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Friday, September 28, 2007

Brand metrics -– when to bother and why

I have been thinking about brand metrics for awhile now, as numbers help to demonstrate the value of a brand to the organization, but in my experience are seldom actually used. A couple of questions arise around the concept of brand metrics:

  1. What is most important to measure?
  2. Do people use brand metrics?
  3. What happens if you don’t measure?
  4. Are the advanced brand measurement techniques you read about really worthwhile or just a lot of gobbledygook designed to make someone look smart?

Let’s take these one at a time.

1. What is most important to measure? According to Prophet Brand Strategy, it is only important to measure things that help you make strategic business decisions. (http://www.prophet.com/downloads/articles/Brand%20MetricsReprint.pdf) So for example, a certain retailer wanted to upgrade their image from low-end to high-end so that they could sell more high-margin goods. Therefore, they instituted a measure called “basket composition,” basically measuring what percentage of each sale had been composed of high-margin items.

The connection between brand and basket composition is simple and causative. You change the image of the retailer, the consumer is more willing to purchase high-margin items. But it’s not always so easy to determine the connection between brand and business results. For a government agency, for example, increased retention might be one goal of an internal brand initiative. However, that brand initiative will likely be bundled with increased benefits from Human Resources. So if turnover is reduced, it is difficult to say how much the brand contributed to it vs. how much the HR factor did. In that case, what do you measure? Perhaps you go back to awareness (asking about the ability to recall key brand messages) and impact (literally asking the extent to which branding messages have affected the desire to look for a job elsewhere).

It goes without saying that if you're not making strategic business decisions that involve the brand (which is possible), you don't need to measure anything except perhaps awareness, because that affects everything else.

2. Do people use brand metrics?

Some have pooh-poohed awareness (http://chiefmarketer.com/crm_loop/roi/brand_metrics_track/), saying things like “If awareness is your be-all and end-all, you’ve got a long way to go,” but I think that is definitely the place to start, especially given that so few companies measure any aspect of brand at all. As Prophet notes, its “2002 Best Practices study showed that only one-third of the 90 companies surveyed in 2001 measure the performance of their brands.” Similarly, Chief Marketer states that VisionEdge Marketing found the exact same thing: “two-thirds of all marketers do not include metrics in their marketing plans.”

I am personally not surprised that so few companies use brand metrics, because it is difficult to definitively relate brand realities to business outcomes. Also, many marketing decisions are based on whim, intuition, gut instinct, etc. and not measurable business arguments. Finally, organizations can tend to do marketing/branding because everyone else does, and there may not ultimately be pressure on the marketing director to show results.

3. What happens if you don’t measure?

Sometimes, nothing bad will happen. But other times, if you don’t measure, you are in danger of having two things happen to you, as Chief Marketer notes. The first is that your marketing budget may be used as a “slush fund” for executives who need to get budget money from somewhere. The second is that you may be fired for failing to demonstrate bottom-line results.

So even though it may be difficult, you’ve got to measure something, and that something has to connect with business objectives. I say, start with awareness. Then find a way to connect it to a business result. This means coming up with the right cause-effect relationship, the right survey questions, and the right target population to ask those questions to.

4. Are the advanced brand measurement techniques you read about really worthwhile or just a lot of gobbledygook designed to make someone look smart?

I do think that frequently, advanced techniques are designed to make someone look smart and are not really useful for the average marketer. A helpful article in this area, by Prophet Brand Strategy, is called “Brand Metrics: Gauging and Linking Brands with Business Performance.” (http://www.prophet.com/downloads/articles/MunozBrandMetrics.pdf) I like the way they advocate the following: “Metrics should be: simple to use…meaningful…actionable…repeatable…time-bound.” (SMART)

  • They explain that the measures should be simple because you want to spend your time managing the brand, not measuring it. Overly complicated measurements are a total waste of time.
  • They should be meaningful in that they tie the brand to a business result.
  • They should be actionable in that you can do something about them (make a business decision).
  • They should be repeatable to ensure consistency in measurement.
  • And finally, they should be time-bound in that you can take the pulse of the brand and compare it to other brands and the competition regularly.

To get just the right metric, one that meets all of these criteria, takes a lot of thinking and you might even want to hire a consultancy to help. At the same time, I still say that awareness is not a bad place to start…it is how you carry it forward and create cause and effect relationships that makes the biggest difference. Ultimately, of course, the measure is sales volume: is brand awareness leading you to move the merchandise? (Of course that metric is not useful for everyone, if for example you are in a nonprofit or government agency setting.)

Of course, we haven't even gotten into the discussion of whether measures mean anything, because you may not be able to trust what survey respondents tell you. But that is a discussion for another day.