You owe your brand a deep dive business review at least once a year. Otherwise, you are being negligent to your brand and will operate on the surface level, missing what’s going on beneath the surface. To start the deep-dive Business Review, dig in on these 5 sections: Marketplace, Consumers, Channels, Competitors and Brand.
- Marketplace: Start by looking at the overall category performance to gain a macro view of all major issues. Dig in on the factors impacting category growth, including economic indicators, consumer behavior, technology changes, shopper trends or political regulations. Also look at what is happening in related categories that could impact your own category or replicate what you may see next.
- Consumer: Define your consumer target, knowing the consumer’s underlying beliefs, buying habits, growth trends and key insights. Use the brand funnel analysis and leaky bucket analysis to uncover how they shop the category and how they make purchase decisions. Uncover consumer perceptions through tracking data or market research.
- Channels: Look at the performance of all potential distribution channels and every major retail customer. Understand their strategies, as well as their available tools and programs. To be successful, your brand must align with the customer strategies.
- Competitors: Dissect your closest competitors by looking at their performance indicators, brand positioning, innovation pipeline, pricing strategies, distribution and the perceptions of consumers. Map out a strategic Brand Plan for major competitors to predict what they might do next. Use that knowledge within your brand’s own plan.
- Brand: Understand the view of the brand through the lens of consumers, customers, and employees. Use brand funnel data, market research, marketing program tracking results, pricing analysis, distribution gaps and financial analysis. You need to manage your brand’s health and wealth.
Dig in on the overall category to assess the macro factors and trends impacting your brand. These factors include political, economic, social and technology trends impacting the category. Look at related categories, because the trends they see today could impact your brand in the near future.
First, look at both category sales dollars and sales units to see if you spot any major trends happening. Explain the underlying causes of the major variances you see. In the example, there are wide fluctuations with annual gains of +19% to -13.5%. You may even need to look at the 5 or 10-year trend line to see if this is consistent over time. Next, look at the trend line on category price, and compare with inflation rates of the region you compete in. In the example, the price swings are not as dramatic as volume swings. Summarize the factors driving regional growth and factors holding the category back.
Look at the regional performance. Start by understanding the relative size of each region and the relative growth rates of those regions. There are two ways to look at the importance and strength of a region for your brand. First, look at your share in the region relative to your national business, or use a development index relative to either overall population or a bigger category the brand plays within. Just as you did at the macro level of the category, summarize the major drivers you are seeing for each region and summarize your own brand performance within each region. This will help decide on the regional activity that either continues to drive growth or close gaps that might exist.
There are many other aspects of the category you should be looking at, including product formats (size, flavors etc), distribution channels, benefit segments or competitors.
Use a PEST analysis that looks at the macro trends impacting the category through political, economic, social and technology trends.
- Political: Look at changes in regulatory, tax code, trade restrictions, or political climate that could restrict or enhance your business. Could be local, national or international.
- Economic factors such as employment, inflation, exchange rates. Understand how your brand reacts to key economic factors including price elasticity. Keep pace with inflation as retailers generally resist price increases outside those windows.
- Social trends include demographics, consumer mindset changes, use of media or behavioral changes.
- New technology advancements in the category, new molecules, formats, and deliveries. New media (Facebook) and new distribution points (Amazon).
The next area to look into is the consumer. Start by defining the space you play in, defining which consumers you are serving and who you are not serving. With the defined target market, look at buying habits, growth trends, key insights. Gain knowledge by mapping out the brand funnel analysis, leaky bucket and consumer perceptions gained through tracking research. Use some type of panel/scan data if available or compile your own data through tracking studies. This helps determine what’s going on with consumer behavior beneath the surface. I am a fan of brand funnel tools as they map out how well your brand is doing at each stage on the consumer’s path to purchase.
How to use consumer tracking data
From the tracking or household panel data (Nielsen or IRI), you have to understand how your brand is doing on both penetration and the buying rate, in order to fill in the simple equation of Sales = (Total Population x Penetration rate) x Buying Rate.
- Penetration Percentage: Percent of households who purchased a product, shopped in a certain channel or retailer at least once during a measured period.
- Buying rate or sales per buyer: Total amount of product purchased by the average buying household over an entire analysis period, expressed in dollars, units or equivalent volume.
- Purchase frequency or trips per buyer: Number of times the average buying household purchases your product over a time period (usually a year). Purchase Frequency remains the same regardless of which sales measure is used (dollars, units or Equivalent volume)
- Purchase size or sales per trip: Average amount of product purchased on a single shopping trip by your average buyer. Like the buying rate, purchase size can be calculated in dollars, units or equivalent volume.
How to analyze your brand using Brand Funnels
Every brand should understand the details of their Brand Funnel, knowing what is causing any strength, weakness, changes versus last year or gaps versus competitors. A classic brand funnel should measure awareness, familiar, consider, purchase, repeat and loyal. At the very least, you should be measuring awareness, purchase, and repeat. It is not just about driving particular numbers on the funnel but moving consumers from one stage of the funnel to the next.
The first thing to do is look at the absolute brand funnel scores (A), comparing them to last year, to competitors or versus category norms. Then look at the brand funnel ratios (B), finding the percent your brand is able to convert from one stage of the funnel to the next. To create the ratios, divide the absolute number by the number above it on the funnel. In the example, take the familiar score of 87% and divide it by the awareness score of 93% to determine the conversion ratio of 91%. That means 91% of those who are aware become familiar.
The brand funnel becomes more powerful when you start looking at the ratios. The first thing to do is lay out the ratios scores (C) of your brand versus your nearest competitor. Then, find ratio gaps (D) by subtracting the competitor’s ratio scores from your brand’s ratio scores. In the example, the first ratio moving from aware to familiar would create a -7% ratio gap (91% – 97%) which means your brand trails your competitor by 7%. You will start to see where your ratio will either be stronger or weaker than the comparison brand. Finally, you should start analyzing the difference (E) between the two brands and tell a strategic story to explain each gap. Looking at the example, you can see Gray’s and Dad’s have similar scores at the top part of the funnel, but Gray’s starts to show real weakness (-23% and -51% gap) as it moves to repeat and loyalty. This creates a gap you need to fix your Brand Plan.
The brand funnel data explains where your brand sits on the Brand Love Curve. Indifferent brands have skinny funnels throughout. Your plan for indifferent brands should fuel awareness and consideration to kick-start the funnel. For Like It brands, the brand funnels are solid at the top but quickly narrow at the purchase stage. These brands need tools to close potential leaks and trigger consumers at the purchase moment. Love It stage brands have a fairly robust funnel, but may have a smaller leak at loyal. The plan should continue to feed the love and turn repeat into a routine. The most beloved brands have robust brand funnels. These brands should continuously track their funnel and attack weakness before exploited by competitors.
You must understand the retail channels and major customers you sell through. You want to look for potential gaps to take advantage of, whether that includes market share performance, store listings, shelf presence or merchandising. To find gaps, I use a ‘fair share index’ which takes any measurement share and divides it into your overall market share. For instance, if you were getting 30% of display, yet your market share is 40%, your fair share index would be 0.75 (30% divided by 40%). You should be pushing your customer to get your share of display up to 40%, which would then fuel further growth. Wherever your fair share index is below 1.0 represents an opportunity for the brand.
Start at the macro level looking at your brand’s performance in each of the channels, looking at fair share index for market share and distribution percents to determine where you might dig next.
To drill down to the next level, create customer scorecards for your biggest customers, looking at sales dollars and related growth rates, then look at your brand’s share at the customer and your brand’s average price. Next, look at how well your brand is utilizing the customer’s tools, such as pricing ads or displays. You can use fair share index to quickly identify the gap areas, helping draw conclusions by comparing how you are doing in each channel, each customer and compared to prior periods.
Use a distribution gap analysis to determine where your brand has a presence on the shelf. You can look at this by channel or specific customers, then look at it for the overall brand or go right down to the sku level. This analysis sets up clear opportunities to find growth. It may take a head office sales call to gain listings or utilizing a direct-to-store salesforce to ensure shelf presence.
Then looking at each customer, you can lay out issues, opportunities, and risks. Work with the sales team to determine where your brand can have the biggest impact.
Brands who think they ‘don’t have a competitor’ are naive. Even blue ocean brands will have copycat brands join in the near future, including a severe competitive reaction from those brands who your brand stole money away from.
Assess your competitor’s brand positioning to understand how well they are meeting the needs of consumers. Who is their target, their main benefit and their reasons to believe? Do they have a Big Idea and how consistently do they deliver that Big Idea? Where are there gaps?
Start by plotting out your competitor’s market share over the past 5-10 years with explanations of the ups and downs whether new launches, economic impact, distribution changes investment changes or impact from competitors. Use any of the tools I have shown you to dissect your closest competitors looking at positioning, innovation pipeline, pricing, distribution differences, consumer perception and brand strategies. When in a real competitive battle, complete your competitor’s brand plan, laying out the vision, analysis, strategies, tactics and even assumed budget levels. By getting in the shoes of your competitor, it will help you better understand their mindset, what moves they might make and how they might attack you in the future. This will help you build a counter-attack in your own Brand Plan.
You need to get a complete view of your brand through the lens of consumers, customers, and employees. Use brand funnel data, market research, marketing program tracking results, pricing analysis, distribution gaps and financial analysis. You can also use program tracking (Advertising Tracking) to show how well you are doing behind key marketing activities. You should also look at awareness (aided, unaided), purchase scores (share of last 5 purchases), uniqueness and purchase intention.
Start by looking at your brand’s power
For your brand to determine “where are we?” you need to assess the brand’s health and power which are leading indicators of your brand’s wealth. While the wealth measures can be seen easily, the deep-dive review helps uncover the brand power measures that you cannot easily see. To see the external brand power, look at how well the bond with consumers becomes a source of power. Use the brand funnel to measure how your consumer sees your brand, looking at awareness, trial, repeat, and loyalty. Build on your strengths and attack your weaknesses before others do. The internal brand power looks at the company’s culture and how every individual can positively impact the consumers bond with the brand. Is there an internal beacon that guides all employees to understand and deliver the brand promise? How much has been communicated about the strategy? Has the Big Idea been embedded right into the culture that supports the brand? The more loved a brand is by consumers, the more powerful and profitable that brand will be
The Brand Love Curve
To determine where your brand sits on the Brand Love Curve, you can look at both voice of the consumer and market indicators such as the brand funnel, market share, net promoter scores and financial performance.
The Leaky Bucket Analysis
I created the Leaky Bucket Analysis tool as a way to find problems for the brand. While the brand funnel analysis usually looks at how to move from one stage to another, the Leaky Bucket looks at why consumers fall out of the brand funnel. I have taken the 4 stages of the Brand Love Curve and created 8 total stages looking at unaware, noticed, interested, bought, satisfied, repeater, fan and outspoken. Then for each stage, map out how the consumer sees the brand and the biggest reason consumers reject the brand. This allows you to find the biggest leaks and build plans for closing those leaks.
Building the deep-dive Review
How to build the ideal analytical slide
When building your presentation for your management team, start every slide of your story with an analytical conclusion as your headline, then have 2-3 key analytical points of support for the conclusion with a supporting visual or graphs. And finally, you must include an impact recommendation on every slide. You should never tell your management team facts without attaching your conclusion of what to do with that data.
How to build each of the 5 analytical sections of the Business Review
For each of the 5 deep-dive sections (category, consumer, competitors, channels, and brand), brainstorm a list of potential issues you are seeing based on what you might be hearing or seeing and what your instincts are telling you. Draw hypothetical conclusions to narrow the brainstorm list down to top 3-5 opinions that become your ‘straw-dog conclusion statements’. These statements guide you in digging into the data to support, alter or even refute your original hypothetical statement. Look for breaks in the data and begin piecing together 2-3 of the most important support points and layer in the supporting visual charts. This type of analysis is an iterative process where you have to keep modifying the conclusion statements and support points to tighten the story.
Building each of the 5 sections.
For each of the 5 sections, map out 3-5 slides, using this ideal slide above. Then take each conclusion statement at the top of your slide and move them to a summary slide for each section, and draw one big summary statement for each of the 5 sections.
Then take the summary statement for each of the 5 sections and move it to an overall summary document. This gives you the opportunity to write a major brand challenge that sums up the entire deep-dive business review. You can now put this together into a 15-20 page slide presentation.
Dig in deep to find the true issues that linger beneath the surface of your brand.
Here is our workshop on leading a deep dive business review including good analytical principles, assessing health and wealth of the brand, turning facts into insight, helping to set up strategic choices and turning the analytics into projections and analytical stories.
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