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Brand Metrics: Which Ones Should You Track?

By Oct 20, 2006

What causes you to wake up at 3 a.m. in a sweat?

For marketers, it may be response rates and clickthrough rates,

For CFOs, it’s cash flow and net asset value.

Guess which one has the scarier dreams?

Sadly, too few marketers understand what drives CEOs and CFOs, and they often find their budgets being used as slush funds—or worse.

Case in point. A woman at a Texas company tracked open and clickthrough rates, awareness and lead ROI. But she was fired, said Laura Patterson, president of VisionEdge Marketing, speaking at the Promo Live conference in Chicago.

“I didn’t understand what impact she was having,’” the CEO told Patterson. “She gave me all kinds of numbers, but I didn’t understand how to translate that information into how it was affecting our business.’”

Patterson added: “We have to make a connection between the work we do and the revenue the company produces.”

CFOs are interested in efficiency, but Patterson argued that at some point “you are as efficient as you are going to be.”

That means you have to be able to document growth.

She noted that a colleague of the fired exec survived by tracking trial rates, adoption rates and category growth rates.

Based on her own firm’s research, two-thirds of all marketers do not include metrics in their marketing plans.

“That’s scary,” she said.

Moreover, only l8% measure share of wallet, and even less report it regularly to management. A mere 10% measure customer lifetime value.

And yet those are the very metrics that might allow them to prove that they are moving the needle.

And if they fail to stop putting out spreadsheets with 200 tactical metrics on them?

“The marketing discipline will fade away and we will be left reporting into two organizations: finance and sales,” Patterson said. “It’s happening in some companies.”

So what do you track?

In short, everything. But stick to the things that will move the business/sales needle when reporting to C-level executives.

Activity based metrics are not going away. But operational metrics are “where we get to change the conversation, and become strategic member of team,” Patterson said.

For starters, a company might measure leads per rep, lead aging, campaign ROI, the program-to-people ratio, cost per billing dollar and program spend vs. headcount. All those will impress a CFO.

Next, try these on for size:

  1. The number of share determiners (customers that others follow). This should be done by segment.
  2. Average lifetime value.
  3. Size of deals.
  4. Customer attrition rate.
  5. Number of deals per segment.
  6. The percentage of demand per channel

From that, start building models and track leading indicators like:

  1. Share of preference.
  2. Share of wallet.
  3. The number of share determiners per segment.
  4. Net advocacy.
  5. Customer franchise value.
  6. Your rate of growth compared with the market’s rate of growth
  7. Market Value Index.

Predictive metrics are the final frontier, Patterson noted. But she warned that “you have to believe in integrated marketing for this to work. It’s not about one ad.”

She added that marketing people should be compensated based on performance. They should own their programs.

Want to build a marketing dashboard? Make sure it includes the following:

  1. New business metrics.
  2. Competitive metrics.
  3. Customer value metrics.
  4. Overall net advocacy score.
  5. Market Value Index.
  6. Product Information.

A good dashboard should show how marketing is moving the needle, help assess what is and isn’t working and foster decision-making. It should also produce a unified view into marketing’s value and enables better alignment between marketing and the business.

Want some more metrics to dice? Patterson offered these:

Market Share Indicators:

  • Share of preference.
  • Share of voice.
  • Share of distribution.
  • Rate of customer acquisition.
  • Rate of growth: market.

Lifetime indicators:

  • Purchase frequency.
  • Share of Wallet.
  • Advocacy/Loyalty.
  • Tenure

Brand Equity Indicators:

  • Price premium.
  • Net advocate score.
  • Customer franchise value.
  • New product acceptance/adoption rates
  • Product margins.

Meanwhile, Pamela J. Batlis, who runs the MarketKeys agency, urged listeners to focus on “behavior, not stated intent.” She also said that brand equity metrics must be viewed through “predictable, validated lens.”

Batalis added that brands must engage consumers through “any media touchpoint that results in brand equity.”

And she noted that sales are the only truly meaningful measure. People said they loved Krispy Kreme donuts a few years ago, but that didn’t mean they would drive out of their way to a Krispy Kreme shop, Batlis recalled.

“If awareness is your be-all and end-all, you’ve got a long way to go,” she said.

  • Abad

    In todays digital world, awareness is losing its importance. More important is Top-of-Mind Consideration which consumers often start their search with. If I am not aware of a brand, I will become aware once I start searching. Awareness matters more in FMCG but very negligible in white goods.