In the complex marketing world, metrics that give a quick view of the health of different aspects of brand performance are an important part of a marketer’s armoury. Often, the problem is that there are too many KPIs to choose from and there is a need to identify a manageable and relevant set of metrics across the business.
Analysing historical data of candidate KPIs against business performance, using an approach called lead-lag analysis, can help to identify which metrics really are key performance indicators. This paper provides guidance on how brands can select useful indicators of brand strength and summarises some of the trends that emerge from this type of analysis.
Whilst metrics vary depending on category, objective, brand life stage and other factors, there are five key areas of brand health that should be monitored for most brands:
- Price premium is a valuable metric and brands that track it are well placed to realise potential margin opportunities and react quickly in response to a decline in price positioning.
- Non-promotional sales are a useful indicator of brand strength and tracking this over time will help to avoid an over-reliance on promotions.
- Customer experience metrics not only help brands to benchmark, track and predict performance but can also help to diagnose issues that directly lead to improved business results.
- Financial health should make brands more resilient to economic instability, and better equipped to drive scale, and there are some essential metrics that should be tracked.
- Behavioural-based digital metrics are often more predictive of subsequent purchasing than consumer-based research measures such as likelihood to buy.
Identifying the right brand strength KPIs is not only useful for rationalising historical performance but also enables brands to respond quickly to changing market dynamics and improve business performance in the future.
This paper was published by WARC, September 2020.