A Global Marketing Executive's Perspective on Brand Versus Performance Metrics
Emily Culp, a global marketing executive, former CMO of Keds, and Board Member at Mizzen + Main and Stio & Cordial, recently sat down with the ANA's Michael Berberich, senior director of content and marketing, to discuss her views on brand versus performance metrics and how marketers can make the right decisions for their brand.
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Michael Berberich: How do marketers make the decision to focus on performance marketing versus brand marketing?
Emily Culp: I consider myself a wholistic strategic marketer who values the consumer and with that, understands how important it is to engage the consumer across channels in a variety of ways – CTV, social, catalogs, events, retail stores, PR placements – with a compelling story. Hence, I value both performance & brand marketing.
As a CMO, it is important to put into perspective what the strategic business objectives are and what stage of development the business is in at that particular time. For example, if a key objective is to scale overseas and you have low brand awareness, you might select a different go-to-market mix of brand vs. performance tactics than a business who just expanded their brand into wholesale and have great brand awareness but want to drive sell-through at retail. The mix of performance versus brand marketing will oscillate but, in my opinion, there always need to be a mix of both for long term value creation.
Berberich: So before focusing on one or the other, there needs to be a period of assessment. How important is it have a moment of "self-realization" to understand what your business could benefit from before starting the journey?
Culp: You're absolutely right, you need to assess the business. One of the greatest sources for this information beyond the sales, finance, and data you can garner, is the consumer. I truly believe all businesses, regardless of whether they are a billion-dollar brand or a $30 million rapid growth brand, should take the holistic marketer approach I mentioned and focus on the consumer. Only then can a CMO truly make an informed strategic marketing recommendation on what the optimal brand vs. performance marketing mix should be to deliver the growth the company is projecting.
Of course, you want to have a phenomenal product or service, but even if you have a phenomenal product or service but you're not focused on your consumer, you don't have a business proposition.
As a marketer, I first focus on the consumer to understand where that consumer is with us, how are we engaging with them across channels and specifically, how we are communicating with them.
What's working and what's not working? What are we saying to them? That goes back to brand position or campaign and points of differentiation.
After understanding all of that, that's when I dig into, "OK, what are the different pieces of this? Where can we optimize?" At the end of the day, you're trying to create value for the business and ergo connect with your consumer. So, it needs to be a holistic view.
Berberich: You talked about making decisions as a CMO. From your perspective, what new KPIs should a CMO key in on to drive business growth?
Culp: One of the biggest challenges I see right now, is that Boards and Investors are asking marketers to focus in on just one or two key metrics, as a proxy to the overall effectiveness of the brand and performance marketing investment. However, I believe in a more wholistic approach, where marketers look at metrics across the full customer experience or funnel.
If you only focus on one or two metrics, you risk losing sight of other areas of the funnel. I'll give you an example, many marketers become incredibly focused on decreasing Customer Acquisition Cost (CAC) and increasing Return on Ad Spend (ROAS). If you become myopic in just lowering CAC, you will lose sight of the health of the brand which fuels long-term growth.
By lowering CAC and increasing ROAS, you often target the same type of people; however, those people may not have a high customer lifetime value. Therefore, you are filling your funnel with what is perceived as super-efficient customer acquisition from a cost perspective, but long term isn't going to be accretive to your business. It is key to find the right balance between short-term and long-term metrics and define your set of KPI's accordingly.
Berberich: Building off that, can you give us a clear delineation of what lifetime value (LTV) is versus customer lifetime value (CLV)? How are companies transitioning to measuring LTV and CLV?
Culp: From my perspective, the big difference is that customer lifetime value accounts for the profitability associated with the products the consumer is purchasing. In terms of measuring lifetime value and customer lifetime value, some of the biggest barriers many companies face are organizational alignment, technology tools/platforms, and sharing of data. To transition from LTV to CLV, the company needs finance, product, marketing, and the sales functions to all work together.
In addition, properly measuring LTV and CLV requires companies to store significant data. Optimally, I would say ten years but realistically, three to five years is acceptable. However, it isn't just one metric that companies should be storing. Companies should be storing every input that goes into understanding their customers & their purchase behavior.
In essence, CLV puts the focus again on the customer and provides more insights on how they engage with your brand. That's how you create breakthrough brands that truly drive value and change the marketplace.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Michael Berberich is a senior director of content and marketing at ANA.