Prologue: From Marketing 0 to Marketing 0


Figure 6.2 Purchase Action Ratio (PAR)



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Marketing 4 0 Moving from Trad Philip Ko
Management and Cost Accounting Bhimani
Figure 6.2
Purchase Action Ratio (PAR)
For example, Brand X wishes to spend more to increase its brand awareness by 1%. From a previous study, Brand X knows that its PAR score is 0.5. This means that half of Brand X's spending is being wasted in the process of generating market share. All other things being equal, Brand X may expect to have a market share increase of 0.5%. Although this is a ballpark estimate, it helps marketers plan their spending more accountably. (See
Figure 6.3
.)
Figure 6.3
What PAR Really Means
Marketers should also measure every conversion rate from awareness to advocacy. A low conversion rate from aware to appeal for a brand reflects low customer attraction. It indicates that customers who are made aware of the brand do not find it appealing. That may stem from poor positioning or poor marketing communications execution. Fixing these problems may result in an attraction level of closer to 1.
A low conversion rate from appeal to ask for a brand is a sign of low customer curiosity. Customers do not feel compelled to ask questions and research the brand further. This usually stems from a company's inability to trigger conversation and facilitate information sharing among customers.


However, the curiosity level of a brand should never be overly high. When customers have too many questions about the brand, it means the brand message is unclear. A curiosity level that is too high also requires the sufficient capacity of brands to answer customer questions directly (through their own communication channels) and indirectly (through loyal advocates).
Unfortunately, marketers can never control the outcome of conversations with advocates. Therefore, among conversion rates across the five A's,
curiosity level is the only one that should not be closer to 1.
A low conversion rate from ask to act for a brand indicates low commitment;
people are talking about the brand without making the commitment to buy.
Usually this means that the brand has failed to convert confirmed interest into purchase through its distribution channel. There are many possible marketing mix (four P's—product, price, place, promotion) flaws that may contribute to this failure; customers might find the actual product to be disappointing during trial, the price might be too high, the salesperson is not convincing enough, or the product is not readily available in the market. Fixing these issues will help the brand to increase the commitment level.
A low conversion rate from act to advocate for a brand indicates low affinity;
customers who have experienced the brand are not delighted enough to recommend it. The low conversion rate may be a result of poor post-sales service or poor product performance. Customers are attracted to buy the brand but are eventually disappointed with their purchase. Improving the usage experience will help increase the affinity level. (See
Figure 6.4
.)

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