Your target goal is to achieve a market share of X (whether it be 15, 25, 35% or more) by Y-time. Beyond receiving your weekly (or daily) sales results, and a share report from a custom or syndicated data source, do you know what it takes and if you’ll achieve the target sales and market share goals?
The aforementioned is a difficult question that gets to the heart of your understanding of what drives the business and explains the performance of your brand and, importantly, your ability to manage it effectively. Once you’ve identified the key data points that correlate with and, in some cases, serve as lead indicators to sales and market share you need to find a way to collect the data, display it on a brand performance dashboard, track it, analyze performance and take action where appropriate.
This is Part II, the final installment to creating a Brand Performance Dashboard for marketing success. (If you’d like the complete article click here …..)
Creating A Brand Performance Dashboard
The Brand Performance Dashboard captures those SMART (Specific, Measurable, Achievable, Relevant and Timebound) causal factors that impact sales and market share. They’re pretty similar from one sector (e.g., consumer, pharmaceutical and medical devices) to another, although they may be labeled differently, and have been touched upon in the case histories presented in Part I. In Part I we addressed brand availability and target-customer awareness. Here are additional causal factors for your consideration in developing your Brand Performance Dashboard:
• Conversion Rate – This refers to the percentage of the customer target who are aware of your brand that will actually purchase, prescribe or use it. For example, if you have a 70% level of awareness and a 20% conversion rate then 14% have purchased, prescribed or used it. (This may, in some organizations, be considered “penetration.”) As distribution and awareness levels rise so will the number of target-customers who will engage with the brand; however, the actual conversion rate typically declines per point of awareness and distribution growth beyond a certain point.
The conversion rate gets at the productivity of you positioning strategy and messaging. It will vary based upon the distinctiveness of your positioning and persuasiveness of your messaging. That’s why we push for a highly emotive Brand Idea and compelling Campaign Idea that delivers relevant, meaningful differentiation to drive conversion rates. It’s also why we need to be precise with our targeting as the same Brand Idea and messaging will not appeal equally to everyone who, in the words of Simon Sinek, “needs what we have.” In other words, we can expect a significantly higher conversion rate among a select customer segment who believe what we believe and appreciate our value-proposition than from other segments in the marketplace.
Another way to look at conversion rates with sales force driven organizations is the number of sales calls to achieve the SMART customer behavior objective. If the sales force typically needs 9-calls on the customer to achieve the behavior objective the goal should be to reduce this to fewer calls. This will have an impact on the Growth Acceleration Rate (GAR), yielding more sales in a shorter span of time, providing additional revenues for reinvestment or to capture on the bottom line.
One might measure the conversion rate by measuring penetration against awareness via an awareness, attitude and usage study. However, this is after the fact – results of our efforts. Instead, we should measure the impact of our messaging before we employ it. This can be accomplished through marketing research such as concept and message testing services.
• Repeat and Depth of Repeat – Despite the nomenclature one purchase, prescription or usage does not make for a conversion. It takes repeat actions from the target-customer. We need to know what percentage of customers who engage with the brand stay engaged (“repeat”). We also need to know how frequently they repeat in a given time period (“depth of repeat”). This gets at loyalty and, for consumer-patients, compliance (do they take the drug as directed by labeling) and persistency (stick with the regimen for the duration as directed by labeling and the HCP). It aids in our ability to forecast and sales and market share performance.
Poor repeat purchase rates could very well suggest a product problem or overpromise. It may be a function of poor price-value relationship versus competitive offerings. Or it may reflect a reduction in support for the brand (i.e., out of sight out of mind). It is a prime indicator of the health of the brand.
We can get at repeat and depth of repeat levels through home use tests for CPG brands, surveys for HCP and consumer-patients, and sales force reporting (where appropriate).
Brand Performance Dashboard Summary
Here’s a full summary of key causal factors impacting sales and market share performance that you should consider incorporating into your Brand Performance Dashboard:
|Performance Area||Purpose||Dials to Read||Instruments|
|Availability||Check availability and quality of availability||· Retail Distribution – % ACV (All Commodity Volume) for appropriate segments (e.g., grocery, pharmacy, mass merchandisers, etc.)
· Quantity (e.g., % Shelf Facings, # of SKUs, etc.)
· Payor Access – % Patient Coverage, and formulary placement
· Warehouse/Wholesaler Distribution – % ACV
· Retail/Wholesaler inventories
· Training of Surgeons – # and % of target to perform procedure with product
|· Syndicated & Custom Research Reports
· Retail Store-Checks
· Sales Force Reports
|Awareness||Determine message coverage, particularly to prime prospects, and if in target-customer’s (T-C’s) “evoked set”||· Top of Mind Awareness – % T-C segment
· Aided Awareness – %
· Reach (%) & Frequency (#) of messaging by segment
· Share of Voice (SOV) by segment vs competitors
|· Syndicated & Custom Surveys (e.g., A, A &U)
· Sales Force Call Reports
|Conversion Rates||Gets at productivity of messaging and appeal of Brand||· % Conversion among Aware T-Cs
· % Utilization (for legitimate occasions/ patients
|· Syndicated & Custom Surveys
· Concept Testing
· Message Testing
|Repeat Rates||Determine level of satisfaction with the Brand||· % who purchase, prescribe or use who repeat their behavior
· Transaction size (e.g., 30-day versus 90-day supply)
|· Home-Use Tests
· Custom Surveys
· Sales Force Reports
· Clinical Studies (i.e., for dropouts)
|Depth of Repeat||Identify loyalty to the Brand||· # of times repurchase in set period and duration
|· Custom Surveys
· Sales Force Reports
Other Important Measures
In addition to the aforementioned causal factors that impact sales and market share results there are other important diagnostic measures you might want to include. These are a few for your consideration:
• Growth Rates – Specifically, what is happening to the rate of growth of penetration, sales and market share development, etc.? Is the growth rate consistent with sales and market share target goals?
• Absolute and Relative Performance – How is the brand doing versus other company and competitive brands? What about performance versus expectations for a given period? Current versus previous period?
• Source of Volume – This is particularly important for Target-Customer behavior segments. Are we generating the switching and/or trade-ups or compliance (or whatever behaviors we seek) that we expected for the segments we selected?
• Geographical Performance – How are we performing by geographical area – country, state/county, promotion area, sales district?
• Sales Force Feedback – The sales force operates in the marketplace and, as such, is closer to the Target-Customer. We’ve found it helpful to talk with key sales personnel, whose experience and insights we value to help address what is behind many of the numbers in the Brand Performance Dashboard, and beyond. We find it very helpful to gain insights into those customers they call upon who are: Aware – Non-Triers; Trier – Acceptors (i.e., repeat) and Trier – Rejecters (i.e., did not repeat) to understand what drives their attitudes and behaviors.
When to Measure
When you measure is going to depend upon the lifestage of your brand. If it is a launch brand you may very want to measure weekly progress on retail distribution and access, sales force call reach and frequency, reach and frequency of media messages, and conversion rates. You may want to measure other factors on a bi-weekly and yet others on a monthly basis. For existing brands, monthly measures may suffice for some of the causal factors while other may extend to 6-months to a year or beyond (e.g., awareness, attitude and usage study). This depends how you are going to use the information, costs, etc.
During our time at Procter & Gamble we conducted an awareness, attitude and usage study every two weeks for an introductory brand – albeit in a market where household (HH) category penetration was around 95% and consumers purchased the category weekly. In other words, one must measure consistent with when reliable data becomes available. (For a category with a longer purchase cycle 2-weeks may be insufficient time. And, it penetration is low for the category, as in many therapeutic areas, it may be prohibitively expensive to do an A, A & U Study more frequently than annually. In this latter case other tools – such as syndicated studies, need to be found.)
Finally, the measurements must be made available consistent with critically important reporting periods. In our first case, the measurements for the critical bi-monthly period needed to be available prior to the release of the Nielsen report. If you have quarterly reviews with senior management then you must have completed analysis of your dashboard prior to reporting on sales and market share performance.
Now it’s up to YOU!
It’s not enough to report sales and market share results! We need to be able to understand what led to those results, which requires us to identify and measure causal factors. It’s the only true way to understand the business and what makes it tick. Importantly, if we want to achieve sales and market share targets we will need to establish expectations for specific causal factors and manage to their achievement.
So, identify your brand’s causal factors and customize your Brand Performance Dashboard to drive to marketing success.
Best wishes for marketing success,
Richard Czerniawski and Mike Maloney