Introducing PAR and BAR
CHAPTER 6 MARKETING PRODUCTIVITY METRICS
(PAR = Purchase Action Ratio and BAR=Brand Advocacy Ratio)
How good does our company convert from brand awareness to brand purchase? I haven't seen metrics such as these in our company and to put emphasis this affects the bottom line and return on equity (ROE).
The same goes with the question "How good does our company convert form brand awareness to brand advocacy?" and from here it has impact on both equity and growth of sales.
Decomposing PAR and BAR
The ROE is equated to profitability (net profit margin), asset use efficiency (asset turnover) and financial leverage (equity multiplier). This last component is subject to being "over" or "under" leveraged.
PAR formula is market share over brand awareness and if we are to measure the conversion rate from awareness to advocacy - the conversion rates vary to state
Low conversion rate from aware to appeal reflects low customer attraction usually attributed to poor positioning or poor marketing communications execution
Low conversion rate from appeal to ask reflects low customer curiosity which is usually due to a company’s inability to trigger conversation and facilitate information sharing among customers
Low conversion rate from ask to act results to low commitment to buy so it’s critical to fix 4 P’s (product,price,placement,promotion) to increase commitment level
Low conversion rate from act to advocate results to low affinity and that is due to poor post-sales service or poor product performance so the usage experience should be improved to increase affinity level
A BAR value of 1 means from awareness the customer was able to complete the journey and converted to an advocate is a rarity.
Building customer loyalty through BAR needs to have the objective of improving marketing productivity and avoid unnecessary waste in marketing spend.
Loyalty = INTERACTION (brand repositioning , marketing communications) x CURIOSITY (community marketing,content marketing) x COMMITMENT (channel management,sales force management) x AFFINITY (loyalty program, customer care)
Driving Up Productivity
1. Increase attention
An attraction problem is due to unattractive value
proposition! Brands need to be more humanized in the
digital environment and need to have an authentic
persona.
2. Optimize curiosity
Use content marketing and utilize it by identifying unique
themes, distribution and amplification of content in the
right media channel, do native advertising through paid
media i.e. well-known publishers and if the brand is
authentic, through word of mouth and social media i.e.
earned media
3. Increase commitment
Integrate online and offline experience for customers
regardless of touch points with the goal of providing a
seamless experience.
Marketers need to do the following with the goal of having the customer commit to purchase:
a. Breakdown organizational silos
b. Put themselves in the customers’ shows
c. Map the customer path using the most complete
scenario
d. Define the role of each channel
4. Increase affinity
Marketers should extend touch point and allow more
interactions with customers beyond regular ones. Add
customer engagement programs!
Q:How can your business adopt the new metrics of PAR and BAR to measure marketing productivity?
A: Through the 5A's, monitoring conversion rates is a possible way in to check for each marketing campaign whether it's a loyalty or an awareness campaign.
Q: How can your business trigger favorable customer conversations in order to drive awareness without increasing the marketing budget significantly?
A: I believe it's triggered by a series of good judgment and understanding of the most profitable market segment. If the design of a marketing program optimizes the company's own digital assets, a reasonable advertising spend and these are all in the right channels creating a seamless experience - driving the brand's equity and value proposition would create a "potentially" domino effect.