The Canadian Marketing Association’s 2004 Brand Metrics Study

Today’s Brand Measurement: The Integration of Perceptions, Behaviours & Environments

Introduction

The Brand Concept in Canada

The concept of “brand” has been construed by some business leaders as an ambiguous and possibly enigmatic activity that is rarely measured. To these organizations, if assets such as “brand” are not measured, the ability to manage and nurture the asset obviously becomes minimized.

For those organizations that do conduct some form of brand measurement, it appears to be a common marketing practice to adopt the measurement of “brand” within communications efforts as well as the assessment of customer attitudes and beliefs, amongst others.

However, at the extreme, there are now some organizations where the brand plays a key role in defining the company culture and strategic direction of the organization and, as such, it is a key strategic asset that must be proactively managed for its financial health. In some organizations, each of the assorted brand tactics are continuously measured for the financial impact they deliver to brand equity. In organizations such as these, the brand measures are applied to not only the traditional communications-oriented metrics but also financial measurement. Some organizations are augmenting traditional brand measures with internally oriented brand measures to help create the view that the brand promise is being delivered through its advertising and communications and what it does through its advertising and what it does through its internal processes and delivery channels. This is being supported with hardened processes to not only conduct the measurement, but also provide the processes to facilitate actionable business decisions.

Organizations’ brands are generally believed to be an important asset for the business to protect. However, the profile that the “brand” concept is afforded by senior management and any brand measures and supporting processes are likely to widely differ within and between different sectors.

Many companies in Canada are unaware of the depth and breadth of brand measurements that are available to them or are finding it hard to determine what brand measures would comprise brand measurement best practice. There is also a strong need to provide a basic understanding of the supporting processes that result from brand measurements that enable any relevant management actions. To move forward more effectively, decision-makers in the companies that approve brand expenditures and review the company’s financial performance need a better picture of how they can adapt and implement brand measures for their business.

CMA’s 2004 Brand Metrics Study

To address this gap, the Canadian Marketing Association (CMA), in partnership with IBM Business Consulting Services and ING Direct, conducted a major study of brand metrics in the Canadian marketplace.

The results of this study are intended to provide companies with the business practices that work when managing, supporting, aligning and measuring the success of the brand.

The objective of this study was to conduct preliminary research to define the range of brand metrics and how they are being applied by companies in Canada.

The study set out to answer a number of questions, including:

1. How are organizations defining “brand”?
2. Do organizations have a formal process to measure brand?
3. Who is and who should be responsible for brand measurement?
4. What type of governance structure exists and what is the ideal structure?
5. What elements of the brand do they measure and what more is needed?
6. How do they measure the impact of brand effectiveness?
7. To what extent is the measure of the brand a priority?

Research Methodology

To fulfill our objective and answer our research questions, both qualitative and quantitative research was conducted using a phased approach:

Phase 1 - Focus Groups with Senior Marketing Professionals

Phase 2 - Online Survey with Senior Marketing Professionals

Phase 3 - One-on-One Interviews with “C” Level Executives (e.g. CEO, CMO, CFO, etc.)

The qualitative research was conducted in two phases; the first was focus groups with senior marketing professionals and the second was a series of “C” level executive interviews.

Phase 1: Qualitative Research - Focus Groups

The first phase of qualitative research consisted of 3 focus groups with senior marketing professionals at the Vice President & Director levels. To encourage open conversation, we ensured no competing companies participated in the same discussion.

The purpose of this phase was to help obtain a comprehensive understanding of how the concept of brand is being defined and measured, as well as explore how it is being managed inside different organizations.

The groups also helped to identify some of the issues these individuals face in progressing their brand agendas within their respective organizations.

Focus Groups were conducted by Rick Wolfe, a Partner in PostStone

Corporation, in Toronto on March 30 and March 31, 2004.

Phase 2: Quantitative Research – Online Survey

The online survey was conducted among 131 senior marketing and brand professionals across a number of sectors including:

• Financial Services
• Retail
• Manufacturing
• Consumer Packaged Goods
• Technology
• Automotive
• Travel, Tourism and Hospitality
• Telecommunications
• Other Service Organizations

IBM Business Consulting Services developed, conducted and interpreted the quantitative survey on behalf of the Canadian Marketing Association. Findings from the focus groups were used as primary input in developing the quantitative survey. Incorporating the findings from the focus groups, the online survey covered the following areas:

The online survey was conducted from May 10 to June 1, 2004, by IBM’s National Survey Centre in Ottawa.

Participants were invited via mail and/or email explaining the purpose of the survey and directing them to the designated website.

A total of 131 complete submissions were received for an estimated response rate of 5.5%. Assuming a population base of 2500 brand executives in Canada, our 131 responses provide an overall margin of error of +/- 7% at a 90% confidence level (nine times out of ten).

Question Areas

• How organizations are defining “Brand”
• The Role the Brand plays in the business
• Brand Measurement Practices
• How Brand is Being Used
• Brand Governance Practices
• Market Sensing Capabilities
• Analysis and Integration of Information Streams

Phase 3: Qualitative Research - One-on-One Interviews

Rick Wolfe of PostStone Corporation partnered with Laurie Dillon of IBM Business Consulting Services to conduct one-on-one interviews with four “C” level executives considered to be leaders in their respective industries.

Interviewees included executives from Retail, Financial Services, Telecommunications, and Internet Pure Play organizations.

The objective of these interviews was to better understand the significance and priority that differing types of key executive roles place on the brand concept. If a marketer can understand what is helping or impeding the concept of brand at the “C” level, then adjustments to the span of measurement can be made to accommodate those concerns.

The key questions being answered through these interviews include:

• What brand-related measures do you and the company look at most closely?
• How do you use these measures in decision-making and on-going performance tracking?
• How does this combine with other key measures?
• What is the role of the CEO and the leadership team in the development and use of brand measurement?
• How did you and the other leaders of the company arrive at the conclusion that brand- related measures should play the role they do?
• How important is brand strategy as a strategic lever? How does this compare to the other key levers in your business?
• Which areas of the company contribute to delivery of the brand promise? How do you see this evolving over time?
• Different companies see the correlation between brand strategy and business strategy in different ways, how do you see it here?
• How is brand strategy used: Internally? Externally?
• As an alignment tool? Extension across product lines and businesses?
• What are the keys to managing your brand?

Executive Summary

Introduction

Most organizations agree that their brands are generally believed to be an important asset for the business to manage and protect. However, how organizations do and to what extent are wide ranging in terms of the types of measures that are collected (not to mention the types of decisions made from the interpretation of those measures). Equally varied, and perhaps more telling, is the degree of internal profile or support that the “brand” concept is being afforded by senior management and the rest of the organization.

The results from this study will shed some light on how organizations are addressing each of these areas.

Key Research Findings

Through the interpretation of both qualitative and quantitative research, the span of brand measurements being applied by Canadian organizations, as well as the challenges and issues facing marketing executives as they look to improve their brand management efforts are examined. This report also identifies how these impediments are having a significant impact on the future scope of brand management and provides some high-level recommendations on how to improve this situation.

Some of the key learnings from this brand measurement study include:

1. The definition of brand – traditionally viewed by many as a communications-based concept – has evolved to be much more. Instead, it has expanded to become a customer experience-based concept. This definition likely marks a new perspective in brand measurement and management; an evolution that reflects the pressures that have been continuously mounting on traditional branding efforts. Consider some of the influences working against traditional brand efforts: first, the emergence of the multi-channeled, highly interactive world; second, the increased proliferation of new products; third, today’s pervasiveness of brand messaging; and fourth, the commoditization of many categories of products. There are other pressures as well, but nonetheless, there should be little surprise to see that the definition has evolved to help drive brand differentiation and relevance.

This definition likely marks a new perspective in brand measurement and management; an evolution that more accurately reflects the brand delivery aspirations in a multi-channeled, highly interactive world. It also marks a significant shift in scope for the measurement and management of a brand as it involves:

• The identification of what specifically defines the optimal experience – this is typically a segment-based view of an orchestrated set of “moments of truth” that span the customer lifecycle.
• The measurement and management of brand at every relevant touch point – through the channel design, through customer interactions within and across touch points, and collected via customer perceptions, behavioural and financial measures.

Brand is all about promise & experiences that people have...

• The measurement and management of brand within the employees – through their level of understanding and their level of commitment to brand delivery as these individuals will likely need to play a critical role in shaping and impacting the customer experience, through their dialogue and their tasks and activities.
• The dismantling of any “silos” within the organization as specific segment owners or channel owners or others cannot hoard data or act in isolation of the direction of the brand. Data must be shared and aligned along with employee tasks and measurement variables that are needed to ensure that an effective and efficient (and likely multi-channel) experience can be delivered that drives value to the customer and to the brand.

The complete support of the most senior management within the company is required if the delivery of brand is to become part of channel design and if it is going to become part of the every day tasks and activities of employees within those channels. Also, if it is going to be measured across the organization, then the support needed to ensure that this definition of brand can be attained will need to come from high up on the organizational ladder. Otherwise, the vision of enabling a branded customer experience will likely become a failed endeavor.

2. Role of Brand Culture - Organizations tend to orient their scope of measurement based on their cultural approach to brand strategy. Based on self-identified brand centricity, the findings within this research suggests that there exist three distinct organizational cultures associated with the measurement and management of brands – and the culture typifies the scope of measurement and management approaches used by an organization.

The cultures are:

a. The Brand Centric Culture – 34% of surveyed companies:

A company which considers itself “brand centric” enjoys a strong belief and equally strong level of commitment to “brand” at the very senior levels of the organization and, as such, enjoys a strong alignment between the corporate strategy and the brand strategy.

This type of organization has pragmatically formulated its brand strategy and tends to apply measures that focus on the effectiveness of its brand efforts from a communications and financial perspective. These organizations tend to apply a reasonably strong measurement framework involving the use of financial-based variables (to measure the financial impact of brand efforts) in addition to non-financial variables such as customer perceptions and behaviours (to measure the impact on customer actions and beliefs). These companies are limited in their adoption of brand-based ROI, and internal branding.

b. The Non-Brand Centric Culture – 22% of surveyed companies:

This is the opposite extreme of the Brand Centric organization. This type of organization does not pragmatically plan its brand strategy. Instead, this type of organization discovers it has a brand through indirect or serendipitous means. These companies tend to become established in an industry without ever having a brand strategy to implement or manage. Regardless, they are still successful in their own right and apply measures that focus on the marketing operations and financial necessities. The senior management team does not have a fixation on the concept of “brand” unlike the Brand Centric organizations. In actual fact, marketing executives from this type of organization are often afraid of using the term “brand” internally as it is often misinterpreted or misunderstood across the company. Instead, these organizations focus on superior service delivery or superior product delivery as a competitive point of differentiation.

c. The Androgynous Brand Culture – 44% of surveyed companies:

This is an organization which is undisciplined in its cultural tendency – Brand Centric or Non-Brand Centric. Like the Brand Centric organizations, the marketing executives within these companies place a strong value on the brand concept within the marketing discipline and are afforded reasonably healthy levels of understanding of brand within the senior management ranks. Yet it is the lack of commitment amongst those senior executives to drive the brand strategy forward throughout the rest of the organization that is acting as a major impediment to fulfilling the “brand as an experience” definition. This group also applies a narrow set of measures to assess their brand-based efforts and has not recognized the need to build the internal brand and broaden the organizational capabilities and measurements to ensure successful brand delivery.

3. Scope of Brand Measurement and Required Governance - One very important perspective is that regardless of these variations in brand cultures, there is ample opportunity to improve upon the scope of brand measurement. This can take the form of broadening the number of measures that are used to assess brand efforts (to include robust financial impact measures, customer behaviour and customer perception measures). It can also take the form of having a regular process to measure the brand – even among the brand centric organizations, less than half have a regular and formalized measurement process in place.

Another important consideration is that very few organizations have been able to grow their measurement scope to meet the current definition of “brand”. Most continue to focus on communications and/or financial impact, yet few have been able to effectively measure and manage a branded, multi-channel customer experience.

Many organizations recognize their limitations to successfully measure and manage the brand as an integrated customer experience. These limitations include overcoming the technical data barriers associated with having multiple forms of data, too much useless data, or inadequate IT environments. There are also process- and organizational-related barriers such as not having a centralized decision making in place to interpret and act on the data from across the organization, or not having the governance structure in place to enable aligned actions across the company.

One leading trend within brand measurement appears to resemble a Balanced Scorecard approach – the integration of external and internal variables and applying those into a cross-functional governance model that enables aligned actions across multiple channels. This is seen as a key means to drive the concept of brand delivery across the organization. It is based on a cascading set of variables that go from the CEO/Executive Team down to the Business Unit and Channel or Segment owners and then to customer-facing employees. In some cases, it also includes channel partners and business partners.

Just as important as the set of measured variables, is a formalized governance framework to enable the collection and interpretation of measures from across the organization that reflects the “customer experience” approach. The governance framework is the foundation of all “Brand as an Experience” activity within a company. It manages the processes that control the way brand-based initiatives are developed in a company. The governance framework helps a company set priorities and determine the internal process, organization and technology initiatives to be followed when executing the activities.

To successfully measure brand as a customer experience can be a significant transformation for some companies.

It requires a company to first recognize the need to compete on the concept of experience and then align itself to measure and manage consistently across the enterprise.

With respect to brand measurement, companies will need to rethink which metrics should be captured and applied to adequately track the performance and contribution of a branded customer experience.

By paying attention to the right brand metrics supporting the new definition of brand, companies can refresh, revitalize or reinvent themselves along the lines of customer experience delivery. This requires viewing the brand through a new lens; where the brand is based on what you are saying (involving communications to customers and employees) and through what you are doing (through channels, processes, activities and tasks).

Looking Forward: Summary of Recommendations

An important outcome of this study is to redefine and formalize brand measurement as on ongoing process that has a strong linkage to the assessment of the business.

The more an organization “manages what matters and measures what counts,” the more likely they are to gain productivity from their human and financial resources.

This is even more true when considering fulfillment of the “brand as an experience” definition. The elements that need to be measured and managed expand considerably from the traditional communications-based approach to brand – but if they are measured and managed appropriately the likelihood of increased performance also increases.

Regardless of sector or brand culture, there are procedures that many organizations can implement, including:

• The company will need to have a robust measurement scorecard that a senior management team can easily review to assess any recommendations.
• Any brand measures need to be in an actionable form.
• A concerted effort to enroll employees at all levels as part of the overall brand delivery process is needed to help ensure that there is a positive response to the measures and buy-in on consistent brand delivery.
• A tighter linkage between business and brand strategy is needed.
• The ability to collect, analyze and interpret all functions/information into a coherent course of action needs to be improved. Organizational silos need to be dismantled, data needs to be usable and actions need to be coordinated.

There are specific actions that organizations can take which relate to their brand culture and help them grow their brand management efforts. These include:

For companies that see themselves as Brand Centric:

• Their action/behaviour is still lacking in terms of having any regular formalized measurements, internal branding and ROI measurements. If the brand is to be defined as the customer experience, these types of measurements need to be made on a regular basis – and this needs to be more frequent than an annual assessment.
• The CEO and executive appear to be very willing and committed to the brand concept – to move in the direction of customer experience may not be difficult for these types of senior managers to accept or even grasp. It is after all, the evolution of branding

For the companies that see themselves as Non-Brand Centric:

• An increased importance needs to be placed on both financial measures and non-financial measures to ensure that any intended point of difference is compelling and relevant –across the touch points and across the organization.
• If the term “brand” presents a barrier to evolving the brand as a customer experience, it may be necessary to communicate to the rest of the organization that the multi-channel experience is needed to further their competitive edge.
• To specifically get the executive team on board for this journey, a significant effort may be needed to educate and inform those executives that the customer experience can be a significant shift from current capabilities.

For the companies that see themselves as Androgynous:

• This group suffers from an apparent lack of executive commitment to “brand”. Despite the fact that the senior management leadership team has a reasonable level of understanding of what “brand” is, they are unclear of what it can deliver to the organization. The leaders within this type of organization must be on board if there is any intent to create a focus on brand delivery.
• To help get them on board, the marketing team may need to focus on getting CEO buy-in with a view to having this individual embrace the ideals of brand delivery and champion the brand. These ideals may need to be positioned as strategic transformation.
• To move into this type of advisory direction, the trust of the CEO may need to be earned. This individual may not have shared the marketing department’s previous views of the world and, as such, communications and data will need to be carefully fed to the CEO office – and to continuously show progress and market wins.

Copyright, CMA, 2004