The best marketers must be able to see creativity and marketing math at the same time. And I’m not talking about likes, views, or clicks. I’m talking about the marketing math that links 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.
Marketers must sort through the strategic possibilities to narrow in on choices with the most significant market impact. A smart strategy turns an early breakthrough win into a shift in momentum, positional power, or tipping point. And you begin to achieve more in the marketplace than the resources you put in.
Many marketers underestimate the need for an early win
The breakthrough point sees a slight shift in momentum toward your vision. The results of the early win provide compelling proof to show everyone the plan will work. You can change the doubters’ minds so everyone can stay focused on the breakthrough point.
The magic of strategy happens through leverage. You use the early win as an opening or a tipping point where you start to see a transformational power. This 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. You can move them from awareness to buying and onto loyalty. And it can help tighten the consumer’s bond with the brand.
The Marketing Math - Table of Contents
Marketing math you need to know
See the marketing math that gives your brand a pathway to success
A brand funnel analysis is the best way to measure the market impact. It provides clues to the circumstances for your next decisions.
A classic brand funnel would measure awareness, familiarity, consideration, 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. It outlines how consumers build a bond with a brand. Brands 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.
Consumers form a tighter bond with the brand as they move along their journey. I created the brand love curve to show the differences in how consumers feel about a brand as they move through five stages. 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. And, for indifferent brands, the strategy must establish the brand in the consumer’s mind so they can see a clear point of difference. Next, at the like it stage, the strategy separates the brand from the pack, creating happy experiences that build a trusted following.
Then, as your brand reaches the love it stage, the focus shifts to tugging at heartstrings to tighten the bond with the most loyal brand fans. Finally, at the beloved brand stage, the strategic challenge is creating outspoken, loyal brand fans willing to whisper to their friends on the brand’s behalf.
Brand funnel analysis
Every brand should understand the details of its marketing funnel, the best tool for measuring your brand’s underlying health. This is where the marketing math comes alive. It is the equivalent of 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 do 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: First, on the chart above, the first thing to do is look at the absolute brand funnel scores. You can do many types of comparisons, whether you compare to last year, competitors, or category norms. Then look at the brand funnel ratios, 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, divide the familiar score of 87% by the awareness score of 93% to determine a conversion ratio of 94%. This means 94% of aware consumers are familiar
- B: Next, for the second chart above, lay out the absolute scores and ratios horizontally 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 94%, 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 -4% ratio gap (94% – 98%), which means Devon’s does a 7% better job in converting consumers from awareness to familiarity than Gray’s Cookies. More marketing math, but you can see the story coming to life.
- D: Moreover, as you create ratio gaps along the bottom, you can see where your ratio is 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 of the funnel, but Gray’s shows real weakness (-23% and -51% gap) as it moves to repeat and loyalty. You need to address and fix these gaps in your brand plan.
Marketing analytics
Matching up your data to the brand love curve
Indifferent brands have very skinny brand funnels with low awareness, low purchases 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, the beloved brands had the most robust brand funnels, with strong awareness, purchase, repeat, and loyalty scores.
Brand Profit
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. The marketing math also relates to 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 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 will trade up to the next best model. A well-run beloved brand can use its 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 costs to be on the roster of the beloved brand. The beloved brand will operate with much more efficient marketing spend, using its power with the media to generate lower rates with plenty of free media. The higher sales volumes make the beloved brand’s spending 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 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.
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Business Review
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. Regarding 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 focused on price, cost, market size, or market share?
Use our Business Review template, designed by an ex-VP Marketing.
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b2b brands
the b2b playbook for how to create a brand your customers will love
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