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Some seasoned marketers whom we know, truly understand by heart this decisive touch point in their industry. Many other marketers, unfortunately, have no idea which touches points to focus on.
Getting It Right
We have been trying to nd the solution and even test it to some of our more curious and experimental clients. We have been collecting data across industries as well to see patterns and search for insights.
We introduce new metrics called the Purchase Action Ratio (PAR) and the Brand Advocacy Ratio (BAR), which measures how good companies ‘convert’ brand awareness into brand purchase and loyalty (See Exhibit 1).
through the process continues to decline as they move into the next stage. People who like the brand must have known the brand before. People who purchase the brand must have liked the brand before. And so on.
Secondly, the path is a personal path. The only in uence to customers’ decision making as they move across the path is coming from companies’ touch points e.g. TV advertising at ‘Aware’ phase, salesperson at ‘Act’ phase, service center at ‘Act Again’ phase. This is within companies’ control.
Today is the era of connectivity. The global internet traf c has grown by a factor of 30 from 2000 to
2014, connecting four out of ten people in the world. According to Cisco (2015), we will see another ten-fold jump of global internet traf c by 2019, powered by more than 11 billion connected mobile devices.
In the era of connectivity, the customer path needs to be rede ned. It is no longer a straightforward funnel- like process and no longer personal. A new customer path must be de ned to accommodate changes created by connectivity. In a connected world, customer path is a 5A’s process: Aware, Appeal, Ask, Act, and Advocate (Exhibit 2). There are three essential shifts in the new customer path.
Exhibit 1 : Introducing New Metrics: PAR and BAR
PAR (Purchase Action Ratio)
Purchase Action Ratio (PAR) measures how good Companies ‘convert’ people who are aware of them into purchase actions.
Calculated as the number or percentage of people in the market who purchase the brand.
Calculated as the number or percentage of people in the market who spontaneously recommend the brand to others
BAR
(Brand Advocacy Ratio)
Brand Advocacy Ratio (BAR) measures how good Companies ‘convert’ people who are aware of them into loyal advocates.
Purchase Action Ratio=
Purchase Action Spontaneous Awareness
Spontaneous Advocacy Brand Advocacy Ratio=
Spontaneous Awareness
Calculated as the number or percentage of people in the market who spontaneously recall the brand when asked about a particular category.
Example:
From a population of 100 people in the market, Brand A is spontaneously recalled by 90 people and out of that 90. Only 18 people purchase the brand. The PAR for Brand A is 18/90 or 0.2. Only 9 people advocate the Brand. The BAR for Brand A is 9/90 or 0.1
Exhibit 2: The Redefined Customer Path in a Connected World
PRE-CONNECTIVITY ERA
A1 A2 A3 A4
AWARE ATTITUDE Shift
ACT ACT AGAIN Shift
#1
Initial appeal is influenced by the ‘community’ to determine attitude
#2
Loyalty is ultimately defined as Willingness to advocate a brand
CONNECTIVITY ERA AAA
1A
AWARE
5
ADVOCATE
Customers now actively connect, building ask-and-advocate relationship Shift
#3
Source: MarkPlus analysis
2
APPEAL
3A
ASK
4
ACT
We found that the PAR and the BAR are better measurements for return on marketing investments. For most industries, the biggest spending goes to raising awareness through marketing communications. The return, on the other hand, is twofold. The rst
is purchase action which translates to revenue. The second is advocacy which translates to growth.
How do companies increase their PAR and BAR? One way of getting better PAR and BAR is by improving awareness. More people who recall a brand mean bigger likelihood of the brand being recommended. But this approach is costly and has been forcing companies to ght for share of voice with high marketing communications budget. Alternative approach, which we prefer, is by improving the touch points across customer path from awareness to advocacy.
Rede ning Customer Path
In the past, customer path is simple. Let us call
it the 4A’s process: Aware, Attitude, Act, and Act Again. It is simple because of two things. First, it is a straightforward funnel-like process. Customers learn about a brand, like or dislike the brand, decide whether to purchase it, and decide whether the brand is worth a repeat purchase. The number of customers going
• In pre-connectivity era, individual customer determines his/her own attitude toward a brand. In a connected world, the initial appeal of a brand is influenced by the ‘community’ surrounding the customer to determine the final attitude.
• In pre-connectivity era, loyalty is often defined as retention and repurchase. In a connected world, loyalty is ultimately defined as willingness to advocate a brand.
• With it comes to understanding brands, customers now actively connect with one another, building ask-and-advocate relationship. Depending on the
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