Editor’s Note: Benchmarks are useful, but often used simplistically; a decision is made at some point to compare themselves on Metric A to Companies B, C, and D, and it goes on for years. As the business situation evolves, Metric A may no longer be a critical market for business prospects, and Companies B, C, and D may no longer be relevant. One of my favorite CMOs to consult for would regularly ask me which companies faced a similar situation to what his company faced, and what they did about it. His benchmarking was flexible, depending on the issues. Here, Fiona Blades gives us a mature discussion of how to think about benchmarks, and how to use them.
Benchmarks are an important part of our decision-making. However, pick the wrong benchmarks, or contextualize them misguidedly, and you risk making the wrong decisions.
What Benchmarks Should We Put in Place?
In the marketing context, our metrics are often not as ‘hard’ and certain as sales and revenue, which can be frustrating. Often marketing is demonstrating how it contributes to these metrics through well-established measures like brand consideration. But over the last 10 years, clients have been questioning brand consideration. One approached us because their media agency could find no relationship between brand consideration and sales in their econometric modeling. When tackled from an individual, rather than aggregate level, we found a strong relationship – people considering the brand at the start of the buying process often ended up buying it. However, the buying process varied in length of time meaning that the relationship was lost when looked at in aggregate.
Looking at consideration by occasion can be highly illuminating. For another client with a brand leader, we could identify specific occasions, growing in importance, where competitors were winning out. Yet this was masked when consideration was asked in a more traditional way.
Don’t underestimate the power of having benchmarks that your organization understands. Two clients have approached us about NPS. The link between NPS and advertising is often weaker than brand consideration and advertising, but if everyone else in the company is following this goal, there is something to be said for marketing joining in. The trick here is to understand how marketing can best influence NPS. It is difficult for people to recommend a brand they have never tried, so we need to separate out users and non-users. The marketing task with users was to keep them loyal and increase advocacy. For non-users, it was to gain trial.
A one-number score can be very helpful. But it is important that this can be dissected to understand what is influencing this. MESH created a Marketing Impact Score for one client. We had been capturing people’s experiences with their brand and others in the category for a number of years in real-time. These included paid, owned and earned experiences. We isolated the paid experiences (what people picked up and reported). The resulting score consisted of Experience Reach and Experience Positivity and Persuasiveness. So, if a brand spent more money on its marketing activity Experience Reach was likely to increase, and if the quality of the activity improved, Experience Positivity and Persuasiveness increased.
Creating new benchmarks can reveal fresh insight. In 2007, Unilever wanted to benchmark Lynx with other cool brands like PlayStation and Nike. When we captured people’s brand encounters Unilever was able to see how brands, like PlayStation, relied less on TV and more on experiential and online.
Clients have had campaign benchmarks for years, but these can often miss the context of competitive activity or real-life situations. In a retail banking subscription study that we have been running for over a year, we can see that Nationwide poetry ads can work well in the cinema, where people have time to pay attention to the creative. However, they can be annoying and dismissed when someone is busy getting the meal ready for dinner and the TV ad is on in the background. This contrasts with other ads, like TSB, where simplicity is the key and even making dinner, the music is picked up positively.
Whatever your benchmarks make sure you have a process set up in advance to avoid wasting time. “Only take action if consideration goes down by x%. If it does, take the following steps…” If you don’t, you may waste time debating insignificant results.
What to Consider
Benchmarks are a fundamental part of our decision-making framework and with the wealth of data available today and new ways of capturing data that give us a clearer view through the eyes of the customer, there is no excuse for not using multiple sources to make quicker and better decisions.
- Choose benchmarks carefully to have resonance in your organization, link closely to business outcomes and enable quick and confident decision-making.
- Introduce new benchmarks to unlock fresh insight.
- Consider new framing and contexts to avoid poor decisions.
- Try to get as close to the real world rather than artificial lab data.
- Develop a robust decision-making process around decision-making to avoid wasting time.