How to Successfully Invest in Brand: Part 2
Establish an overall responsibility for the customer journey within the organization.
Adopt an holistic, incentivized, goal-oriented approach to monitoring customer satisfaction.
Measure the economic effectiveness of the whole customer journey, not just the touchpoints.
FROM START-UPS TO CORPORATIONS
Mike Emery of BRAND ECONOMIX offers brand investment thinking with an emphasis on creating brand equity and value.
In this Part 2 of 3, the focus is on ways of putting that thinking into practical use, including implementation and tracking return on investment (ROI) in Brand.
Needed: A new kind of organizational responsibility
Spending any money on Brand demands a measurable proof of return on investment (ROI), otherwise why bother? That’s why CEOs, CFOs and founders need to be involved to demand performance results.
And that’s especially comforting news even for some start-ups and early technology companies who tend to put Brand at the low point of their agenda, often misunderstanding how Brand can help to differentiate not only the perception of their offer but also how we do things.
Setting and reviewing goals
Many companies get into the habit of agreeing – or merely tweaking – what they approved for the marketing budget last year. The role of C-suite executives must force new initiatives, monitoring their impact and ROI throughout the year and joining in regular processes of hypothesizing new approaches to test and refine.
Management can improve their decision-making by demanding performance results – and then changing or re-thinking what doesn’t work for what does. Performance checks can kick-in often long before any misplaced spending has proved ineffective or even, sometimes, catastrophic.
Traditional marketing approaches have become suspect.
Methodologies like AIDA (Awareness, Interest, Desire and Action) and the Marketing Funnel often simply enable complacency, for everyone to tick outmoded boxes.
Awareness, for example, is always good but spending on increased market awareness doesn’t necessarily lead to more sales.
In today’s super-connected world, there are too many disruptions in the funnel from top to bottom to upset any linear, horizontal delivery of customers. Today’s brandmeisters need to be smarter.
Successfully investing in brand and creating value requires
– a cross-functional approach
– no hand-over of customer responsibility between touchpoints
If we refer again to the example in Part 1 where British Airways asked their business customers on route from London to New York about their flight-buying preferences; remember, they said Safety, Route and Schedule.
Since their employers were presumably picking-up the travel bill, note that Price is not mentioned.
And yet the real or hidden drivers to purchase – those which may not even be so apparent to the respondents themselves – can alter dramatically when it comes to deciding upon a final purchase if other attributes are thrown into the mix e.g. extra-wide seats, a quality meal, one or two stopovers for cheaper prices, double reward points, top entertainment, or perhaps a flat $30 fee to change the travel date?
In a real purchasing situation, customers rarely make a decision based upon a single attribute.
Unraveling the relative power of attributes is likely to change all the time.
Remember when free delivery was a delightful exception, not the rule?
Conjoint Analysis, a research technique, that examines trade-offs to determine the combination of attributes that will likely be the most satisfying to the consumer, is certainly helpful in unraveling what matters?
For example, although a customer might say Price is the determining factor, perhaps comfort, unsocial hours or stopovers – in whatever combination – may put Price down the decision list to make it almost an irrelevance.
Sometimes the customer really just wants to be delighted – which is why at BRAND ECONOMIX we tend to overlay attribute research with the Kano Model which turns attention to attributes that customers “must have” but also “excite”.
It’s also through such analysis and techniques that entirely new products and services can be identified and as well as establishing and refining new segments and sub-segments of potential purchase.
Touchpoints & the Customer Journey
When it comes to touchpoints – those points of delivery where customers come in contact and experience the brand – why don’t more companies calculate which touchpoints are most effective for their specific business?
Few brand owners truly measure touchpoint performance in terms of where money, time and energy are going to be spent.
Fewer still can demonstrate the link between touchpoint performance and business impact.
Choosing what to measure between touchpoints
If the process of deciding which touchpoints to measure was not already challenging, with so much disruption in marketplaces, what do we need to do to get a fix on what is happening to the customer between touchpoints?
That’s where plotting the customer journey from fixed touchpoint functions and top-down/bottom-up approaches also pays off.
For example, although touchpoint experience may have been satisfactory – even successful – at every stage of a potential buying process, what is the customer thinking between touchpoints that loses a sale or wins extra purchasing?
It’s often between touchpoints that differentiation can be uncovered that can make all the difference.
- Maybe a bank customer needs a friendly, personal call from a bank manager?
- Maybe the car hire firm needs to deliver the car to the customer rather than require the customer to start some tedious collection process?
- Maybe we all want to be thanked personally or rewarded for our brand loyalty on occasion?
What’s important organizationally is not to simply hand-off the responsibility for the customer journey onto the next department because what can really lose customers are often those unmanaged events between touchpoints.
In an example of a washing machine repair, it wasn’t that the Service Center wasn’t efficient – or the Engineer didn’t replace the defective part professionally – or that the call-out charge was ridiculously high.
Perhaps where we started uncoupling with the brand was that no one could tell us in advance precisely when, from 7.00AM to 1.00PM, someone needed to be around to answer the door.
Choosing what touchpoints to measure
In our rapidly changing business environments, the relative importance of touchpoints and channels of brand experience can also shift in importance, depending on the nature of the business, geographies, economic environment, cultures, competition and many other factors, some immediate, some longer term.
Although in large companies there may be a lot of touchpoints to consider e.g:
Exhibitions, seminars, articles, speeches, reports, webinars, website, podcasts, papers, networking, thought leadership, brochures, research, sponsorship, newsletters, email alerts, networking, blogs, point of sale, sales attitude, affiliates, CRM and customer service, awards, social responsibility, corporate movies, PR and advertising – as well as pricing, relationships, product/service quality.
the key is to benchmark a few and introduce a simple system of metrics that everyone can understand.
Metro Bank:Thinking different
Metro Bank is a start-up, aiming to be the first new bank in 100 years to challenge the dominance of UK’s top 4 banks.
Metro Bank is a deposit bank meaning that before they lend out cash to borrowers they must have an equal amount of cash reserves through current accounts and savings products.
This is reassuring to UK customers that have recent experience of a number of major banks being technically bankrupt or bailed-out with massive loans to meet their responsibilities.
Not all of their new touchpoint initiatives to delight customers work but still enough to attract some 200,000 customers and GBP600 million in deposits (see Case Study opposite).
Where CFOs can influence
Spending on Brand is quintessentially a strategic Board issue, not just a marketing issue.
C-suite executives need to appreciate, endorse and set the direction of the brand, to demonstrate that brand will be an ongoing priority and an integral part of business strategy.
CFOs may also want to introduce Economic Value Added (EVA) approaches to measure surplus value created on brand investment: to target investment in organic growth, to value a potential acquisition, and for evaluating possible disposals.
EVA helps provide an assessment of brand’s relative competitive strength over stretched timescales supports net cash flow projections as far as the competitive horizon
If the perception of brand is weak, one can easily lose customers and market share rapidly to a less-capable competitor but one that supports a much more attractive brand perception.
In Part 3, we take a look at how to pull all the issues and elements together.
Metro Bank’s focus is almost entirely based on pleasing customers.
Open 7 days a week, free coffee, dog-friendly and zero interest charges on overseas credit card purchasing, no charges on ATM withdrawal and lower interest charges on overdrafts.
They also give good rates to savers.
In blind-tasting, around 7 out of 10 people think Pepsi is a better drink than Coca Cola – but around 7 out of 10 people buy Coke.
So having a better product doesn’t necessarily translate into superior sales performance.
It must be something to do with Brand?