Keeping customers loyal is similar to a marriage. It involves patience, effort and trust. More importantly, it involves keeping things interesting - especially after the honeymoon phase is over.
Historically, companies have relied on brand trackers to evaluate their brand health and gauge whether their target market is getting bored. Companies use trackers to measure awareness and consider these tools as one of the building blocks of brand strategy.
While trackers provide a lot of great data, they do not always paint a complete picture. As we have noted in a previous post, many CMOs are starting to realize that brand trackers are lagging indicators of a brand's health. Brand trackers tell you what happened, but they do not provide insights into what you should do next.
Also, brand trackers rarely link to Key Performance Indicators (KPIs). They do not explicitly make the connection between changes in your brand's image and KPIs such as increased revenue per customer.
In addition to high costs, many brand trackers use a small sample size and provide infrequent assessment. Monthly or quarterly assessments sufficed a few decades ago, but today's business world requires a quicker way of gaining consumer insights.
Similarly, financial statements - while an important source of historical business data - do not provide leading indicators.
To be clear, I am not arguing that companies abandon their brand trackers and financial statements. These tools are still prominent because they provide a lot of business value. But to keep pace with consumers, companies need insights that will complement historical data with other qualitative and quantitative analytics.
We have learned that CMOs are missing some critical leading indicators of profitability. Some of these factors include the following:
- Competitive uniqueness. Sustainable competitive advantage requires companies to offer something unique about their brand. Competitive uniqueness means consumers distinguish your brand from others and are willing to pay a premium as a result.
- Global insights. The most profitable brands look beyond their own industry, but most brand trackers are category-specific. Remember that brands that are not in your industry also compete for your customers' spending dollars. Do you have a way of assessing how your company stacks up against other global brands?
- Meaningful relationships. From our research, meaningful relationships between consumers and brands result in more volume potential and deeper consumer usage and consideration. Trackers measure brand awareness but fall short when it comes to revealing how meaningful relationships are to consumers.
- Social footprint. With the emergence of social media, consumers expect businesses to listen to and engage with them. Innovative products such as MicroStrategyå¨ Wisdom provide Facebook brand affinity data that lets you know how consumers feel about your brand.
- Balance. Brands need to strike a balance of brand-building for today and tomorrow. Taking shortcuts to build short-term sales may have negative long-term implications.
- Smart resource allocation. The modern consumer is bombarded with endless choices, which makes resource allocation more critical than ever. While it is tempting to allocate most of your budget on promotions, smart CMOs recognize the importance of also monitoring responses to your product, pricing, placement and service initiatives.
- Superior communication. Selling to consumers involves the art of persuasion. To earn their customers' love, brands need to know if their messages still resonate. To do this, brands need an idea on when to talk and when to listen. Communications is not about one-way dialogue - brands that make an emotional connection nurture consistent two-way communications by listening to the consumer.
Companies who bridge the gap between marketing and finance can demonstrate the importance of brand with key drivers of profitability, growth expectations, valuation, and shareholder value creation. Linking perception, transactional, and public financial data enables you to make better decisions that will help establish an emotional connection with consumers.
What metrics do you track for brand valuation? Does your brand tracker provide enough information about brand value? Share your thoughts with us - we'd love to hear from you.