Jumpstart Automotive Group

“Not everything that can be counted counts, and not everything that counts can be counted.” ~ Albert Einstein

The value of a brand. How do you measure it at the customer level? Is it sales? Is it frequency of purchase? Gross margin per transaction? Lifetime value of a customer? Repurchase loyalty? Conquest/defection ratio? Almost as important, how do you measure the effectiveness of your media investment in improving the metrics chosen to measure brand performance?

Earlier in my career, I was challenged to define how we measured the strength of our customer relationship and the efficiency of our CRM activities. I developed a presentation and but made little progress and was challenged on most points. Finally, out of frustration, I asked the group leader what the most important relationship was in his life. He said it was his marriage and the relationship with his wife. Great. I then asked him about the relationship and whether it was a strong relationship with the potential to last. Fortunately, he was in a long marriage with every indication that it was a happy, loving marriage. I then asked him how he measured the health of the relationship.

Was it the length of the marriage? I know of long but unhappy and dysfunctional marriages. Was it the number of times per day that his wife told him she loved him? Was it the number of days per week that they enjoyed dinner together? Was it the number of kisses per day? The frequency of making love? The meeting did not end on a good note but at least he recognized the idea that measuring was not simply a matter of data collection and quantitative analysis.

Brands can be thought of in simple, human terms. They are like people. Each one has some set of values, characteristics, observable behaviors, and a personality. The best brands, like best friends have a unique profile that connects with you in a profound, emotional way. Rarely is it a single characteristic. Think about your best friend. Are they the wealthiest person that you know? Are they the tallest? The fastest? The smartest? The funniest? The sexiest? They probably don’t achieve best in class leadership in any single dimension but every time you think of them, you feel good. You feel fortunate that they’re your friend, that they’re a part of your life. Occasionally, they may disappoint you but you trust them deeply.

Nike is a powerful, clearly defined brand. They dominate the market in athletic shoes and have built a well-deserved reputation for design, function, performance, and innovation. They are tenaciously competitive and celebrate our competitive nature. They are all about winning but enthusiastically encourage everyone to participate, invite everyone to just do it. They align themselves with like-minded brands, athletes like Michael Jordan, Barry Sanders, Usain Bolt, and Tiger Woods, who inspire us. They collaborate with like-minded companies like Apple to develop innovative new products and grow the community of Nike enthusiasts. Occasionally, they disappoint us with shoes that don’t fit, or by discontinuing products that we love, or by engaging in questionable labor practices. Still, we trust them and reward them with growing market share and the purchase of an ever-growing portfolio of Nike products.

My relationship with Nike is strong but I’m not sure how they measure the strength of that relationship or the effectiveness of their CRM activities. I suspect that I’m not one of their best customers as measured by lifetime sales, frequency of purchase, or breadth of products purchases. That said, I’m an evangelist. I always recommend Nike products to friends and associates. When I need anything to do with any of my outdoor activities, I check Nike first.

Over the years, Phil Knight has built a great team of highly analytical people to mange the business and measure performance. I’m equally certain that his most important decisions were not driven by focus groups, quantitative analysis, or traditional market research. They were driven by his vision of Nike and his deep understanding of the Nike brand. Absent this level of understanding, we need a better, richer approach to evaluating the effectiveness of our marketing investments. We also need to accept the idea that great brands are built over time, not during a single ad campaign.

Any investment in advertising is made with the intent of building business and building the lasting value of a brand. Unless we understand the brand and know what we’re trying to communicate, it’s difficult to measure the impact of a single activity, event, or campaign. Unless we know what counts, we should be careful about what we count and what inferences we make from counting.