panorama DO YOU
‘LIKE’ OUR BRAND?
YES, I VIEW, ‘LIKE’, TWEET AND BUY YOUR PRODUCTS
GETTINGETTING THE MEASURE
Do views, ‘likes’ and followers amount to good marketing expenditure? Lisa Jones evaluates return on investment
Imagine if stockbrokers failed to prove a link between the investments they had recommended and the profi ts they generated. It doesn’t happen because part of their remit is to assess the success of existing investments to inform future decisions. So why don’t marketers – who are also making investments to deliver a return – demonstrate the same rigour? The value of traditional approaches to
measuring marketing success, using metrics such as brand recall, brand awareness and propensity to purchase, are often scrutinised for not being fi rmly rooted enough in the business of selling more products to more people, more effi ciently. Like brokers, marketers need to assess
the success of past campaigns with a view to that data assisting the strategy of long- term communications. Often, wanting to be seen to be measuring something, marketers end up using the wrong metrics altogether. A common error is focusing on the
quantity of audience as opposed to its quality. Yet in these increasingly digital times, a brand like Nike can appeal directly to its target audience via Nike
Plus, its online running community. Nike Plus engages fewer people than a show- stopping television advertisement, but that audience’s affi nity with the brand is considerably higher. Measuring the business benefi ts of being
a popular brand on social media platforms presents a new quandary, particularly as brand guardians tend to view YouTube views, facebook ‘likes’ and Twitter followers as metrics in their own right, divorced from business objectives. This is a dangerous and short-term
tactic: a brand may be ‘liked’ or followed by so many millions of people, but that is meaningless – and even detrimental to long- term brand loyalty – if the brand doesn’t interact with the audience. Don Peppers and Martha Rogers,
founders of the management consultancy Peppers & Rogers Group, vehemently discourage short-term tactics, reasoning that they succeed only in eroding customer loyalty and increasing churn. Instead, they recommend assessing the return on each customer – as opposed to fi xating on a return on specifi c marketing investments
– as a way of tackling measurement. They argue that “a company’s value relies on the sum total of its customers’ combined lifetime value,” and point out that investing in their loyalty, giving them an ongoing reason to be repeat customers, could pay dividends. Focusing on ‘customer equity’ enables
marketers to see every single customer interaction as a chance to boost their lifetime value, and certain companies’ experiences suggest that this ‘return on consumer’ approach works. In the UK, mobile operator O2 geared
its communications towards customer retention when its competitors were focused on acquisition. Not only did retention rates improve but so did acquisition as people, fatigued by poor customer service at rival networks, switched to O2. Many marketers have invested a great
deal in working out how much their brands are worth, without realising that the real intangible asset they need to measure is the people who buy them. After all, without any customers, a brand is nothing at all.
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