You’re a CEO sitting in your boardroom while the directors of human resources, advertising, merchandising, digital and marketing each present their funding requests for this year’s brand-building initiatives.
Human resources wants to retrain public-facing employees to better communicate your brand’s image. Advertising wants to launch a new broadcast campaign supported by print. Merchandising presents a proposal for new display cases and better in-store lighting. Digital insists on a redesign of the website to better accommodate social brand initiatives, and marketing wants to mirror what your main competitor, the category leader, has done. How do you decide which of these many customer-facing, brand-building initiatives to fund?
Thanks to the internet and social media, building a brand is now so much more than creating award-winning advertising and designing packages, logos, and environments. Now it’s about experiences, and experiences are the sum of thousands of touchpoints.
If a person’s feeling about a brand is built through touchpoints, we need to consider that our traditional ways of measuring the brand’s impact, such as purchase-drivers, may no longer be sufficient. Brand measurement typically falls into one of several areas:
• Brand health measurement traditionally focuses on outcomes. It measures how people feel about a brand, but rarely tries to measure which touchpoints (outside of paid advertising) have influenced those perceptions.
• Marketing-mix modeling is a very useful and sophisticated discipline for measuring the effectiveness of marketing spend, but is generally unable to account for unpaid, uncontrolled touchpoints (such as personal recommendations).
• Brand valuation is a wonderful discipline f or “identifying and defining the economic strengths and weaknesses of a brand,” as articulated by Blackcoffee.com, but uses financial and brand-perception metrics as input and is not intended to be diagnostic.
• Loyalty models come closest to considering touchpoints, but the leading models include pricing and product variables, which obviously have great impact on brand preference and can outweigh the influence of branded touchpoints.
As the digital age calls for a greater focus on experiences — and touchpoints — we find it increasingly important to prioritize them. Without being able to identify the touchpoints that have the greatest impact (or greatest potential to have an impact) on brand preference, it is impossible to know where to channel limited resources. Should it be an investment in a website or in-store signage? Should it be in a speedier checkout or a loyalty program?
We decided to employ the advanced analytic techniques used in marketing-mix modeling and loyalty models to focus on the touchpoints themselves. We realized that we needed to measure the impact each touchpoint has on building brand preference or purchase interest. In effect, we needed to identify the driver touchpoints and those that are just the riders, with little influence on brand preference.
Simply put, we created a quantitative research instrument that models a brand marketplace and reveals the stages and touchpoints that have the most impact on preference for a brand and its competitive set. Our tool was developed to go far beyond assessing the kinds of touchpoints included in media-centric measurement models. That is, it measures all points of interaction whether intentional or unintentional, paid or earned, physical, sonic, or olfactory.
It allows for up to 100 touchpoints that can be sorted both by stage and type. Typically, the items tested fall into these categories: paid/traditional media (radio, TV, outdoor, sponsorship); packaging (label, structure, outside pack, size); displays; loyalty programs; digital; word-of-mouth; customer service (help line, in-store trial, repair); product mix (retail specific); specialized (music, scent, other).
Each of these categories contain between five and 10 touchpoints. For example, within packaging, there can be convenient handles, appealing graphics, and coupons on packs. For digital, there is a brand’s website, Facebook page or mobile app. For word-of-mouth, there is often a friend’s recommendation, seeing someone use a product, or a professional referral from one’s physician, for example. Obviously, the stages of a journey and the individual touchpoints vary widely by type of brand and whether it is industrial, service, retail, business-to-business, or business-to-consumer.
However, before measuring touchpoints, we have to unearth them.
Finding the touchpoints. Increasingly, we consider the customer at the heart of every brand’s challenge, and out of this thinking we formalized the customer journey (see chart one). A customer journey is an organizing principle that allows us to map a customer’s experience with a brand and assign touchpoints to each stage. The concept of customer journey is widely accepted among marketers and used for a variety of purposes — from simply outlining the customer experience to analyzing and identifying pain points to brainstorming new ways to interact with customers.
If a current customer journey map does not exist, we must develop one. We do this either by using existing customer research or conducting fresh research around how the customer interacts with the brand. This allows us to create a holistic journey reflective of a customer’s emotional and rational experience. Using customer journey as a framework for measuring touchpoints, we can clearly visualize and prioritize touchpoints in each stage of a customer’s experience with their brand.
While the centerpiece of the process is obviously the model itself, the preparation phase is critical. Understanding one’s organizational goals is key here. How does one define touchpoints? How are touchpoints managed and created, and by which departments? What are future goals moving toward? Who are the day-to-day competitors and who might future competitors be?
Discovering the insight. The customer journey work presents the brand’s specific touchpoints. Often the first iteration will include several hundred touchpoints, so we reduce the list to those touchpoints that are measurable and are of interest. Some of these touchpoints may be ones that the brand does not currently deploy, but that their competitors do. This allows for identification of the competitor touchpoints that are a threat and those that are irrelevant.
Final lists range from 60 to 100 items, with each touchpoint assigned to its most appropriate stage in the journey. Grouping the touchpoints by stage provides the additional value of revealing the areas that most drive preference. Using an online, fielded survey, we uncover the primary, secondary, and supporting touchpoints of a brand (see chart two).
While we are always delighted to discover the primary drivers, we find that the secondary and supporting touchpoints may offer the most potential for brand differentiation and innovation.
In addition to revealing the relative importance of each touchpoint, our model also clarifies which of the brands surveyed is the “leader” or “owner” of that touchpoint. This is an especially actionable component as it allows us to assess whether we want to confront a competitor head-on or separate themselves through optimizing a different set of touchpoints.
Ongoing prediction. After the model is complete, we use a simulator to test the degree to which preference for any brand can be improved. The simulator allows us to evaluate how brand preference shifts as performance on touchpoints improves or worsens. Using a given touchpoint for recognition as best-in-class allows us to select and invest only in those touchpoints that can be owned or are preferred over the competition’s.
Real discoveries. Our first few uses of our model have been remarkably insightful. They both confirm some conventional wisdom (as should any valid research tool) and reveal exciting opportunities. In several instances, unexpected touchpoints emerged.
Airline experiences are natural “journeys” and were an ideal opportunity to test the methodology. In this category, even small changes can have monumental impact on finances and customers’ experiences, so pinpointing those touchpoints
that can even marginally improve preference is extremely useful.
Among the many findings of the study, it was discovered that the airplane-exiting experience has major impact on how customers feel about the brand — a fascinating finding, given that airlines put so much emphasis on boarding and almost none on exiting. Similarly, we learned that very small enhancements in the on-board experience, such as warm towels and non-plastic cups, increase preference for a brand more than some traditionally emphasized touchpoints, such as uniforms.
Beer marketers know a lot about what drives preference for drinkers, but less for shoppers, so we were interested in uncovering those stages and touchpoints that are most influential for buyers, not necessarily drinkers. We uncovered the fact that preference is most influenced by touchpoints outside the specific aisle — end-cap displays, on-premise/bar promotional items, websites, advertising, and word-of-mouth.
Actual packaging appears to be less important at the “moment of truth” than is often stated. We also learned that loyalty programs (very new to the category) have unexpected power, even though few shoppers had experienced them.
It is this sort of empirical learning that allows marketers to evaluate current touchpoints and investments openly and fairly. It brings clarity to CEOs in the boardroom, allowing them to invest in the department that aligns best to the brand strategy, not to the one that makes the loudest request.