Marketing KPIs and What Modern Brands Do Differently
No brand can go without key data about how it’s performing. Modern brands leverage a variety of KPIs that allow them to best understand and improve upon their performance. With data-driven marketing now standard, and AI, big data and other methodologies affect both the supply and demand sides of every organization, brands need to have a holistic understanding of how flexible their KPIs can be toward a given goal.
Specifically, there are some classic measures that should respected as absolutely critical. Without measures like brand awareness and sales growth, brands can’t know their real prospects for the future. Yet, you can’t consider using a measurement without understanding its value and what you can do to improve it. That’s why marketing KPIs like brand awareness, sales growth, customer acquisition cost, lifetime value and engagement are essential to driving the financial (and even cultural) success of a brand.
Some brands typify recognition. Apple, Ford, Sony and Coca Cola all have logos that are recognized by more than 98% of the world’s population. There is simply no place on earth that a brand can’t access, and with the prevalence of the internet, there are fewer and fewer places where that access can’t be instant as well.
In light of this, brands need to consider the depth and value of their awareness. Of course it helps to be known, but are you known, loved, adorned and can’t be done without? If consumers are in love with you, how deep is their love? Do they love your product, what it offers and how your brand appeals to their values and lifestyle, or do they just not care when you open your mouth because you do it so much?
With brand awareness, an artful touch is required, and many brands assume more delicacy in their efforts by launching marquis or seasonal campaigns that seek to, at every stage, develop a deeper relationship with a broad base of consumers. But apps and everyday engagements are increasingly critical to consumer expectations of a brand.
Mcdonald’s and Starbucks, among others, both have mobile ordering. Apple deploys chatbots to sell AirPods. Ford has increased the connectedness of its vehicles, emphasizing that more than any other feature. Sony developed a “One Sony” global strategy to unify their customer experience across various lines of business. Coca Cola is leveraging digital content and ecommerce strategies to maintain visibility in key areas online. Brand Awareness is the most classic of marketing KPIs, but leveraging it to drive engagement or create use-cases that bring brands closer to consumers is the goal of all that maintenance and measurement.
In every case these companies are looking to create more transactions by making the transactions better, and increasing the quality of a customer experiences is instrumental to improving brand awareness in a meaningful way. “Salience” measures are another way for brands to definitively evaluate whether their advertising has cut through the noise, but with immediacy playing a significant role in consumer expectations, brands also need to be mindful to awareness methodologies that enhance the speed with which they respond to consumers.
Growth is essential for a brand to understand whether it’s getting ahead or falling behind. Sales growth for major brands needs to be taken in perspective with the competition. There are always shifts in consumer sentiment and overall demand. Macroeconomic forces can drive much of the consumption seen by leading brands, who bear the brunt of slow-downs on a broad basis, while insurgent brands can drive greater consumption when times are good.
With this in mind, brands need to look at their peers and understand the unique selling points that are driving the most success with consumers. In recent years, for instance, Unilever’s “Sustainable Living” brands like Hellman’s, Dove and Ben & Jerry’s deliver more than 60% of their growth, and grew 50% faster than the rest of Unilever’s businesses.
In China, brands are going premium and local, digitizing every aspect of their business and simplifying choices for consumers, even by limiting their selection of productions. These brands take up 20% of value growth despite only claiming 6% of the overall market. These trends are true worldwide – Boston Consulting Group reports that the fastest-growing CPG companies are more likely to use data-driven approaches to segment consumers, target offerings and achieve real-time responsiveness to consumer demand.
Brands already in these spaces are leading the way in growth by enhancing growth and responsiveness, while Danone and other holding companies are filling in “white space” in their portfolios explicitly according to the latest emerging consumer demands. The organic growth that is then established by these actions is supplemented by media strategies and M&A activity that consolidate premium offerings. These brands then take that advantage and multiply it, entering new markets “from the top” to engage the needs of affluent and precocious consumers first before scaling to the masses.
Customer Acquisition Cost and Lifetime Value as Marketing KPIs
Customer acquisition cost is crucial to manage, but it has to be managed with a view for lifetime value. Without that in place, brands can grow fearful of the real costs of their efforts, and could unfortunately cut off their acquisition efforts without allowing the real value to emerge.
However, you can’t raise awareness without trying to make the most of it through a clear value proposition and deepening engagement with your customer base. Otherwise, the awareness you create only makes it easier for similar, cheaper and more responsive competitors to win out.
Comprehensive data is needed to understand how lifetime value is determined. The profit you gain from a loyal customer always comes on the back of years of acquisition costs. The risks of underestimating your lifetime value are far worse than the risks of overestimating it, except for the cases where arrogance simply takes the place of overestimation (the Uber IPO debacle may be showing an overestimation of lifetime value, but it’s also too soon to tell).
These marketing KPIs, taken together, offer a “pick your poison” scenario. Leaders who embrace risk are always willing to press on with greater Customer Acquisition Costs in the hopes of accruing greater than expected Lifetime Value, but there is always a happy medium to be found
Fundamentally, investing in relationships and experience are also what drives more relative value and lifetime profitability for a brand. Brands that create a feeling of responsiveness, loyalty programs and personal touches with their consumers develop stronger relationships and ultimately earn more compared to competitors. Brands that invest in experience can see up to 60% increases in customer lifetime value by emphasizing experience, notching improvements everywhere from greater return on ad spend to higher average order value and greater customer retention.
Engagement among Marketing KPIs
Awareness, sales growth, acquisition cost and lifetime value are all critical marketing KPIs, and the trends are aligning in multifaceted ways to show that engagement is the next point of emphasis brands can use to maximize returns. Your engagement with consumers can actually be measured with real minutes across the entire customer relationship. The conversations brands have with both audiences and individual consumers empower them to lead with more information and value than brands who rely on one-way messaging.
When brands offer guidance, recommendations and personalized responses, they simultaneously enhance their customer experience and offer a new marketing KPI that can serve as a leading indicator for the quality of awareness, growth and relative profitability that they get.
Forrester identifies experience-driven brands as those who exhibit customer-centric organizational structures and cultures, advanced digital capabilities and rigorous data-driven processes. These are all compelling features, but when it comes to engaging at scale, Conversational AI is one of the key ways that experience-driven brands can synthesize all three of these traits, in creating immediacy, responsiveness and garnering rich first-party data.
This not only creates a new category of interactions that can assist consumers wherever they go, but also offers a new, immediate window into customer needs and expectations that compresses time and empowers brands to message their consumers in ever-more relevant ways.
To generate more of the engagement that leads to insight and revenue, contact Automat to learn more about Conversational AI solutions