As we execute, we must be able to see the marketing math, and how it links back to the market impact and the performance result. There is marketing math connected to the strategy and the execution. Challenge yourself to see the math pathway to your brand’s success.
As marketers must sort through the strategic possibilities, the best marketers are able to narrow in on choices that will have the most significant market impact. A smart strategy turns an early breakthrough win into a shift in momentum, positional power, or tipping point where you begin to achieve more in the marketplace than the resources you put in.
Many underestimate the need for an early win. I see this as a crucial breakthrough point where you start to look at a small shift in momentum towards your vision. While there will always be doubters to every strategy, the results of the early win provide compelling proof to show everyone the plan will work. You can change the minds of the doubters—or at least keep them quiet—so everyone can stay focused on the breakthrough point.
The magic of strategy happens through leverage, where you can use the early win as an opening or a tipping point where you start to see a transformational power that allows you to make an impact and achieve results in the marketplace. A smart strategy should trigger the consumer to move along the buying journey from awareness to buy and onto loyalty, and it can help tighten the consumer’s bond with the brand.
See the marketing math giving your brand a pathway to success
The best way to measure the market impact is to use a brand funnel analysis, which also provides clues to the circumstances for your next decisions.
A classic brand funnel would measure awareness, familiar, consider, purchase, repeat and loyal. They tell you where your brand is now, and when analyzed with intelligence, brand funnels can provide hints as to where you can go next. The brand funnel analysis can help you determine where your brand sits on the brand love curve, which outlines how consumers build a bond with a brand, as they move through five stages: unknown, indifferent, like it, love it, and onto the beloved brand status. Our brand love curve sets up the brand strategy of where to go next.
As consumers move along their journey, they form a tighter bond with the brand. To show the differences in how consumers feel about a brand as they move through five stages, I created the brand love curve. It defines consumers’ feelings as unknown, indifferent, like it, love it and onto the beloved brand status.
For unknown brands, the strategic focus should be to stand out so consumers will notice the brand within a crowded brand world. For indifferent brands, the strategy must establish the brand in the consumer’s mind so they can see a clear point of difference. At the like it stage, the strategy is to separate the brand from the pack, creating happy experiences that build a trusted following. At the love it stage, the focus shifts to tugging at heartstrings to tighten the bond with the most loyal brand fans. At the beloved brand stage, the strategic challenge is to create outspoken, loyal brand fans who are willing to whisper to their friends on the brand’s behalf.
Brand funnel analysis
Every brand should understand the details of its brand funnel, the best tool for measuring your brand’s underlying health. It is the equivalent to knowing your blood pressure or cholesterol scores. A classic brand funnel should measure awareness, familiarity, consideration, purchase, repeat, and loyalty. At the very least, you should measure awareness, purchase, and repeat. It is not just about understanding the absolute scores on the funnel but rather the ratios that explain how good of a job you are doing in moving consumers from one stage of the funnel to the next.
I will show you how the robustness of your brand’s funnel explains where your brand sits on the brand love curve. The broader the funnel, the better connected your brand is with consumers.
Brand funnel analysis using absolute scores
- A: On the chart above, the first thing to do is look at the absolute brand funnel scores. There are many types of comparisons you can do, whether you compare to last year, competitors, or category norms. Then look at the brand funnel ratios, which is the percentage score for how well your brand can convert consumers from one stage of the funnel to the next. To create ratios, divide the absolute score by the score above it on the funnel. In the example above, take the familiar score of 87% and divide it by the awareness score of 93% to determine a conversion ratio of 91%. This means 91% of aware consumers are familiar
- B: For the second chart above, lay out the absolute scores and the ratios in a horizontal way to allow a comparison. You will notice these are the same scores as “A” and “B” in the previous chart. The crucial numbers for Gray’s Cookies are the ratios of 91%, 94%, 77%, 25%, and 12% at the top of the chart. Then bring in a close competitor (Devon’s) with their absolute and ratios scores to allow a direct comparison.
Brand funnel analysis using ratios
- C: Then find the ratio gaps by subtracting the competitor’s ratio scores from your brand’s ratio scores. In the example, the first ratio gap is -7% ratio gap (91% – 98%) which means Devon’s does a 7% better job in converting consumers from awareness to familiar than Gray’s Cookies.
- D: As you create ratio gaps along the bottom, you can see where your ratio is either stronger or weaker than the comparison brand.
- E: Finally, start analyzing the significant gaps between the two brands and tell a strategic story to explain each gap. Looking at the example, you can see Gray’s and Devon’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. You need to address and fix these gaps with your brand plan.
Matching up your data to the brand love curve
Indifferent brands have very skinny brand funnels with low awareness, low purchase and negligible repeat and loyalty. Brands that are liked but not loved, have high awareness and sales, without an emotional connection, they almost have no loyalty. And finally, at the beloved brands had the most robust brand funnels, with strong awareness, purchase, repeat and loyalty scores.
See the performance result through profitability analysis
With all the love and power the beloved brand generates, it becomes easy to translate that stored power into sales growth, profit, and market valuation. Here are the eight ways a brand can drive profits:
- Premium pricing
- Trading up on price
- Lower cost of goods
- Lower sales and marketing costs
- Stealing competitive users
- Getting loyal users to use more
- Entering new markets
- Finding new uses for the brand.
Beloved brands can use higher prices and lower costs to drive higher margins
Most beloved brands can use their loyal brand lovers to command a premium price, creating a relatively inelastic price. The weakened channel customers cave in during negotiations to give the brand richer margins. Satisfied and loyal consumers are willing to trade up to the next best model. A well-run beloved brand can use their high volume to drive efficiency, helping to achieve a lower cost of goods structure.
Not only can beloved brands use their growth to drive economies of scale, but suppliers will cut their cost to be on the roster of the beloved brand. The beloved brand will operate with much more efficient marketing spend, using their power with the media to generate lower rates with plenty of free media. Plus, the higher sales volumes make the beloved brand’s spend ratios much more efficient. The consumer response to the marketing execution is much more efficient, giving the brand a higher return on investment.
Beloved brands use higher shares of a bigger market to drive higher volume
The beloved brands use their momentum to reach a tipping point of support to drive higher market shares. They can get loyal users to use more, as consumers build the beloved brand into life’s routines and daily rituals.
It is easier for the beloved brands to enter new categories, knowing their loyal consumers will follow. Finally, there are more opportunities for the beloved brand to find more uses to increase the number of ways the beloved brand can fit into the consumer’s life.
Visualize the numbers beneath your creativity
As you engage with the creativity of your marketing execution that delivers your strategy, I want to challenge you to see the marketing math. In terms of market impact, what element of the brand funnel will the creative solutions help to solve, whether you are focused on awareness, search, purchase, repeat, loyal or becoming a brand fan? When you think of the performance result, which of the eight ways to add more profit will your creativity solve, whether you are focused on price, cost, market size or market share?
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