On previous posts, I talk at great length to explain to entrepreneurs what a brand is not — it’s not the images and other things that you pay money for in isolation (like a logo, a website or your tagline).
Your brand is about creating a perception in the marketplace. Given that, your job in creating a brand is to clearly articulate how you want to be perceived and what actions you need to take in order to achieve that intended perception.
However, how can you tell if your branding efforts have resulted in actions that can be measured in monetary terms? That is, profits on your bottom line.
LET’S REWIND A BIT. TO START WITH, WHY DO YOU WANT TO CREATE A BRAND?
Well, the answer must lie in the customer sales funnel. We will use a simple
“awareness -> consideration -> intention -> purchase” model.
Clearly, we cannot shape perceptions, drive engagement or motivate sales unless we can establish awareness of our brand. Consequently, awareness should be a key metric when it comes to establishing what is the return on investment of our brand activities.
To use brand awareness as an effective measure we need to be clear what we mean by it. A good place to begin to define brand awareness is to pose the question, “aware of what”?
For example: Should we be measuring awareness of just the company or brand name? And how should this be measured in terms of whether or not customers can recall your brand name unaided as a provider of goods and services in your industry (as is often the case when these things are measured) — or, is an aided recall enough? Should awareness of the brand include awareness of the brand promise that you are communicating? Or the key attributes or differentiators that are likely to influence purchase decisions?
Your answers to these questions will be influenced by your overall brand strategy and time frame for results.
The main challenge arising out of using awareness as a metric is we all know that brand awareness doesn’t necessarily equate to increased sales. Increased awareness without the benefit of it assisting the customer to reach the consideration stage or move on to purchase mode is unlikely to show any short-term ROI, although it may add value in the longer term. Brand awareness is rarely found to have a correlation to sales volume and is therefore not a good predictive indicator of future sales.
Another challenge for entrepreneurs in trying to measure their brand ROI is relying on mainly awareness as it can be very misleading.
So how can we improve on the awareness metric to ensure that we have a more robust measure of our brand’s ROI? One option is to include the next stage in the sales funnel “consideration”. The difference between awareness and consideration although slight is significant. If your target audience knows of your brand and what it offers, yet is not willing to consider your brand in their purchase decision, how effective is that awareness?
THE BENEFITS OF INCLUDING CONSIDERATION AS ONE OF THE MEASUREMENTS FOR YOUR BRAND ROI ALLOWS YOU TO:
- distinguish where marketing and advertising is effective or not in generating a good understanding of your brand.
- assess whether your target audience sees your brand as a good fit for the solution.
- assess whether competitive brands have perceived or real advantages that keep your brand from being considered or preferred by the target audience.
- assess if the target audience is aware of your brand and their awareness is more negative than positive.
- assess if the target audience are actually educated buyers or unaware of the need for your brand solution.
If you limit your brand assessment to awareness it is unlikely that the issues raised in the above list will be addressed.
While brand awareness is not recommended as a primary metric, it still provides insights that can unlock value and drive ROI when used correctly. Monitoring both awareness and consideration means that you can identify barriers and leakage points in your customer sales funnel. Having identified these you are in a better position to both reduce and eliminate them.
The value of a brand’s awareness is like having a check for $1 million, which isn’t signed. It has zero value. Brand awareness does not have a financial value of its own, hence simply equating your ROI to the awareness statistic will give you at best a misleading picture and at worst could be wasting your hard earned cash.
YOUR ROI IS THE SUM OF THE COLLECTIVE EFFORTS NECESSARY TO DRIVE SALES. USING THE RIGHT METRICS TO MEASURE IT WILL ENSURE THAT YOU ARE ALWAYS MAKING THE RIGHT TACTICAL DECISIONS TO GUIDE YOUR MARKETING STRATEGY AND AMPLIFY YOUR BRAND.