Brand Strategy, Insights Division
Why standardized brand KPI tracking is obsolete
For pilots, flying blind is a terrifying scenario. Crashes occur when pilots lack reliable information about essential flight parameters: airspeed, flight level, altitude, heading, position, etc. Flight parameters are tangible, mostly standardized physical variables or units of measurement, the same for all.
The challenges of brand management are in some ways comparable with those faced by pilots. Brand managers also need reliable parameters that tell them whether they are managing the brand in a way that optimizes the success of the enterprise.
Brand management differs from flying in that there are no generally valid, uniformly defined units of measurement and parameters for brand success. These are countless and they differ both in what is measured and how measurements are taken. However, ongoing integration of data is associated with a flood of potential brand success parameters, as well as surveys. Think: big data.
This is a problem for brand managers. Which parameters are most relevant and how are they related? Despite – or precisely because of - the diversity of data, brand managers often find themselves flying blind nowadays.
Flying blind in brand management means that it is impossible to determine whether strategy implementation, brand communication or brand experience design does truly foster corporate success. Even the best brand strategy is worthless if its success cannot be proven.
Yet, it is possible to get a clear view of brand performance, even today. Reaching this goal no longer takes you down the path of standardized brand equity approaches, but instead requires a combination of established brand KPIs (such as awareness, salience, trust or first choice) with specific KPI systems that are geared toward each individual brand business model.
KPI development is therefore an essential part of brand management, linking brand strategy expertise with analytics experts.
There are three key questions to ask when developing specific brand KPI systems:
- What does success in brand management mean for the company?
The way in which brands influence corporate success is diverse and depends on the market, the target audience, the product and many other factors. In order for a KPI system to be accepted by all stakeholders in the company, there must be agreement on what success looks like; that is, what the target variable is. This can be turnover, loyalty, churn rates or recommendation rates – or a combination of several. What is important is that all stakeholders agree. Classic brand strength or image measures are usually of secondary importance when considering KPIs that explain success.
- What data sources and streams need to be part of the KPI system?
We generally recommend combining survey data with data based on hard facts. Even if it would be tempting to base future marketing decisions solely on customer behavior data, hard facts never explain the “why” part of the question – customers’ motives, barriers and longings. The development of a KPI system tends to include many more data sources than remain in the finished system, which is designed to be lean, and to rely on surveys lasting no longer than 10 minutes.
- What KPI granularity is required for brand management?
Most clients answer this question with “all markets and target groups need to be covered”. The reality usually ends up looking quite different, because the 80/20 rule also applies here. It is sufficient for most companies to cover the most important 20 percent of markets and target groups, as this often accounts for 80 percent of the potential gain in knowledge.
How long does it take to develop and roll out a specific KPI system? It’s hard to make a generalization, but we are generally talking about months rather than weeks, usually in four phases:
- Strategic framework
Meetings / workshops are held with stakeholders of the company to define what goal the KPI system must support and the scope of it.
- Baseline study
The target groups, markets and data sources to be included are determined for a baseline study. The study is carried out and the data is processed.
- KPI development
The data is evaluated in an integrated manner, and the items and KPIs that make a high contribution to the chosen brand success variables are defined. These are transferred into a structural model and agreed upon with the client.
- A finished KPI system is created
A questionnaire is derived from the structural model. The key data, as well as the reporting format of the KPI tracking, is defined in consultation with the client. Then specific KPI tracking starts.
The most important advantage of specific brand KPI systems is the trust they engender among stakeholders. Trust is based on measuring what has been proven to have an impact on the success of the business. Brand and brand management are therefore accepted as what they are: essential factors in the success of the company.