Customer Brand Value

A firm’s brand building efforts count for little if they do not succeed in establishing presence among the customer base and, as a result, fostering engagement on behalf of the customers (Kumar, V. (2008)). Customer Brand Value (CBV) refers to the total value that a customer attaches to a brand over the lifetime of his or her experiences with that brand (Kumar, V. (2013)). CBV is a multi-dimensional construct and metric that measures each aspect of brand value: brand knowledge, brand attitude, brand behavior intention, and brand behavior. It is not enough to capture a customer’s familiarity with the brand. CBV aims higher, seeking to capture the full range of a customer’s emotional and perceptual experiences with the brand (Kumar, V., M. Luo, and V. R. Rao (2017)). The following figure illustrates the 8 attributes of brand value:

The 8 Attributes of Brand Value

Brand Awareness is one of the two components of Brand Knowledge. The idea is simple: the greater a customer’s awareness of the brand, the more positive his/her perception of the brand and the more likely he/she will purchase a product belonging to that brand. Coca Cola, for example, would not enjoy such widespread success without its enjoying worldwide Brand Awareness. This can be measured by a customer’s ability to recognize and recall the brand.

In addition to brand awareness, brand image is also important. Brand Image is influenced both by the firm’s explicit marketing efforts and by any brand-related activity it undertakes. Anything that shapes how the brand is perceived by the customer will impact the customer’s Brand Image. This can be measured by a customer’s perception of brand quality, expectation about the brand, and the perception about the firm.

As a customer obtains increasingly positive Brand Knowledge, he/she will come to place an increasing amount of trust in the brand. Brand Trust is of particular importance when there is no objective measure of quality for a product, leading the customer to place his/her trust in the brand. In most cases, brand trust can be measured by a customer’s perception of brand honesty, and the reliability of the brand.

Where Brand Trust is a rational value – customers use their reason to gauge whether the brand is worthy of their trust – Brand Effect refers to a customer’s emotional response to a brand. Brand Affect is shaped by the customer’s history of experiences with the brand. This can be measured by a customer’s feel-good factor with the brand, level of satisfaction with the brand, and their affinity towards the brand.

Purchase Intention is the key component of Brand Behavior Intention. This component reflects the actual, direct effect of a firm’s marketing actions. It gains special importance when, despite the presence of multiple competitors, the customer intends to purchase from the brand in question. This can be measured by a customer’s intention to purchase the brand, and their intention to purchase the brand over competition.

Brand Loyalty includes attitudinal and behavioral dimensions, and usually reflects a customer’s history of repeated purchases of the brand in question. A customer with high Brand Loyalty will stay loyal to his/her preferred brand even when other brands compete for his/her attention. This can be measured by a customer’s loyalty towards the brand, and their preference of the brand over competing brands.

When a customer joins a brand community and/or builds relationships with other brand users, that customer is engaging in Brand Advocacy. Brand communities reflect positively on the brand, as they aid in disseminating brand information and promote a brand-centric subculture. This can be measured by a customer’s level of social interaction with other customers, and their word-of-mouth communications.

If a customer is willing to pay a premium price for his/her preferred brand, he/she is exhibiting Brand Price Premium Behavior. Further, this behavior can also be measured by a customer’s willingness to pay top dollar for the focal brand, even when competing products are offered at lower prices. Overall, the price premium behavior reflects high Brand Loyalty and, as a result, high Brand Value.

A comprehensive understanding of CBV allows a firm to link CBV to CLV and, as a result, maximize both values. Strategically, this might play out as follows: A firm measures the CLV of each customer in the customer base and then uses this information to systematically sample customers from each decile. The firm then measures the CBV of each customer in this sample and, as a result, obtains insight into each of the various components of brand value. Identifying the pitfalls in current brand communications, the firm can work to implement new strategies to augment CBV and, eventually, CLV. Moreover, by linking CBV and CLV, customers can be segmented accordingly: True Loyalists (high CBV and high CLV), Patrons (high CBV and low CLV), Acquaintances (low CBV and high CLV), and Strangers (low CBV and low CLV). This segmentation approach enables brands to target the right brand communications to the right customers.

Kumar, V. (2008), Managing Customers for Profit: Strategies to Increase Profits and Build Loyalty. Upper Saddle River, NJ: Wharton School Publishing.
Kumar, V. (2013), Profitable Customer Engagement: Concept, Metrics, and Strategies. New Delhi, India: Sage Publications.
Kumar, V., M. Luo, and V. R. Rao (2018), “Linking an individual’s brand value to the CLV: An integrated approach,” Working Paper, Georgia State University, Atlanta, GA.