Building a Brand Scorecard

January 1, 2005    

Measuring the long-term value of marketing in creating customer preference and loyalty for your brand(s) is critically important in determining the return from the investment. Depending upon your industry or category, 50%, 60%, 70% or more of your marketing expenditures may be in support of programs and initiatives which cannot be shown to have short-term effects on incremental profits, but can be shown to improve the health of the brand in the marketplace. But if this "brand health" isn't something we can easily translate into forecast profits this year, we need to treat it as an asset - something that generates positive returns over a longer period of time.

This is where a brand scorecard comes in.

The brand scorecard tracks the health of the brand in the minds of the customers. Whereas the marketing dashboard tends to look the things more from the company's point of view - "What investments are made in programs and initiatives and what I should expect to get out in terms of customer behavior?" - the brand scorecard asks, "What do our major constituencies of interest think and feel about our brand and how well is our brand supporting our desired value propositions?"

In a comprehensive marketing dashboard, the brand scorecard stands somewhere in the middle between the inputs and the outputs. Let's take a look at what the critical elements of a brand scorecard are, how many constituencies it should reflect, and why it deserves to be treated specially within the dashboard.

Brand Scorecards Challenges

There aren't enough brand scorecards today. If you ask 100 companies to show you their brand scorecard, 20 will look at you quizzically, another 20 will show you elaborate consumer surveys of brand attribute ratings, and the remaining 60 will pull out a research summary of the latest scores on the classic "hierarchy of effects" waterfall:

• 74% of consumers are aware of the brand on an unaided basis
• 61% indicate an overall favorable impression of the brand
• 47% indicate a willingness to try the product

• ... and so on

The problem with this typical waterfall is that it never actually connects awareness or preferences to value creation, and as such is seen by CFO and the rest of the finance department as "marketing mumbo jumbo" used to justify spending money.

Awareness is a useless achievement unto itself. Each of us is personally aware of a great many companies that we know nothing about. We don't know what they make or do, and even if we do, we have no clue as to why we might want to buy their product or service. We may have an awareness of these companies, but no salience to that awareness that places it into a proper context for us.

Salience itself may have multiple levels. I may know IBM makes computers, but I may not know they make the kind of Web servers I need for my company. Or maybe I know they make Web servers, but I think they offer solutions only in the high-performance/high-priced end of the market.

Preference also has many potential dimensions and degrees. I may prefer to drive a Jaguar, but have no realistic hope of ever being able to afford one. I might thereby "prefer" the Hyundai to the Kia, but do I really "prefer" the Hyundai?

The example above indicates how brand preference is of little value absent the proper context. My preference for a given brand should be measured within the context of those that are physically available to me and within my affordability zone. Preference should also be measured in a temporal context - relative to the point in time when I am most likely to translate my attitudes into behavior and buy.

When it comes to willingness to try the brand, the wheels really come off. Just because I'm willing to try it doesn't mean I ever actually will. Maybe if I get a coupon for 50% off I'll consider it, but if it's not available where I normally buy, my willingness is strictly theoretical.

Purchase intentions are only valid when the prospective customer has the appropriate salient awareness, knows where to buy the product, understands what the tradeoffs are within the competitive set, and has the money and desire to act. Only then are the intentions appropriately qualified.

There's little doubt that salient awareness, contextual preference, and qualified purchase intentions can be valuable indicators of the potential economic value of the brand. But until they are unlocked and flowing freely from the minds and hearts of the customers to their wallets and into our company treasury, we must find a way to measure them for what they are: Assets. Good intentions. Accumulated goodwill toward the brand that has not yet translated into a financial outcome.

The role of the brand scorecard within the marketing dashboard is to reflect the evolution of these brand assets and continually gauge the potential value of the demand they represent. For this unique reason, we recommend setting up the brand scorecard as a separate-but-linked portion of the overall marketing dashboard. Doing so helps to highlight both the input/output importance of the dashboard and the asset-nurturing insights of the brand scorecard.

To begin, let's look at the potential cornerstones of any consumer/customer brand scorecard.

Four Key Attributes for the Brand Scorecard

Every company and possibly every brand will have its own view of the most crucial components of the customer's brand decision process. Some choose to use syndicated approaches to brand measurement like Young & Rubicam's Brand Asset Valuator or Millward Brown's Brand Tracker. Others have developed an exhaustive battery of brand attributes they measure through elaborate tracking studies. Regardless of the approach you are using (or if you're just starting out), the key consideration is to find the elements that are most predictive of the future behavior of prospects and customers.

In general, there are four dimensions of brand measurement that tend to bind the customer to the brand:

1. The functional performance of the underlying product or service
2. The convenience and ease of accessing the product or service
3. The personality of the brand (a.k.a. "the one for me")
4. The pricing and value component

1. The functional dimension seeks to measure the customer's (or prospect's) perceptions of the more tangible aspects of their brand experience. Is the product of sufficient quality? Does it work as promised? Is it more durable, more flexible, more efficient, more yellow, more professional, more appropriate to the intended task than perceived substitutes? Each brand is intended to deliver a combination of functional benefits to the user, be it a toothpaste, financial services, or silicone polymers. The brand scorecard should reflect how well these functional elements are perceived by the experience of regular customers versus the newly acquired customers and how they compare to the perceptions of the imminent prospects versus those in the target audience at large.

2. Each brand also has, as part of its fundamental equity structure, perceptions and knowledge about where to buy the product or try the service. Can I get it at my local mass merchant store? Do I buy it on the Web? Will an agent come to my home? The degree to which the prospects are aware of how they would acquire or access the brand and their perceptions of the acceptability of that avenue are important components of the brand asset value. Likewise, the perspectives of the current customers of the ease of access through the present distribution channels provides an important opportunity to validate or question the current business process.

3. Brand personality is very important in many categories. As marketers, we all understand how one soft drink might have a different "personality" than another. For many years now, marketing researchers have used personification exercises to get consumers to describe a product as male/female, young/old, progressive/conservative, outgoing/shy. Corporate brands also tend to have key personality traits like "reliable," "trustworthy," "innovative," etc. If you can establish that certain personality profiles, when attached to your brand, increase the likeliness of prospects becoming customers and customers buying more, then those critical elements should be on your brand scorecard.

4. Brands often exist for one primary purpose - to differentiate competitive offerings and prevent commoditization of the market. Brands are used to imbue certain companies or products with a premium value perception which commands a premium price. In other categories, brands are used to capture the consumer gratitude for being the lowest price provider. In either extreme, or at any point in the middle of that spectrum, every brand has a price/value component to it which is either the bedrock of its success or is a competitive requirement to compete effectively. This "absolute price" perception is often worthy of tracking on the brand scorecard.

The second dimension of pricing is the "relative price" - a measure of the extent to which prospects and customers perceive that your brand offers good "value for the money." Continuously gauging the relative price perceptions is an effective way to quickly identify opportunities for market or margin share increases.

Conclusion

The combination of functional, accessibility, personality, and value attributes of the brand often provide a well-rounded picture of how well the brand asset is growing and how much untapped cash flow is waiting to be unlocked.

But you have to do the spade work to understand the links between brand equities and financial success in your category. What is often thought to cause people to purchase - Brand A seems to do the job better than Brand B - quickly goes out the window when the choice is guided by, "I really can't be bothered to think about it. Brand A is available now, and Brand B isn't." If this is common in your category, then some kind of distribution weight or availability of the product can be a more important scorecard metric than one that measures the degree to which the customers believe your brand has a special functional characteristic or has a personality "like me." Sometimes it's sufficient to have your brand just penetrate the competitive set and then out-execute the competition on distribution or packaging. Knowing what really drives your brand category is critical to selecting the scorecard metrics that will be both most diagnostic and most predictive of future success.

This generic framework can be applied across different categories, although the weight of the individual components may actually vary dramatically.

Source

Marketing by the Dashboard Light. Patrick LaPointe. ANA: New York, 2005.