Prologue: From Marketing 0 to Marketing 0
Figure 5.4 The O Zone across the Customer Path
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Management and Cost Accounting Bhimani
| Figure 5.4 The O Zone across the Customer Path The level of experience that customers have also determines their customer path. First-time buyers of a product category typically go through the entire five A's and rely a lot on outer influence. Thus, many first-time buyers end up buying brands with the highest share of voice. As they become more experienced after a few rounds of purchase, they rely more on others', sometimes skip the appeal stage, and perhaps switch brands. The most experienced customers usually have stronger own influence. When they have finally found their favorite brands, they will skip most stages in the five A's and continue to use the brands perpetually until the brands disappoint them. The O 3 is another tool that helps marketers to optimize their marketing efforts. When marketers manage to identify the importance of outer, others', and own influence, they will be able to decide which activities to focus on. When outer influence is more important than the rest, marketers can focus more on marketing communications activities. On the other hand, when others' influence is the most important, marketers should rely on community marketing activities. But when own influence is the most important, marketers should put more emphasis on building the post-purchase customer experience. Summary: Aware, Appeal, Ask, Act, and Advocate In the digital economy, customer path should be redefined as the five A's —aware, appeal, ask, act, and advocate—which reflect the connectivity among customers. The concept of Marketing 4.0 ultimately aims to drive customers from awareness to advocacy. In doing so, marketers should leverage three main sources of influence—own, others', and outer influence. This is what we call the O Zone (O 3 ), a useful tool that can help marketers optimize their marketing efforts. Reflection Questions How can your brand identify and leverage the most critical touchpoints in the customer path? How can your business improve brand favorability and optimize marketing efforts by evaluating the three main sources of influence across the customer path? 6 MARKETING PRODUCTIVITY METRICS Purchase Action Ratio (PAR) and Brand Advocacy Ratio (BAR) We all acknowledge the importance of brand awareness as the gate to the customer path. But too often we see marketers in various industries battling it out to achieve top-of-mind brand awareness, only to falter in driving customers to purchase and ultimately to advocacy. They spend a huge amount of money to build that early advantage of popularity and subsequently rely on the “natural progression” of customers in their path to purchase, without really making the necessary intervention. Brand awareness is indeed important, and brand managers realize this. They regularly conduct research to track how well the market actually remembers and recognizes their brands. Spontaneous—and especially top-of-mind— recall is usually their goal. Some even believe that share of top-of-mind recall is a good predictor of market share. This is true in some industries that have low customer engagement and a short purchase cycle (e.g., in consumer packaged goods, where awareness alone sometimes leads to purchase). But in industries with high customer engagement and a long purchase cycle, awareness is only the beginning of the job. In a separate room across the hall, service managers are tracking customer satisfaction and loyalty. A large number of delighted customers is reflected in a high loyalty index. Loyalty itself has been redefined as customer willingness to recommend a particular brand. Thus, the ultimate goal on this end is to reach a high number of customers who are willing to advocate their brands—that is, a higher brand advocacy than that of other brands. Metrics such as awareness and advocacy, however, have inherent weaknesses; they focus more on the outcome rather than the process to reach the goal. The metrics are useful for tracking a brand's progress and for measuring the performance of the brand and the service teams. But brand and service managers often face difficulties understanding why their scores go up or down in any given quarter. Consequently, changes in the results are not being followed up with any marketing interventions. Moreover, brand managers and service managers do not necessarily talk to each other when it comes to conducting and analyzing their own research. Because of these organizational silos, companies often fail to see any correlation between awareness and advocacy. They miss the simple but important insight into how effective they are in converting people who may be aware of their brands in the market into customers and even into loyal advocates. Introducing PAR and BAR A new set of metrics should be introduced to solve the problems with the current measurement. In line with the five A's, two metrics are valuable to measure: purchase action ratio (PAR) and brand advocacy ratio (BAR). PAR measures how well companies “convert” brand awareness into brand purchase. BAR measures how good companies “convert” brand awareness into brand advocacy. Essentially, we are tracking the number of customers who go from aware (A1) to act (A4) and eventually to advocate (A5). From a population of 100 people in the market, for example, Brand X is spontaneously recalled by 90 people; out of that 90, only 18 people end up buying the brand, and only 9 spontaneously recommend the brand. Therefore, the PAR for Brand X is 18/90 or 0.2 and the BAR is 9/90 or 0.1. On the surface, Brand X looks promising since it has a brand awareness of 0.9, but in fact it performs rather poorly. It fails to convert 80% of the high level of brand awareness into sales. (See Figure 6.1 .) Download 1.31 Mb. Share with your friends:
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