Holistically Measuring Model Experiences | Branding Technique Insider
It is advisable to take a holistic approach when measuring brand experiences. To do this, you need to identify employee, brand, and financial metrics before, during, and after your brand experiences are built.
A holistic approach to measuring brand experiences offers a number of advantages. Your measurement will be balanced as you record short / long term, internal / external and hard / soft measurements. It will also help you demonstrate, no doubt, the value of brand experiences for your business. If you take action on employees and brands, you will be able to take the necessary precautions before financial performance suffers.
The dangers of concentrating on purely financial indicators
Chief Marketing Officers are under constant pressure to achieve short-term financial goals such as sales, profit margins, earnings before taxes and depreciation. This is highly territorial because CEOs have to generate financial returns that satisfy investors and other stakeholders with a financial interest in the company. However, financial metrics are only part of the puzzle to measure the brand experience.
“Very successful companies have to focus heavily on forward-looking indicators. I often jokingly say that in business we drive all cars with the entire windshield as a rearview mirror. And somewhere in this mirror surface we only have a small opening through which we can look forward. This is because we generally concentrate on the historical figures so that we can hardly see the future. None of our neighbors who are in their right mind would want to drive such a car, but we run huge companies with exactly this approach. That does not make sense! Risto Siilasmaa, President of Nokia
Financial indicators are retrospective
We all have to learn from the past, but those responsible for brand experiences cannot be guided by history alone. If sales have declined in the last quarter, there's nothing you can do about it now. You can scream, scream, kick and cry, but what happened happened.
This is in contrast to employee and brand metrics that are forward-looking or “leading”. If the number of customers willing to pay a 5% price premium decreased by 10% in the last quarter, this leads to a decline in sales in the subsequent sales cycles (all other factors are the same). If employee engagement declines, it is likely that it will have a negative impact on financial performance indicators later (all other factors are the same).
But it's not all bad news. This “delay effect” means that brand and employee action can act like a crystal ball for brand experiences, which can lead to preventive measures before financial performance suffers. For example, if a customer's willingness to pay a 5% premium shifts, you can change the setting before buying again. If employees are less committed, you may have the opportunity to do something before doing something that has financial implications, such as: B. the lack of interest in a customer request.
“It usually takes 12 (to) 18 months for brand value to really improve and improve sustainably. There is an improvement in most areas of the brand portfolio. And I think if the quarters continue, you will see even more benefits, which will then be reflected in a higher share of the value. We monitor this positive circle very, very carefully and make adjustments as we go on. & # 39; ~ Pepsi- CO CEO Indra Nooyi
Financial indicators are short-term
Even with advanced econometric models, it is difficult to predict performance (at best) beyond a few quarters. This view is in conflict with the strategic mentality required to build a brand experience. Building brands takes time. Providing experiences that bring these brands to life also takes time, as it is a cross-functional endeavor. This means that brand experiences are not a short-term game. So why measure with short-term metrics? However, as the influential study by Les Binet and Peter Field has shown, this has an adverse effect on the long-term build-up of brand value.
Financial measures tend to have an ROI focus
With a longer-term initiative such as building brand experiences, it is difficult to allocate the return on investment directly as with short-term activities such as sales promotion or an email marketing campaign. This is why short-term social campaigns are so popular. They have clear causes and effects. They also require less patience.
The longer time horizons for building brand experiences blur the line of sight. If you meet someone who can say that they can spend money on $ x brand experiences, you will get $ y sales. He is a braver person than I am.
Receive employee, brand and financial metrics
Instead of just focusing on financial metrics, when it comes to measuring brand experiences, it is better to get a holistic set of basics that the key members of your team have agreed on. This way, you can no doubt determine the benefits of your brand experience.
Measurements should include employee, brand, and financial metrics. Employee metrics can include employee engagement, advocacy, relative satisfaction, or well-being. Brand metrics can include awareness, relevance, or your ability to calculate pricing. Financial indicators include data such as sales or profit margins.
A holistic approach can be considered balanced because it includes:
- Hard (financial) and soft (brand / employee) key figures.
- Internal (employees) and external (brand and financial indicators).
- Short (financial) and long-term key figures (brand / employee).
Leading researchers advocate a more holistic and balanced approach to measuring brand performance. I always encourage customers to follow this approach because:
Employee metrics increase brand metrics and vice versa through brand value And your employer brand
“Customers don't come first. Employees come first. When you take care of your employees, they take care of your customers. Sir Richard Branson, founder of the Virgin Group
'When the employee comes first, he is happy … A motivated employee treats the customer well. The customer is happy and keeps coming back, which pleases the shareholders. Herb Kelleher, founder of South West Airlines
Employee indicators increase the financial indicators
Figure 1 shows an interesting picture of the impact that employees have on financial performance. Even the most heard, skeptical CFO would struggle not to care about these numbers.
Figure 1: Employee Engagement and Financial Performance, Towers Perrins (now Willis Towers Watson, 2009)
Brand metrics drive financial metrics
The relationships between employees, brands and financial indicators are differentiated and complex. The nature of the industry, the size of the company, and other factors determine financial performance. So when it comes to non-financial metrics, one size is not suitable for everyone. First, you need to identify a small number of key metrics relevant to your business, examine their relationship to key financial metrics, monitor, learn, and repeat if necessary.
However, the underlying principle is clear. If you want to understand how to improve financial performance, you need to start with carefully selected employee and brand metrics and focus your efforts there. As these improve, your financial metrics also improve. Conversely, if employee and / or brand metrics decrease, you have time to correct the situation before they have a negative impact on financial performance due to the “lag effect” associated with those metrics. The challenge is to identify the most important employee and brand levers for your market. This is where experience and external advice from managers come into play.
As part of a holistic approach to measuring brand experiences, it is also advisable to perform a series of balanced baseline measurements before you begin building brand experiences and then at set intervals. This way, you can undoubtedly demonstrate the value that your brand experiences offer. And when it comes to talking to the c-suite, that doesn't hurt.
Contribution to Branding Strategy Insider by: Dr. Darren Coleman, founder and managing consultant at Wavelength Marketing. Excerpt from his new book Building Brand Experiences © 2018 with permission from Kogan Page Ltd. Here you can download the first chapter of Building Brand Experiences for free.
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