by Jim Lenskold

Use Outcome Objectives to Set Brand Metrics

One of the toughest questions for marketers to answer is “what is the ROI on my brand investments?” You may believe that the challenge is primarily a measurement issue. Or you may be among the many that believe the brand investments should not require an ROI measurement. The real problem is that “brand” is not effectively defined in terms of what it encompasses and how it ultimately contributes to business performance today or in the distant future (see Jonathan Salem Baskin’s article “Flipping the Telescope” for another perspective on brand definitions). Measuring brand ROI is a big topic, within which this article will concentrate on definitions and a perspective to guide you on the right path for setting brand metrics. It comes down to getting better clarity on the target segments and the expected impact on specific outcome objectives for each.

At a high level, a good way to define “brand” in such a way that the marketing organization can manage, measure, and maximize value is as the collective experience with your branded company, product/service, or solution. We can break this down into different types of branding that align with the customer buying cycle (or “customer funnel”). These branding types include image-building, engagement experience, and customer experience.

Three Primary Components of Brand

  1. Image-building represents what potential buyers register and retain about the company or its branded products/services from all sources of communications, including the company’s mass media communications, third party news media, competitor communications, and consumer-generated communications. These “brand-promise” communications form the first impressions of potential buyers and can also reinforce the perceptions of current buyers. Image-building is often considered the only form of branding, measured strictly in terms of awareness and perceptions in that “cloud-like” space that floats above the actual purchasing cycle, leaving a huge gap in the ability to both manage and measure branding.
  2. Engagement experience adds the impression potential buyers get from their behaviors and actions that have them interacting with the company prior to the purchase. Engagement includes different forms of interactions such as direct contacts with the company, visiting the website, or talking with a sales rep. These experiences make a much stronger impression than the image-building experience, yet are not typically included as part of branding.
  3. Customer experience encompasses the collective impression that also includes an experience as a customer using the products and services. Clearly the most influential, this experience is driven by every touchpoint and aspect of the brand. Some measures, such as satisfaction and loyalty, are captured by marketing, but often the customer experience is assessed in terms of product and service improvement without consideration of the brand.

If you think about fast-moving consumer package goods, where many marketing and brand practices have emerged, the engagement experience is a low-action, no-interaction purchase process and the customer experience is not likely to differ much from competitors. The minimal impact of these two types of branding elevates the impact of image-building. But this is not typical in most other business models, requiring that marketers depart from this mindset and take the broader perspective proposed here.

Funnel-Driven Target Segments

The first step we have to take is to break down the target audience into segments where brand strategies, outcome objectives, and metrics must differ to be successful. This requires stepping away from the mindset of “present our brand in a good image to all and wonderful things will happen.” Managing your brand investments is more complicated than that and high-impact strategies must go below the surface to actually motivate desired behaviors.

Look at this relatively simple breakdown of the target audience that applies to just about every type of business and think about how the three types of branding evolve as potential buyers and customers progress from segment to segment.

  1. Potential buyers (non-customers) not currently buying in your category
  2. Potential buyers buying from competitors
  3. Potential buyers currently engaged in the buying cycle with your brand
  4. Potential buyers previously engaged the buying cycle with your brand
  5. Customer – currently buying
  6. Customers – recently bought
  7. Customers – lapsed / inactive

There may be some core dimensions of your brand that can be reinforced across these segments concurrently but there are clearly different needs and opportunities to create a brand impact for each segment based on funnel stage. Take for example a mid-size software company. As they concentrate their brand initiatives on potential buyers in the early stages of the funnel, they may take the approach of communicating technical superiority and performance to get prospects engaged. For prospects already engaged, the brand dimensions of trust and credibility will become more important as they compete against larger, more established competitors. For current customers, the brand must reinforce leadership and value to boost future sales.

And that is just the communications portion of brand management. The engagement experience and customer experience have greater impact on defining your brand, after which additional communications have limited influence. As prospects are engaged with your brand through website visits, sales reps, your distributors and channel partners, trial products, and/or proposals, their behaviors are driving deeper brand impressions. Your product or service will be assessed relative to the brand promise and delivery to solidify the brand in their minds.

Brand initiatives do not have to motivate behaviors on their own. In many cases brand initiatives are responsible for “market conditioning” that makes the demand generation and sales initiatives more effective. But keep in mind that while brand-building initiatives do not always generate demand or sell, demand generation and sales initiatives always influence brand.

Setting Clear Objectives

Managing the effectiveness of branding initiatives requires setting clear objectives tightly aligned to business outcomes. Bringing together these funnel-based segments and different forms of branding, we now have the framework to define objectives and establish the right brand metrics. Setting behavior-based outcome objectives differs from the typical awareness and perception objectives associated with brand marketing. This additional detail and clarity in objectives actually helps define the appropriate awareness and perception metrics. The chart below provides general direction.

BRAND COMPONENT

FUNNEL-BASED SEGMENT

OUTCOME OBJECTIVES

Image Building • Potential buyers (non-customers) not currently buying in your category
• Potential buyers buying from competitors
»» Incremental engagement behaviors (active in buying cycle)
»» Incremental demand (leads)
• Potential buyers currently engaged in the buying cycle with your brand
• Potential buyers previously engaged in the buying cycle with your brand
»» Increased effectiveness of engagement initiatives and sales conversion rates
»» Higher value sales
• Customer – currently buying
• Customers – recently bought
• Customers – lapsed / inactive
»» Incremental re-engagement (engagement for repeat purchasing)
Engagement Experience • Potential buyers currently engaged in the buying cycle with your brand
• Potential buyers previously engaged in the buying cycle with your brand
»» Increased effectiveness of engagement initiatives (funnel progression)
»» Increased sales effectiveness and close rates
»» Higher value sales
Customer Experience • Customer – currently buying
• Customers – recently bought
• Customers – lapsed / inactive
»» Incremental repeat purchasing, customer growth, and cross-purchasing

 

Beyond this framework, there are also truly long-term brand investments that require time and major investment to make significant perception shifts. When marketers define their objectives as “long-term,” they must be able to articulate why their initiative will have no influence on the behaviors of prospects and customers currently active in the buying cycle but then have a delayed impact on behaviors in the future. We are concentrating this article on the majority of branding efforts that should have a short-term influence in behaviors or sales, and also contribute to longer-lasting image building. There is more to long-term branding efforts, which requires a separate article.

Brand Metrics & Management

The next step is to develop strategies that help deliver the desired outcome objectives. It is at this point where brand metrics are defined. For each of the three types of branding, it is critical to understand what set of perceptions and behaviors drive the outcome objectives. The mindset of a first-time potential buyer is much different than an existing customer. The criteria to motivate prospects and customers through the buying cycle also changes. Early funnel brand metrics are likely to consist of fundamentals that drive consideration and then shift more to attributes that lead to engagement. There is not one approach or set of metrics that works for all companies. One company’s strategy may involve communicating “product performance” in their image-building branding and then drive “credibility” during the engagement experience, while another company may do the exact opposite. The opportunity to improve effectiveness is greatly increased when brand metrics are defined specifically for segments in the buying cycle to achieve the expected outcome objectives.

Once again, we need to break away from traditional thinking in how we manage the performance of these brand metrics. Instead of concentrating only on communications, look more at how engagement experience or customer experience influence brand metrics and outcome objectives. New prospects not yet active in the buying cycle are influenced primarily by communications but impact on these early stage segments are not as significant as interacting with prospects already in the buying cycle or customers that purchased your brand. Yet in most businesses, the influence that comes from engagement experience or customer experience (among the better target segments) is barely considered in managing brand performance.

Putting the right metrics in place enables you to more effectively measure and manage brand performance. The connection to outcome objectives improves your accountability, helping to build the “brand” for your marketing organization in the minds of your executives.