C brand equity?
Keller's (1993) model was built around the individual consumer. In B2B, buyers put more weight on the selling company, its credibility and its staff than on individual product brands (Kuhn et al., 2008), and salespeople are a major driver (Baumgarth & Binckebanck, 2011).
What builds brand equity?
In a meta-analysis of 71 studies, promotions, trust and brand experience had the strongest associations with customer-based brand equity, followed by brand image, brand personality, the customer–brand relationship and satisfaction. Price level and price deals showed no significant relationship (Farrokhi, 2020).
What are examples of brand equity in B2B?
A buyer who pays more for a known supplier's component, an engineer who recommends a supplier to a colleague at another plant, or a customer who tries a supplier's new service because they trust its existing product. These are the three behaviors Hutton (1997) found among organizational buyers.
How do you measure brand equity for an industrial company?
Track price realization against competitors, referral rates, uptake of new products, unprompted awareness in target accounts, how buyers describe you and how often you are shortlisted.
Is brand equity the same as brand value?
The terms are often used loosely. Brand equity usually describes the customer response a brand creates. Brand value usually refers to a financial estimate of what the brand is worth. This guide uses brand equity in the customer sense.
The bottom line
Pull your last twenty competitive bids and check two numbers: how often you won without matching the lowest price, and how many of those opportunities came from a referral. Those two figures are the clearest early read on your brand equity. AXXEN's Brand Systems work helps industrial companies build the positioning and proof that raise both. For how brand reduces risk for investors, read how industrial branding reduces perceived risk, and for the full plan, see the B2B marketing strategy playbook.
About the author
Mo Farrokhi, PhD, is the founder of AXXEN in Calgary, Alberta. His path runs from electrical engineering through an MBA and a PhD in marketing to industry roles, including VP Marketing & Product at a TSX-listed clean-tech company. AXXEN builds marketing systems for technology, manufacturing and industrial companies that have outgrown ad-hoc marketing.
Sources
- Baumgarth, C., & Binckebanck, L. (2011). Sales force impact on B‐to‐B brand equity: conceptual framework and empirical test. Journal of Product & Brand Management, 20(6), 487–498. https://doi.org/10.1108/10610421111166630
- Castillo-Villar, F. R., & Murillo, E. (2024). Industrial brand equity: a systematic literature review and directions for future research. Cogent Business & Management, 12(1). https://doi.org/10.1080/23311975.2024.2440623
- Farrokhi, M. (2020). Working together toward a better brand: Customer-based brand equity and co-creation of value with consumers (Doctoral thesis, University of Calgary, Calgary, Canada). https://hdl.handle.net/1880/111769
- Guenther, M., & Guenther, P. (2019). The value of branding for B2B service firms—The shareholders' perspective. Industrial Marketing Management, 78, 88–101. https://doi.org/10.1016/j.indmarman.2017.11.013
- Hutchins, J., & Rodriguez, D. X. (2018). The soft side of branding: leveraging emotional intelligence. Journal of Business & Industrial Marketing, 33(1), 117–125. https://doi.org/10.1108/jbim-02-2017-0053
- Hutton, J. G. (1997). A study of brand equity in an organizational‐buying context. Journal of Product & Brand Management, 6(6), 428–439. https://doi.org/10.1108/10610429710190478
- Karampela, M., Lacka, E., & McLean, G. (2020). “Just be there”: Social media presence, interactivity, and responsiveness, and their impact on B2B relationships. European Journal of Marketing, 54(6), 1281–1303. https://doi.org/10.1108/ejm-03-2019-0231
- Keller, K. L. (1993). Conceptualizing, Measuring, and Managing Customer-Based Brand Equity. Journal of Marketing, 57(1), 1–22. https://doi.org/10.1177/002224299305700101
- Kuhn, K. L., Alpert, F., & Pope, N. K. L. (2008). An application of Keller's brand equity model in a B2B context. Qualitative Market Research: An International Journal, 11(1), 40–58. https://doi.org/10.1108/13522750810845540
- Rahman, M., Rodríguez-Serrano, M. Á., & Lambkin, M. (2018). Brand management efficiency and firm value: An integrated resource based and signalling theory perspective. Industrial Marketing Management, 72, 112–126. https://doi.org/10.1016/j.indmarman.2018.04.007
- Vesal, M., Siahtiri, V., & O'Cass, A. (2021). Strengthening B2B brands by signalling environmental sustainability and managing customer relationships. Industrial Marketing Management, 92, 321–331. https://doi.org/10.1016/j.indmarman.2020.02.024
- Wang, Y. J., Capon, N., Wang, V. L., & Guo, C. (2018). Building industrial brand equity on resource advantage. Industrial Marketing Management, 72, 4–16. https://doi.org/10.1016/j.indmarman.2017.11.009
