Good measurement is the foundation of good brand management. It eliminates biases, aligns people under a common language and boosts confidence on what to do next. But in a world flooded by data, can another measurement system add new value?
Good measurement is imperative to create lasting impact. Even those that are sceptical about data as a key input to create new things have to agree on one thing: without data you will never know if the things you create work or not.
But a challenge on brand measurement today is that it either measures too many things, too few things or the completely wrong things. That’s why the “good” in good measurement is so critical to make any data play work, and it’s the driving force behind the measurement framework for the Alpha and Beta of brands.
In this article, I invite you to dive deeper on the structure of the framework by bringing more rigour to the ideas I’ve laid on the first article. Here you will find exactly which metrics you should consider to track Alpha and Beta and how to make it work. On the third and final article of this series, I will recommend the strategies and teams you need to have in place to improve your Alpha and Beta. Finally, if you haven’t read my first article introducing the Alpha and Beta of brands, do so before moving forward!
Definitions first
As this article focuses on measuring something, I better step back for a second to clarify what this something exactly is. Are we talking about business growth? Corporate identity? Reputation? Is it also culture? Brand strength? But wait, what is a brand in the first place?? Hum... not sure I want to go there for now.
The point is - without a clear definition, it’s impossible to be precise on what’s being measured. And, as important as that, what’s not being measured.
The Alpha and Beta is a brand management framework. With that in mind, I’m considering the commercial value of a brand to be what is commonly known as brand equity - a value premium that a company generates from a product with a recognisable name compared to a generic equivalent[1].
The fundamental logic is that strong brand equity generates superior business results by influencing consumer behaviour to chose your products over the competition (today and in the future), allowing a premium price and better preparing the business for a reputation crisis.
A quick recap
If my first article is fresh in your mind, feel free to skip this part! If not, here goes a quick recap on the Alpha and Beta.
Beta reflects the brand’s scale and presence and is composed by one factor: Availability. Alpha measures the potential of brand equity to deliver superior growth and is composed by two factors: Superior Utility and Desire. Alpha doesn’t need both components to be high - outperforming on one of them is enough.
Beta is the critical factor to influence business growth, but Alpha operates with a multiplier effect in every increase in Beta.
The Alpha and Beta algorithm
As stated above, one issue of brand measurement is that it often measures too many things, not enough things or the wrong things. The value of the Alpha and Beta algorithm is in carefully selecting metrics that precisely reflect each component, avoiding too many correlations between metrics but still offering good enough coverage on different aspects of brand equity so that the framework is useful in generating strategic implications and reliable tracking. Every metric included in the framework has a rationale to be there, as well as the metrics that were left out (there is value in what you don't see!).
Before revealing more, let me put this right up front: as any algorithm, this needs testing and iteration. This is just a first step - to put ideas on paper as a solid hypothesis so that we can keep evolving it. My end goal is to have those metrics analysed against business performance indicators to keep adjusting the mix.
So - here is a table of how the framework metrics come together:
THE ALPHA AND BETA OF BRANDS MEASUREMENT FRAMEWORK
Beta is all about its main component, Availability. Think how omnipresent and memorable brands such as Coca-Cola, Nike, or IBM (in a B2B context) are, also holding significant levels of trust. Availability is measured by the following metrics:
Coverage - measured by prompted awareness, the number of people that know the brand.
Salience - measured by unprompted awareness, calculates how easy the brand comes to mind.
Trust - guarantees that negative associations are being considered. If the brand is well known and salient but in a bad way, customers may not only stop buying the brand but also spread a negative stories to other people. Finally, as trust is highly correlated with the size of the brand, the adjustment is slightly fixed to decline faster if trust levels are more negative and to increase more slowly as trust scores become more positive.
In summary, the number of people that know the brand name, plus its salience levels and an adjustment by a metric of trust gives you Availability. You should monitor all three metrics as they provide different strategic implications.
Now let’s jump into the Alpha components.
Superior Utility measure how well the brand is perceived to deliver well on key functional attributes. Citimapper, for example, is really good in offering you the best way to get from A to B in a way that really fits how people actually want to analyse transport options. So Superior Utility is measured by the following metrics:
Consideration - detects if the brand satisfies basic needs. A high consideration score indicates that the brand attends basic demands of more people. The metric focus only on non-consumers as there is no much point in measuring consideration for people that have already bought the brand.
Performance on drivers of purchase - measures signs of superior perceived utility versus competitors. It should consider only main category purchase drivers such as perceived quality, convenience and value for money. The brand doesn’t need to outperform competitors on all drivers - the important thing is to significantly outperform on at least one of them.
Recommendation - measures the direct experience people have with the brand’s products and services. Some people may argue that this is not part of the brand, but the result of the quality of its offer (even though science has already proved that your previous perception of something can shape how you experience this same thing e.g. think about expensive wines). The point here is that this experience will shape memory structures associated of the brand, resulting in more word of mouth and recommendation. If Alpha and Beta is measuring brand equity that drives business growth, measuring how well people experience the brand is critical as it is part of how perceptions are formed.
Finally, Desire captures all things that are difficult to explain, but that we know to be precious qualities for a brand that wants to grow, our needs to fit in and stand out. Think about how luxury brands such as Chanel and Gucci makes you feel, or the success of Appel in charging a premium for a phone that objectively performs similarly to other competitors. Without going deep on different implicit motivations, the list of metrics below covers important (and hopefully sufficient) aspects of Desire. They should all be self-explanatory:
Admiration - the appreciation for the brand in a social context
Pride - the level of connection between an individual and a brand, how much one identifies with what the brand represents
Novelty - the ability of the brand to stay fresh and tap into our human attraction for the new
Cool - the brand’s hype and collective sense of "trending"
There are many other metrics that could go into the framework, such as positioning attributes. These are not included as they would be a double count on metrics that are already being tracked (e.g. performance on positioning attributes should be reflected in metrics such consideration and admiration, among others). It's still important to track other KPIs, but separately and for other purposes.
Sample and benchmarks
In addition to the metrics, there are two critical elements of the measurement process: which audiences to focus and how/when to benchmark them against competitors.
About the audience: the measurement framework is designed to consider specific metrics for different groups of consumers depending on the degree of awareness and familiarity with the brand. There could be multiple levels to set up those groups (e.g. aware but not familiar, non-consumers but very familiar, light buyers, heavy buyers, etc) but, for simplicity, I’ve kept two main groups: consumers and non-consumers. On the main table above you can see which group (or groups) each metric should be measured against.
About the benchmarks: defining a clear competitive set will be needed to compare the performance of a brand’s Alpha and Beta in some metrics (all also defined in the main table above). This can be a tricky exercise as classic competitors may not necessarily be the most relevant ones, and missing important future players won’t reveal a brand’s true performance.
The most common approach is to identify the top performing category players. But Harvard Professor Rita McRath [2], one of the most cited business leaders today, points to the need to look carefully at rigidly set categories. In today’s fast-changing world of business of low barriers for new entrants and technology disruption, previously established categories expand and change very quickly. She uses the term “arenas” to frame a more appropriate competitive context, which is largely defined by consumer's main “job to be done (JTBD)”. JTBD are overarching goals that consumers need to fulfil in certain broad contexts (the term was created by another Harvard Professor, Clayton M. Christensen, author of the bestseller The Innovator’s Dilemma [3]).
For example, if you think about the domestic airline category in the UK, a traditional list of players would be composed by obvious ones such as British Airways and EasyJet. However, if you think about the arena of long-distance mobility, you will need to also consider bus companies, car rental ones, or even car-sharing startups, for example.
In some cases you will may want to consider more than one arena, specially when a brand clearly delivers to more than one overarching jobs to be done. The important thing is to make sure they are sufficiently different from each other and important for the business.
It’s a fine mindset change, but it’s quite a fundamental one. By including players, big and small, that will be competing for the same overarching consumer goal, it allows for a stronger focus on the future. Needless to say that each case will be different, and arenas should be framed depending on the context of the analysis.
A note about digital, behavioural and business metrics
As discussed before, the Alpha and Beta framework aims to measure brand equity, hence the survey based metrics on consumer awareness, familiarity and perception. All of this data can be collected through a standard consumer survey, which is big advantage for the analysis quality: single-source databases are easier replenished and issues around data standardisation are reduced (a common issue mainly when there is a need to benchmark results against competitors).
That said, there are a number of other metrics that should be analysed alongside the framework. Ultimately, a stronger Alpha and Beta will impact people’s behaviour - search, referrals, shares and positive comments on social media, which should end up moving business metrics - sales, costs of acquisition, ultimately, profits. Those behaviour and business metrics will help managers to see the full picture of what is working, what is not working, and how brand equity is moving those metrics.
To reinforce - the fundamental point of this thought piece is that brand equity delivers superior competitive advantage in the mid-long term, and that’s what we are measuring and managing. In today’s growth-hacking, performance marketing addicted world, it’s easy to get absorbed by digital metrics that are easily captured and tracked. They are important, but they are also short term.
Digital is a sales tool. Brand is a survival tool.
Conclusion
This article started questioning if measuring the Alpha and Beta of brands could offer any new value for the current data flooded world of business.
My hope is that, at this point, you are thinking... "yes it does!".
There isn’t anything necessarily new in the metrics presented, but the value resides is the careful selection of each metric and the rational behind it. A mix of not so many metrics that you find correlations everywhere and waste time analysing data that won’t tell you the brand's true performance, but not so few that will make you miss relevant strategic implications. I also hope that the directions in terms of audience and benchmarks help to track what matters.
It now needs to be testes and put in practice - that's my challenge. It may not fit every case or category, and may still need adjustment, but I'm confident it’s a good start. As mentioned in the first article, frameworks are really helpful to get us thinking and direct the mind to the right paths. Towards a structured plan. Hopefully having some data points will make the thinking even more robust and boost everyone’s confidence on what to do next.
If you ever hear again "oh but brand performance is hard to measure", I hope you respond with a smile and a suggestion for a meeting about Alphas and Betas.
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Let me know what you think, and stay tuned. This article was the second on a three pieces series about the Alpha and Beta of brands. The third and final article will focus on the strategies and teams you need to put in place to make your brand unbeatable!
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[1] Investopedia
Cover picture by Kenny Luo
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