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What is your Brand Image & What does it Stand for? Ten Steps to Perfect Brand Image Following

Do you want to improve your brand image or that of your company? Silly question; of course you do. Who doesn’t? But do you know how to do so? The first essential is knowing where you are, before you can identify how to get where you want to be. If you are interested in some tips on how to improve your own image following then read on.

I was recently contacted by a company that needed help improving its image. They had already started conducting market research but realised very quickly that they needed more than that. I reviewed what they had already done and the next steps they were planning and I was extremely happy. Not because of all the work in progress but rather because they had called me in. I was able to save them both time and money, as well as considerable effort in all the low value-added work they were doing and planning.

From that experience I came up with the following ten point plan for all companies wishing to improve their brand and company image.

What is your image today?

Magnified customer with a great br and imageThe company I referred to above had already started doing market research to measure their image. Unfortunately what they were doing was going to be of little if any use to them in setting the baseline of where their image is today. This is what they should have done:

#1. Identify the most important attributes on which you want your brand to be measured; remember to include rational, emotional and relational items
#2. Add the major attributes associated with your most important competitors
#3. Run a quantitative measurement using these attributes
#4. Analyse images amongst different category user groups

These first four steps will help you identify exactly where you are today and how your image compares to your competitors.

What do you want your image to be?

Happy man with a great br and imageOnce you know where you are, you need to identify what changes you would like to make. Are some of your desired image attributes weak, whilst others which are of less importance are (too) strong?

#5. Identify the similarities and difference between your brand and its major competitors
#6. Choose a maximum of three changes you want to make over the next year; it is unrealistic to try to impact more and three will already be a challenge, even with an important communication’s budget

How are you going to change your image?

Man with TV advertisingOnce you have decided on the three attributes you want to build, identify how you are going to strengthen them. Identify:

#7. Which media and shopping habits do your user group have and how do they fit with your current activities?
#8. What is the overlap with your major competitors and are there any gaps from which you could benefit to make your budgets go further?
#9. Plan your improved communications and shopper marketing plans
#10. Plan a new image measurement

These are the ten simplified steps to measuring and following your brand / company image. By following them you will get a solid basis on which to build a better image.

I would like to add one additional comment on corporate branding. If you have more than one brand, it would be important to continue with research into the fit between brand and corporate images. Your image might be exactly what you want it to be, but if there is a mismatch with your corporate brand image, this could damage both in the long term.

How many of these steps do you do and are there any you ignore? Why? Do you include further steps during your own process? If so I would love to hear what I’ve missed; just drop me a comment in the box below and I’ll respond right back.

Improving the ROI of Information Investments

If you have ever worked in a typical organisation, you will have almost certainly been under pressure at times to reduce budgets. Each time this happens, market research and information gathering tend to be one of the first areas to be cut. After all there doesn’t appear to be a negative impact on sales, so its Return-on-Investment is questioned. Sound familiar? Then read on.

Unlike advertising and communications to your customers, information gathering does not have an obvious link to sales, at least in the short term, so it is the first target many managers choose when looking to reduce costs. If you are tired of having to constantly defend your budget then I have some ideas to help, so that next time someone comes looking for money, it won’t be from your budget.

#1. Take your (internal) client’s perspective

What is the boss getting for his / her money? If you reply lots of data and information, then that is the reason your budget gets cut. People who have problems don’t want data they want solutions. Therefore don’t provide nice tables and graphs, but rather a story to inspire the changes you recommend, based upon your findings.

#2. Review your methods

Are you still doing the same type of information gathering that you’ve done for the last five, ten or even more years? If so then it is time to review your methodologies, questionnaires and reporting. The world is changing fast and you can’t expect the questions you developed years ago remain as relevant today as they once were. Take a look at your customers and see how they have changed and what needs to be measured today. That way what information you do collect is likely be in areas that are new to the organisation and thus invaluable.

#3. Review your reports

Another habit we can get ourselves into is to continue to produce the same old reports with the same KPIs, graphs and tables. Or sometimes even worse, as I once sadly witnessed in a major FMCG / CPG; the reports just kept getting bigger and bigger as more and more information was added. It got to the point where management woke up to the fact one day and (rightly) cancelled the whole report!

As with methodologies, your own reports need to be regularly updated. What are your own clients really using out of everything you circulate? You may be disappointed to see just how little they use. If they are not reading / reviewing everything you send, then stop sending it. When you get over the shock, you will be happy to have more time to develop more useful analyses. After all, the main reason we get locked into habit is that we don’t have time to think!

#4. Review your costs

Are you working in a regional or global organisation? If so, has your company negotiated discounts for multiple purchases of their different external reports and analyses? Many suppliers are open to providing a discount for a st andardised report or mass purchases of regular reports they produce. However they won’t offer them if they find unnecessary multiple purchases, why should they? You have to ask for them.

#5. Review your value

With the above four points you may be able to avoid a budget cut next time, but you need to also prepare for future crises. Review what value you provide and admit honestly whether or not you would pay what you cost your organisation, for the information and insights you provide. If not, then act quickly before someone else realises this too. Find out what your clients need and provide more of it. Perhaps even more importantly, find out what your clients may need in the future and are maybe not yet aware, and pre-empt their request by offering it. That will certainly impact your value and their appreciation.

If you follow these five tips, then you have a good chance that your budget will not be cut next time your manager has to make a cost-cutting exercise. Have other tips to add? Please add your comments below and also share these with your colleagues. They will appreciate your foresight.

Let’s discuss how we can help you achieve a better ROI on your information investments; contact us today and check out our website: https://www.c3centricity.com/vision

C³Centricity uses images from  Dreamstime.com  and  Kozzi.com

13 Marketing Quotes to Inspire Customer Centricity

The end of a year and the beginning of a new one is a great time to consider what changes you need to make in your marketing.

What habits have you become so comfortable with that you don’t even notice or question them? With today’s fast-paced world, business needs to be constantly adapting and preparing for the future.

These thirteen (plus a bonus one!) marketing quotes are amongst my favourites of the moment and will hopefully inspire you to consider what changes you need to make in the coming year to become even more customer centric.

#1. “There may be Customers without Br ands, but there are no Br ands without Customers” Anon (>>Click to Tweet<<)

This has to be the most important marketing quote to remember for all of us wanting to be more customer centric. Br ands depend upon customers and if companies remember this, then they can only succeed. If however they get so tied up in their products & services that they forget their customer, they may enjoy their work but their br ands will always be vulnerable to competition.

#2. “Nothing can add more power to your life than concentrating all your energies on a limited set of targets” Nido Qubein (>>Click to Tweet<<)

One of the biggest mistakes marketing can make is to not appropriately define its target audience. It is underst andably hard for a br and manager to accept that he can’t please all category users and that his target sub-category is smaller than the total category he thinks he could attract. By trying to please everyone, we end up pleasing no one, so bite the bullet and reduce your target category size by more precise audience selection. More on targeting HERE.

#3. “The more you engage with customers the clearer things become and the easier it is to determine what you should be doing” John Russell, President, Harley Davidson (>>Click to Tweet<<)

If it isn’t already included, then every employee should have customer connection added to their annual objectives. Whether they are the CEO, an Executive Vice-President, a machine operator, sales clerk or br and manager, they all need to underst and how their day job impacts the satisfaction of their customers.

#4. “If you use st andard research methods you will have the same insights as everyone else” David Nichols (>>Click to Tweet<<)

When was the last time you revised your market research toolbox or refined your insight development process? It’s a rapidly changing world both technologically and societally-speaking. The methods you use to observe, underst and and eventually delight your customers should be moving as fast, if not even faster, to stay in touch with the market. If you are interested in a 1-Day Catalyst session reviewing all your methodologies and metrics contact us HERE.

#5. “The structure will automatically provide the pattern for the action which follows” Donald Curtis (>>Click to Tweet<<)

There has been a lot of discussion about the new roles of the CMO, CIO and the creation of a new CCO (Chief Customer Officer) position. Perhaps it is time for your organisation to review its structure and see if it is still optimal for the business of today, as well as of tomorrow. As mentioned above, the world is changing rapidly and you need to keep abreast of these changes to stay in the game. Who wants to find themselves the equivalent of the Kodak of 2013?

#6. “Customer Service shouldn’t be a department, it should be the entire company” Tony Hsieh, CEO Zappo’s (>>Click to Tweet<<)

This is one of my all-time favourite quotes from a man I truly admire, for truly “getting” customer centricity. Their slogan is even “Powered by Service”! As already above, every single person in a company has a role to play in satisfying the customer. Zappo’s have an integration program for all new hires – including the EVPs – that includes time at their call centre answering customer queries. What a great way to show a new person what the company is really about. Why not start a similar introduction in your own company?

#7. “The real voyage of discovery consists not in seeking new l ands but seeing with new eyes” Marcel Proust (>>Click to Tweet<<)

Today’s customers are very dem anding which has prompted many companies to increase their innovation and new product launches. However, it has been shown that renovation is as important as innovation in keeping customers satisfied (find link to relevant articles HERE). Instead of forcing your marketing and R&D to meet certain percentage targets, most launches of which will be destined to failure according to latest statistics, why not review your current offers with new eyes? If you truly underst and your customers, you will quickly find small changes that can make a significant impact on customer satisfaction and loyalty, when you take their perspective. And as an added bonus, if it solves a frustration of theirs, it might even bring you increased profits, since the perceived value will be higher than the cost.

#8. “A br and for a company is like a reputation for a person. You earn reputation by trying to do hard things well” Jeff Bezos (>>Click to Tweet<<)

In the past most companies were more concerned with the reputation of their br ands and forgot that of the company, other than with investors. As consumers become interested in knowing and adhering to the policies of the companies behind the br ands, it is vital to manage both from the customer perspective. In addition, if your company is the br and, will be closely associated with it, or you are considering adding it more prominently to your packaging, then this becomes vital to follow.

#9. “The journey of a thous and miles must begin with a single step” Chinese Proverb (>>Click to Tweet<<)

Today’s customer often has a more complex path to purchase in many categories, so thinking of the simple awareness to loyalty funnel becomes less relevant. In order to underst and the purchasing of your br and, think information integration, as customers are becoming as savvy about products as they are about themselves. They seek out information, usually in relation to the size of the budget they will spend, and take the time needed to make what they consider to be an informed decision. Check whether you are in every relevant touchpoint with appropriate information for them.

#10. “However beautiful the strategy, you should occasionally look at the results” Winston Churchill (>>Click to Tweet<<)

If your world had changed then so should the metrics you use to manage the business. The new year is a great time to review last year’s business results in comparison to the metrics you have been following. Were you correctly assessing the environment, the market and customer behaviour? If not, perhaps you need to redefine your KPIs.

#11. “The fear of being wrong is the prime inhibitor of the creative process” Jean Bryant

Do you embrace entrepreneurship in your organisation? What happens when someone fails whilst trying something new? The more accepting you are of relevant trial and error exercises, the more likely your employees are to share their more creative ideas. If failure is punished, then they will be reluctant to try or even propose new things and your business will stagnate. This is a great time to review your ways of compensating creativeness as well as how you share learnings from failures?

#12. “Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information” T S Eliot

Do you ever take decisions based on information or knowledge? If so then perhaps you should reconsider your insight development process. Whilst information and knowledge are essential to deeper underst anding of your customers, it is only when you have integrated everything you know and underst and about them, that you can begin to develop insights that will positively impact your customers’ behaviour.

#13. “If you can’t sum up the story in a sentence, you don’t know what you’re talking about” Garr Reynolds

How about making 2013 the year that you moved from PowerPoint presentations to Prezi storytelling? Even if you remain with whatever software you are currently using, taking the decision to share information and underst anding in a new way through storytelling, will have a profound impact on the way your employees think and remember the essential underst andings of your customers.

Finally, if you take only one message out of all these suggestions,  I hope it is this one, which to quote Charles Darwin is:

“It is not the strongest of the species that survive, nor the most intelligent, it is those most responsive to change”

2013 is going to be a year of considerable change for us all; let’s manage it rather than just suffer its impact.

If you have your own favourite quote that inspires you to change your business practices in 2013 , then please share it below. We would love to hear your own inspiration.

For even more inspiring quotes, why not check our website; they are regularly updated: https://www.c3centricity.com/library/

C³Centricity uses images from Dreamstime.com and Kozzi.com

 

Choosing the right marketing ROI metrics

If you work in marketing and are being challenged by management to demonstrate that you are an investment and not just a cost to the business, then this post is definitely for you.

Marketing is coming under a lot of pressure these days; it is being asked, no dem anded, to demonstrate the ROI of their investments. With the explosion of information readily available from social media, this has become even more pressing. In response, marketing is showing how many “Likes” they have on Facebook, or how many fans they have on their br and pages, but are these effective and relevant measures of marketing success today? I doubt it.

As mentioned a few weeks ago, marketing is no longer (just) the creative arm of business (you can read that post here); – it is now also heavily involved in data integration and analytics, with the need to befriend the IT department to manage all the information.

This is a truly exciting time to be in marketing, especially because of all these changes. However change also brings its own challenges and many in marketing are feeling the need, if not obligation, to defend their budgets, whether stable or increasing. This is due to the many opportunities for what many see to be “free” media on the web, so I thought it would be useful to review what marketers can do to ensure they continue to be viewed as the essential predecessor of sales that they are in reality.

“Everything that can be counted doesn’t necessarily count; everything that counts can’t necessarily be counted” Albert Einstein

According to the Lenskold Group’s 2010 B2B Lead Generation Marketing ROI Study, most marketers don’t know what impact a 10% increase or decrease in their budgets would have. Therefore if the CEO is looking for money, you know where he’s likely to go; if marketers can’t defend their own budgets, who will?

One of the biggest challenges faced by marketing people is that they don’t all speak the language of business. CEO’s and CFO’s are interested in sales, margins and profits, so there is no point in speaking to them about increasing awareness or the number of clicks on your latest website or ad – unless you can say what impact these increases will have on the business.      

I think that the main issue with calculating marketing is that too many marketing plans are still being developed based upon those of previous years, without too much thought going into what the objectives of each action are specifically. How many times have you been asked why your br and is running three new ad campaigns this year and the reply is “because we ran three last year”!

If you or your organisation is likely to reply in a similar fashion, here are three tips for you to consider:

#1. Plan the metrics when you plan the actions

Marketing are often found scrambling to prove why their budgets should not be cut half-way through the year, when the CEO is looking for money. Unless you know what the results of your actions are likely to be, as well as best case and worst case scenarios, which means you have already thought about the outcomes and metrics, you are unlikely to be able to defend your continued spending when times are tough.

Defining the metrics doesn’t mean finding the easiest way to measure your actions, but the way that will produce the most relevant metrics to show their impact on sales and profit. Thus although advertising does impact awareness, it is only when the awareness level is linked to trial and purchase does it become relevant from a business perspective.

#2. Aim for foresight rather than “eyesight”

There has been a lot of talk about developing insight in recent years, but I think it is even more valuable for business to develop foresight. Most market research studies measure what is happening at best and often report what happened in the past, since the results are presented weeks if not months after their recording.

To be effective you need to get more comfortable with hypotheses and considering likely outcomes of your actions, in order to know when you need to ask for more budget or when you might even return monies if your actions are not delivering the expected results. No CFO will reduce budgets next year just because you didn’t use all your money this year, if they can clearly underst and how you came to the decision concerning the required investments and the likely results.

Another point to consider is to run test and learn exercises, which will save time and provide metrics on which to base your hypotheses, when the test is compared to a control group. CFO’s love numbers and comparisons are even more likely to meet with approval of your dem ands.

#3. Think quality not (just) quantity

Marketing is usually happy to report on the number of contacts made at an event, or the number of people remembering an ad campaign, when in many cases increases in these contact / recall numbers don’t mean an equal or proportional increase in sales. So unless you know exactly the relationship between the two, find a more meaningful metric for the business.

Management always has too much to read and review, so keep the metrics to a small number, three to five should be sufficient. Since marketing directly impacts sales, the effectiveness KPI’s chosen should be a collaborative decision of the two departments concerned. Whether your organisation is used to working with a sales funnel, a path to purchase or a decision journey, choose metrics that can be measured in a consistent way along it and thus also followed over time.

And one last word of warning; link your metrics to outcome not to spend, which is the easier and oft chosen one. Of course a CMO will be following many more than 3-5 metrics of the marketing activities, to ensure the budget split is as effective as possible, but the CEO will not need to see them all.

These are just three tips to help marketing defend their budgets through appropriate measurement; what others would you add?

For more on KPI’s please see our C3C Solution on our website here: https://www.c3centricity.com/home/underst and/

C3Centricity.com uses images from Dreamstime.com

Time to Spring Clean your Market Research Toolbox

This week we are officially into Spring in Europe, so we all now start thinking about spring-cleaning the interiors of our houses and apartments. Of course living in Switzerl and, where people seem to be born with duster and brush in h and, I can imagine that there is not much work for most of my neighbours, but I have to admit that for my place it is a slightly different matter!

This is the reason why today I want to speak about YOUR interior, however I am not talking about your home, but about your Market Research Toolbox. When was the last time you took a look inside? Isn’t now an appropriate moment to review the tools you have in there? Some may be a few years old and need updating, whilst you may now notice that some others are missing that you really need. If this is the case, then this post will help you to do your toolbox spring clean.

In order to decide on all the tools you need, I suggest you start by taking a look at your br and essence. What do you want your br and to st and for in the hearts and minds of your target customers and your stakeholders? Who is your target customer; what attributes describe your product or service; what is your br and’s personality and character, and finally what benefits can your target customers expect from your br and? Once you have these identified, you need to agree what measures you will use to ensure that you follow them effectively and efficiently.

The 5Ps of marketing have been around long enough to assume that many people still find them to be useful, so we will base our review of your toolbox around these five topic areas, keeping your br and essence in mind of course.

Here are some questions I came up with, to help you to identify whether or not your toolbox needs some cleaning or updating:

People:

Who is your br and or service targeting? To underst and, you will need to gather representative data on your users, current, past and potential, and not just demographics, but as much information as you can gather about their habits, attitudes, preferences, values and motivations.

Price:

Are you pricing your br and based on cost or value? What do your current, past and potential customers value and what price estimate do they place on your offer? What are the psychological price barriers for your category and br and? Where is your price in comparison to your competitors’? If it is higher, what additional value are you offering to warrant the difference?

Promotion:

How effective are your communications? What tools do you have to help in their development and to test their performance; not just at the end before airing, but also early on in the process of their creation? What do your category users talk about online? Are you gathering information on and responding to these discussions? What promotions and rebates are you offering and what do your target customers think about them? What is their impact on purchase and loyalty? What is their ROI?

Place:

Where do your current and potential customers expect to find your br and? What is your level of distribution in these channels, as well as that of your competitors? Do you have out-of-stock? Where, when? What is the estimated sales loss due to a gain or loss in distribution? Are there new channels developing or others that are losing in popularity? Are you also selling online? Should you be?

Product:

How does your product or service perform in the market? What changes have been made to your own as well as to your competitors’ offers recently? What changes are important to make and which do your target customers value less? What are your customers’ pain points and how can they be reduced?

If you have information and answers to all of these questions, then your MR house is in order and I can only congratulate you. If not, then perhaps it is time to update your toolbox with newer, better tools.

Do you Spring clean your toolbox every year? If not, perhaps you should. The world is changing fast and what worked in the past, even just a year ago, may need to be tweaked or replaced today.

For more on identifying KPI’s and performance metrics please check out our website here: https://www.c3centricity.com/home/underst and/

What changes have you identified as being needed in your own toolbox? It would be great to compare our spring cleaning efforts!

If you need help in running your own Market Research Toolbox review, C3Centricity offers a 1-DayCatalyst intensive but fun session, working with your team to identify priorities & necessary changes in your processes. Contact us here for an informal chat about it.

C³Centricity uses images from Dreamstime.com

Are You Sure You Know Who You Really Are?

Earlier this week I was discussing with a client about Br and Image and Equity. “Oh we don’t need to worry about that!” he told me confidently. “We know exactly who we are and what we st and for; look, here is our br and framework” he continued, h anding me a very impressive sheaf of paper. 

Whilst I was certainly impressed with the organisation of the document and its contents, I had a niggling doubt in the back of my mind. “This all looks really complete” I responded, “Is this what you want the br and to st and for, or is this what its image is currently?” I asked. “That’s the same thing isn’t it?” he responded!

OK, OK, so you saw that coming didn’t you? But it still amazes me how many companies spend time developing these frameworks, including relevance and differentiation, br and promise, br and personality, etc. etc. but in fact have never measured whether or not their content is actually what they st and for in the hearts and minds of their customers! Therefore, I thought it would be useful to summarise what you need to know about your br and and not just what you have decided you want your br and to be.

 

1. Awareness

If people don’t know about your br and or service, then they can’t buy it, so you need to start by measuring how your awareness is moving. Hopefully it is growing, but you need to look at top-of-mind (first mention), spontaneous as well as prompted awareness, and amongst your target audience, not (just) a representative sample of category users, especially if yours is not a category that everyone buys.

Of course if you haven’t even identified to whom you are selling, then stop reading and go to the post on targeting that we published a while back; you can find it here. Awareness should be measured regularly, as it will be impacted by your marketing actions, promotions, communications, events etc.

2. Image

Once you know how many people have heard about what you are offering, you need to measure what they believe it is. Whilst you may have identified what you want your br and to be, this may not be the same as what your customers perceive it to be. They will have made up their own minds based upon what they see, what they experience and what they hear from friends, families or your own communications, as well as those of your competitors.

Whilst it is a good idea to measure the attributes with which you want to be associated, it is important to also measure some attributes you believe are particularly relevant for your major competitors, as well as those of the category itself. These latter metrics will help you identify the “price of entry” into the category and whilst not providing any competitive advantage, can seriously harm your br and if yours is weak on any of them.

Although image can fluctuate a little, in line with your marketing actions, your base image is slow to move, certainly slower than most marketers would like it to. Therefore, unless you are in an extremely active category, are being attacked by an agressive competitor who could weaken your image, or have made significant changes to your communications’ content or frequency, annual measurement is usually sufficient.

One other tip about br and image; changes to it are usually a pre-cursor of market share changes, so this is definitely an important KPI to keep updated.

3. Value

The measurement of your image should include perceptions of its value for money, especially compared to its major competitors. However, in addition, it is also useful to run a separate pricing study, especially if you are looking to raise or lower prices, as a result of changes in the competitive market or commodity prices.

In the past, the most common way of looking at the price of a product or service was to take its cost of production and then add on a percentage for margin. Today, it is essential that you start with your customers, underst and how well they value your offer and whether or not they are willing to pay more than the cost, in exchange for its perceived benefits. I am constantly amazed at how many companies still work with cost-based pricing strategies, leaving thous ands, if not millions on the table. However, since value can be impacted by so many external as well as internal factors, it needs to be regularly measured, certainly more often than image.

4. Personality

Every br and today is trying to build a relationship with its customers. In order to do this, it must ensure that its personality and character are in line with its target audience. This doesn’t mean that it should be the same; rather it should complement or complete that os its customer as this is what provides the reason to to buy. As with image, personality builds up slowly over time, through all the communications, events and promotions you propose. Therefore an annual measurement should be sufficient.

5. Satisfaction & Loyalty

I mentioned earlier that people won’t buy what you offer if they don’t know it and the same goes for its image, value and personality if they are not well perceived. The fifth metric to underst anding your br and is to review its overall satisfaction and loyalty levels. If these are lower than the category average or than you would like, then something in the mix is under-performing and you will need to identify what that is. Some categories with little differentiation may have lower levels than those with few br ands with larger differences, so no absolute number can be proposed here. However, comparing your levels to those of your major competitors, or to the category average should tell you what you need to know.

Which brings me to my final thoughts on image metrics; always make comparisons with your category and competitors rather than looking in isolation at your own numbers and their growth or decline. As with sales, it is share or their relation to others that holds the real truth.

Do you have a question or challenge about starting, updating or harmonizing your br and equity measurement and metrics? I am sure I can help; just contact me here  and I’ll respond personally.

How do you follow what your br and st ands for? What metrics do you use to ensure you know how your br and is perceived by its current or potential customers? I would love to hear your own additions to this list.

For more ideas on br anding please see our website: https://www.c3centricity.com/home/engage/

C³Centricity sources images from Dreamstime.com

 

How to choose your KPI’s

Your business plan should include for each br and or service, who you are targeting, as well as what actions you are going to take in the forthcoming period.

Measurement of how well you are doing against the plan is essential and should include metrics beyond the basics of sales and profit. Are you one of many companies I know, who rely on sales alone, look to grow by 5%, 10% or more, and measure success by achieving these set levels? What is wrong with that you might ask? A lot!

 

Suppose you are in a category or market that is growing at 50%, 100% or more per year, as is the case in many industries in developing countries around the world. This 5% or 10% growth target now looks pretty low, doesn’t it? In fact if you grew sales above the target set in the plan, at say 20%, it would still mean you were losing share! So you need to add market share to your metrics for a start.

 

Choosing the right metrics

Choosing the right metrics to follow the business is vital for management and planning success:

“what gets measured, gets managed”

as Peter Drucker famously said. It is very true that you need to identify the metrics that are key to your business, in order for you to manage it well. Too much information and their impact is diluted; too few and you may miss valuable performance indicators.

 

Three things to consider when setting up business KPI’s

  • Performance: we have already seen the importance of following market share in addition to sales and profit. Another set of metrics that all companies should follow is br and image and equity, since these act as early warning signs should something be going wrong, and this usually long before sales start to stagnate or decline. In addition to these, other metrics need to be identified that are important for your industry.

For example, I asked this question to IMD Alumni on LinkedIn recently and got the following suggestions:

    • Safety, Health and environment for energy and mining industries
    • Employee satisfaction and engagement
    • Performance metrics such as deal closing or conversion rates
    • Impact of policies of the government sector
    • Comparative metrics of competitors
    • Innovation rate
    • Stocks and inventories, especially in emerging markets

 

  • Metrics: Agreement of the most important metrics to follow for your own organisation should be the result of internal discussion. Alignment with all departments and businesses, on both the metrics themselves and the way in which they are to be measured, is vital to the overall success of the exercise. The method used for gathering the information must be valid for each business, category and market, which can be a challenge if they are to be compared. If they are not comparable, then proprietary metrics can be defined for each of them. However, as management should have a holistic view of the company’s performance, the key metrics or KPI’s should ideally use the same collection method.
  • Competition: Both internal and external sources can be used to gather the metrics and then these must be reduced to a (very) limited number of essential numbers needed to manage the business. These should include comparisons to the performance of all major competitors, which also need to be identified and agreed for each business and category. The advantage of developing company-wide metrics and KPI’s, is that comparisons can be made across br ands, businesses and regions versus competition, and then summarized in dashboards. These dashboards should be visual as far as possible, with colour coding and graphical rather than tabular results, so that the health of the business can be quickly ascertained. Traffic light signs or colouring seems to be the most used way of highlighting risks and challenges, but you can define whatever works best for your own company.

Identifying and defining the KPI’s for your management to follow is an essential task of your strategic planning and finance groups, but in customer centric organisations, your market research and insight teams can help by bringing the external perspective   and metrics that are vital to successful business and br and building.

 

What metrics do you follow and consider as essential for your industry? What have I forgotten?

 

For more information, please check out our website: https://www.c3centricity.com/home/underst and/

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