Marketers need to stop focusing on R.O.I. and start thinking about Relevance
Accountability is the new black for marketers.
Marketers only obsessed with R.O.I., striving to demonstrate that they are allocating marketing investments as efficiently as possible, are doing themselves a disservice. By interpreting marketing accountability solely in terms of a metric of short-term payback, they are reinforcing the impression of marketing as a merely tactical discipline.
The bigger question is how to measure brand equity and assess that brands truly are assets enabling the business to generate superior returns over time.
According to Jonathan Knowles*, “many of the traditional metrics favored by marketers — awareness, familiarity, and quality — are no longer suitable as measures of brand equity. They still do a good job of measuring the scale of a brand’s market presence and the likelihood that the brand will make it into a given customer’s consideration set. However, they do a poor job of explaining the final purchase decision, and therefore do not provide a reliable measure of the brand’s ability to generate cash flow”.
In response to this, the basis for the final purchase decision has expanded from simply, “What will you do for me?” to, “What will you do for me — and mean to me?”
In this new era of digital-based empowerment and customer control, consumers are constantly evaluating and re-evaluating their purchasing decisions. They will choose the brands most relevant to their needs in the moment at an increasingly rapid pace. And they’ll pay a premium.
Accenture** has recently researched that in the U.S. market alone, companies are losing $1 trillion in annual revenues to their competitors because they are not consistently relevant enough. This finding indicates that the future of marketing — and, in the big picture, many businesses — depends on serving a customer’s most relevant needs in the moment. In this way, companies need to build and sustain symbiotic ties with their customers as if those relationships are with a concierge, butler, or friend.
Hence, brand equity needs to be measured in a way that captures the source and scale of this emotional augmentation that the brand provides to the underlying functionality of the product or service.
Brand Relevance is the new gold.
At Prophet, they believe that the strongest brands are the ones that are relentlessly relevant and are making a difference in consumers’ lives.
*Jonathan Knowles is an acknowledged authority on the role of brands in business strategy (known as “marketing finance”) – specifically on the topics of customer value creation, brand strategy during mergers, marketing accountability, and the analysis of intangible value. He is the Founder and CEO of Type 2 Consulting, and has a background in Finance (Bank of England), Strategy Consulting (Marakon Associates), Creative Brand Strategy (Wolff Olins), Brand Equity Measurement (Stern Stewart/Y&R’s BrandEconomics) and Brand Valuation (Brand Finance). His articles have appeared in Harvard Business Review, Sloan Management Review, the Wall Street Journal and other publications.
**Harvard Business review, March 21,2018