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How Brand Trackers Work with Sales Data to Paint a Complete Picture of Brand Health

Posted On  July 30, 2020
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Often times, a brand tracker will correlate very closely with your sales data. Then there are other times when you’ll discover actionable differences. No matter how they line up, a solid tracking program can always work in concert with sales trends to give you a comprehensive view of your brand’s health. And when you do come across divergences between your sales and tracking data, and you can rule out any data quality issues, you stand to unlock a wealth of insights that can help you anticipate new threats or uncover creative new opportunities to maximize your brand’s potential.

Why don’t good brand trackers always align to past or future sales performance?

Under normal circumstances, when most markets are in a steady state or are gently trending up or down, brand health ties only loosely to in-market performance. While the linkage is statistically significant (i.e., demonstrably real), the brand’s health and its sales do not always move in perfect lagged lock step. Why not? This is because there are many market dynamics and marketing forces beyond consumer sentiment that cause sales to fluctuate: advertising spend, promotional activity, distribution changes, seasonality, customer experience, inertia, and so on – by both you and your competitors.

If your tracker contains a heavy dose of advertising or promotions tracking, you may see quite a bit of variability in those metrics throughout a typical year. This allows you to measure the effectiveness of your actions in driving brand salience and actual or intended action. But don’t expect those ad metrics to shift your brand health metrics sharply or quickly; call-to-action advertising rarely changes deeply help brand beliefs and allegiances. Despite that, heavy investment in promotional activity may kick start your sales in the short term, but may erode your brand equity in the longer term, as any discounting undermines perceived quality and worth of the brand.

Even with heavy investment in brand-building communications, brand health and perceptions tend to shift very slowly, only demonstrating rapid shifts if you do something really compelling to enhance (or damage) your image in the eyes of consumers.

The most actionable brand trackers are predictive of your upcoming in-market performance, not just the sales that have already taken place. With forward-looking KPIs (such as future consideration or likelihood to purchase next), a tracker can serve as a leading indicator of likely sales levels, identifying opportunities to capitalize on, as well as potential problems to mitigate. While the tracker likely contains some of the data necessary to diagnose the problem, you may need to commission custom work to explore in-depth a deficiency that the tracker identifies.

How does context impact alignment between sales and tracking?

When it comes to brand trackers and sales performance, context matters. Your data is not immune to world events, economic disruptions, and cultural influences, and any analysis of sales and tracking data must be viewed through the same lens. The COVID-19 pandemic is proving to be an extreme example of exactly why context matters.

In the age of coronavirus, brands in many categories are seeing unexpected disconnects between their tracking results and their in-market performance. While sales trends tend to be explained a little more intuitively – travel and hospitality brands, for example, are famously suffering, while streaming platforms and retail alcohol are booming – brand-tracking movement has generally been less dramatic. In fact, the vast majority of trackers we’ve managed over the last few months are showing generally stable KPIs during this difficult time.

Due to these seismic shifts in the marketplace, there are cases where sales are surging, while KPIs are flat or down. And there are others where the opposite is true. There are good reasons for these disconnects, and they prove why trackers are such a critical source of actionable insights throughout this crazy time.

Here are a couple of dynamics we’ve noticed in the course of our own work over the last few months:

  • Some categories such as restaurants and hospitality are experiencing striking declines in usage. One recent analysis, for example, found that the economic impact on restaurants is at least $120 billion to date. Even if consumer affinity for a restaurant brand is flat (or even up, thanks to public support for employees and local businesses, or even simply a renewed craving for comfort food), it is likely still suffering those lost sales. Affected restaurants must determine if their attempts to maintain consumer connections and relevance are succeeding, or if they are potentially turning off those they need to fuel an eventual recovery. Only by continuing to talk to consumers can brands in hard-hit categories get that answer.
  • Some categories such as disinfectants, video streaming, and food delivery are experiencing striking increases in usage. If consumer affinity for these types of brands is flat (or even down, due to bad press, price hikes, or inventory shortages), they could still be experiencing big increases in usage. These brands shouldn’t focus only on short-term rewards while ignoring the long-term negative impact to brand reputation. It’s incumbent on them to recognize that affinity has remained stagnant, to understand why, and to use those insights to guide their messaging and marketing strategies. While it may be tempting for them to ease off ad spend while their products are in such high demand, there’s too much risk of ceding ground to more opportunistic competitors who can reap the rewards of building affinity among people who are creating new habits.

Brand trackers keep the human element front and center

There’s another reason why a good brand tracker is a vital complement to sales data: while sales receipts tell you what is happening, tracker surveys will tell you why it’s happening, or whether it’s likely to continue. Only by talking directly to your customers and prospects can you expect to diagnose a situation and prescribe remedies, if necessary.

If you have an ongoing tracker, you should analyze it within proper contexts and with deep human understanding. And if you typically take your customers’ pulse only once or twice a year, you may want to schedule a “telehealth visit” of sorts by fielding an off-cycle wave of your tracker to make sure things are heading in the direction you think they are.

Written by Hilary DeCamp
Chief Research Officer
As Chief Research Officer, Hilary runs LRW’s advanced analytics function and personally specializes in market segmentation studies. In addition, she leverages her 20+years of experience to consult with a wide variety of clients on study and questionnaire design, sampling and weighting, online data quality management, cross-cultural comparability, and analysis in report writing. She holds a BA in Quantitative Psychology from UCLA and earned her Masters in Marketing Research at the University of Georgia. Follow her on Twitter at @DecampHilary

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