A Brand Health Tracker is a methodology used by brands to assess the overall health and performance of their brand, typically relative to key competitors. The cadence of a Brand Health Tracker survey is usually once a year or more frequently, depending on the needs of the brand. While Brand Health Trackers measure many things such as consumer wants and needs, brand usage, purchase behaviors, purchase occasions, categories purchased, usage occasions by category, channels used, social media usage, and demographics, one of the most important things they measure and track are Key Performance Indicators (KPIs) that are used to monitor brand health over time. KPIs inform strategic decision-making and help identify opportunities for brand improvement.
The KPIs used in a Brand Health Tracker should be tied to the objectives and goals of the brand in the near, middle, and long-term future. They should also relate to the brand’s stage of growth as well as the industry in which the brand operates. How the KPIs will be used by the company should also be considered. KPIs must be actionable so that the brand can institute corrective action as required.
This paper outlines some of the KPIs that could be measured by a brand along with the reasons why each KPI would be measured. Most of the KPIs outlined here would be measured by the Brand Health Tracker Survey; however, there are other KPIs that would be developed in conjunction with this survey that would be measured by the brand internally such as revenue growth and profit margin.
It’s All Relative
Regardless of which KPIs you use in your Brand Health Tracker, it is strongly recommended that they not be used for the brand in isolation. Understanding a brand’s performance relative to key competitors is critical to a full understanding of a brand’s position in the marketplace.
Customer Disposition Groups
Most brands aim to gain a better understanding of their target audience. By utilizing Customer Disposition groups, brands can gain a detailed understanding of their target market by identifying the percentages of current customers, potential customers who are considering the brand at the time of purchase, individuals who hold neutral opinions about the brand, those who are unaware of the brand, and people who reject the brand. This information is crucial as it informs the brand’s marketing strategy by highlighting areas that require attention, such as awareness, increasing the customer base, or addressing the reasons why potential customers are not purchasing from the brand.
Brand Strength Metrics
Brand Strength Metrics such as loyalty, desire, and interest can provide valuable insights into the health of a brand and its performance relative to key competitors. Often a composite score, brand loyalty is used to assess the strength of commitment to a brand by users/customers. Desire, also a composite score, provides a measure of how well your brand is capturing the attention and interest of the target audience that is not buying from your brand yet but is considering your brand. A third composite score, interest, is used for consumers who are aware of your brand but have not yet thought about buying from the brand. By measuring Brand Strength Metrics over time, brands can identify what is working, where there is room for improvement, and take strategic action to enhance brand health and market position.
Purchase Funnel
The Purchase Funnel represents the customer journey from awareness to purchase. At a minimum, it would include awareness, familiarity, consideration, and purchase. Sometimes it also includes loyalty. This would be used as a KPI when a brand wants to measure and track the effectiveness of marketing and sales efforts and/or benchmark themselves against key competitors. The Purchase Funnel is an effective way to identify strengths and bottlenecks or areas for corrective action which helps the brands in moving customers through their purchase journey with the brand. For example, a brand may be brilliant at generating brand awareness, but have a steep drop in familiarity. If the brand does not move prospective customers from awareness to familiarity, they will not be able to generate consideration and purchase.
Brand Diagnostic Scorecard
A Brand Diagnostic Scorecard and the Purchase Funnel are both ways to measure a brand’s performance relative to key competitors, but they differ in several ways. A Brand Diagnostic Scorecard measures various aspects of a brand’s performance including awareness, familiarity, consideration, perception, engagement, purchase, and advocacy. It provides a comprehensive overview of the brand’s performance vis-à-vis the competition on all these measures individually as well as an aggregate score at overall brand level. The Purchase Funnel, by contrast, describes the different stages a customer goes through before making a purchase, and identifies at what stage the brand is losing customers. Comparing your brand’s purchase funnel performance with competition allows you to understand which brands are your true key competitors, and a further detailed analysis can help brands identify areas where corrective action can be taken to effectively move ahead of competition.
Retention and Acquisition
There are a number of potential KPIs associated with customer retention and acquisition. Measures associated with retention include customer retention rate, repeat purchase rate, and customer lifetime value. These measures provide a window into how well a brand is retaining their existing customer base. In general, it is less expensive to retain a customer than to acquire a new one. Measures associated with acquisition include new customer acquisition rate, conversion of leads to customers, and customer acquisition cost. These measures provide insight into how successful a brand is at acquiring new customers. Analysis of customer retention and acquisition allows your brand to identify areas of further growth.
Gain-Loss Analysis
A gain-loss analysis helps brands identify changes in market share. It includes customers retained by the brand, gained from competitors, and lost to competitors. A gain-loss analysis helps brands understand perception about them, changes in customer behavior, and benchmark them against the key competitors. It is a useful KPI as it provides a comprehensive view of a brand’s performance in the market.
Net Promoter Score
The Net Promoter Score (NPS) is a simple and reliable way to measure brand loyalty. It can be useful as a KPI to measure brand loyalty, track changes in brand perception over time, benchmark against key competitors, and identify areas for improvement.
Advertising Funnel
The Advertising Funnel is a framework that represents the stages of awareness and engagement in advertising efforts. This typically includes brand awareness, advertising awareness, and campaign awareness. This is used as a KPI to identify the performance of different advertising channels, formats, or campaigns. By measuring the Advertising Funnel over time, it is possible to track changes in awareness, engagement, and recall, and assess the impact of the advertising on brand health over time. When considering use of the Advertising Funnel as a KPI, brands should consider how they are using advertising. For example, are they building brand awareness, selling specific products, positively influencing how a brand is perceived, etc. as this may influence use of the Advertising Funnel and associated questions.
Customized KPIs
Depending on brand goals, and objectives, customized KPIs can be developed. There are many industry-specific (e.g. patient satisfaction, or non-profit donor retention and acquisition rates) and general examples (e.g. customer lifetime value, total addressable market, customer spend, compound annual growth rate (CAGR)). The key to getting the most out of customized KPIs is to select KPIs that are relevant and meaningful in measuring progress towards goals and objectives.
In Conclusion
KPIs are used in a Brand Health Tracker to measure and track brand effectiveness and success over time with the goal of optimizing the brand’s performance. By selecting and tracking relevant KPIs, brands not only understand brand performance, but they can identify strengths and weaknesses, benchmark against key competitors, make data-driven decisions to improve their brand’s health and market position, and track progress towards achieving their business objectives.
Kirsty Nunez is the President and Chief Research Strategist at Q2 Insights, Inc., a research and innovation consulting firm with offices in San Diego. Q2 Insights specializes in many areas of research and predictive analytics, and designs and implements customized Brand Health Monitors in consultation with many clients.
To reach Kirsty, call (760) 230-2950 ext. 1 or Kirsty.nunez@q2insights.com.
