“In business, the idea of measuring what you are doing, picking the measurements that count, like customer satisfaction and performance … you thrive on that.” – Bill Gates
Picking the right brand performance metrics can be tricky. You have your choice of either behavioral metrics such as likelihood to purchase, likelihood to recommend, share of wallet, etc. Or, you can choose attitudinal metrics such as satisfaction, brand affinity, brand bonding, and more. All these methods can be tracked over time, and the findings used to drive brand strategy and navigate the competitive landscape.
There are a few industry standard metrics to track brand performance, and each one has its own pros and cons:
Customer Satisfaction (CSAT)
Sometimes obtained through a single measure, other times through a series of ratings scales.
Pros: It’s easy to answer, can be asked for multiple touchpoints in the customer journey or experience, and is a good way to take the temperature of customers. It’s equally easy to calculate, explain to stakeholders, and benchmark.
Cons: Unfortunately, it’s well documented that satisfaction measures often do not equal loyalty and should be used alongside other questions. Since satisfaction is not tangible it’s also hard to optimize. Plus, businesses should strive to be more than satisfactory. And, because it’s best measured among current customers, it’s limited in the ability to understand perceptions of potential customers. Furthermore, since it requires a rating scale it faces the issue of scale bias, especially for global programs.
Net Promoter Score (NPS)
Built on likelihood to recommend, a score of 0-6 means someone is a detractor, 7-8 passive, and 9-10 a promoter.
Pros: The beauty of NPS is its straightforwardness: We ask a single question and simply subtract % detractors from % promoters to yield the NPS score. It is widely known and used in market research, and brand health tracking studies frequently rely on it.
Cons: Analogous to CSAT, NPS faces the same issue of scale bias. The major downfall of NPS comes from its simplicity — it is one-dimensional and doesn’t help us understand the ‘why’ behind loyalty. NPS also has not been proven to link to better business results overall — it works better for some categories than others.
Share of Wallet (SOW)
SOW reflects the share of a customer’s category spending that goes to your brand.
Pros: SOW addresses the issue of evaluating brand performance in a vacuum and is more effective than NPS or CSAT at uncovering brand opportunities. Harvard Business Review published an article explaining how CSAT and NPS aren’t enough and companies need to grow their share of wallet. As the article states, customers may be very satisfied with your brand and happily recommend it to others. But if they like your competitors just as much (or more), you’re losing sales. SOW helps you collect insights about why customers would choose a competitor over you. In addition, the correlation between SOW and CSAT or NPS is very weak.
Cons: A disadvantage of SOW is that it doesn’t inherently tell you how to capitalize on uncovered opportunities or why customers allocate more to competitors.
The key thing to remember is that no brand performance metric should stand alone. A deep dive is necessary to get a big picture understanding of how your brand fits into the marketplace and how you can influence its success.”
There are ways to add value to any of these brand metrics, such as competitive comparisons and benchmarking, which help us understand whether a brand’s performance is actually good or not given the state of the market. Since individual brand performance metrics provide only a current state of the market snapshot, it’s advisable to include a battery of metrics to understand why a brand is performing the way it is and what can be done to drive improvements.
Building in these competitive evaluations and using driver analysis to understand what will grow brand loyalty, affinity, or recommendation is key to getting the most from your brand tracking. This broader view allows you to create a tool for simulating how improvement on measures you can impact will lead to deeper involvement and SOW. Other tools we recommend are mapping of strengths/weaknesses (SWOT) or perceptual mapping.
The key thing to remember is that no brand performance metric should stand alone. A deep dive is necessary to get a big picture understanding of how your brand fits into the marketplace and how you can influence its success. Loyalty comes from improving customer relationships and, as such, a holistic view is required.
Want to learn more about choosing the right performance metrics for your brand?
