How to Measure Brand Health and Heal a Sick Brand

Maintaining robust brand health is crucial in today's fiercely competitive market, playing a critical role in ensuring long-term sustainability and growth. Brand health encompasses a variety of factors that collectively reflect how well a brand meets its promises to customers and maintains its position in the market. This extensive guide will delve into what brand health is, how it can be measured, what tools can be used, and the actionable steps companies can take if their brand health is deteriorating.

Understanding Brand Health

Brand health refers to the vitality and robustness of a brand in fulfilling its promises to customers and stakeholders. It includes various dimensions such as customer satisfaction, brand awareness, brand equity, and overall market presence.

A healthy brand delivers consistent positive experiences not just to customers but to employees and all stakeholders. A robust brand health strategy ensures that the customer experience closely aligns with the brand promise, leading to increased loyalty, better customer retention, and a stronger competitive edge.

The Importance of Tracking Brand Health

Tracking brand health involves more than analyzing straightforward financial metrics such as sales figures. It requires a comprehensive approach to understanding how the brand is perceived, how it interacts with its customers, and its overall position in the marketplace. Effective brand health tracking helps businesses:

• Understand and improve brand perception and reputation.
• Measure memorability and recall of the brand.
• Analyze customer interactions and attributes associated with the brand.
• Assess purchasing behaviors and overall brand positioning.
• Identify negative trends early and address them proactively.
• Benchmark performance against competitors.
• Optimize marketing strategies and budget allocation.
• Enhance advertising effectiveness.
• Cultivate brand advocates and achieve brand equity.

Regular brand health checks are crucial for informing marketing strategies, directing budget allocation, identifying potential negative trends early, and benchmarking against competitors. Essentially, it helps gauge how well a brand is performing for its target audience.

Real-Life Example: Coca-Cola

Coca-Cola’s brand health is a prime example of how strong brand equity and customer loyalty can elevate a company. Despite facing health-conscious market trends and diversified consumer tastes, Coca-Cola has maintained its brand strength through effective marketing strategies, consistent brand messaging, and continuous innovation. Their focus on maintaining a positive brand perception and high customer satisfaction has helped them remain a leader in the beverage industry.

Key Metrics for Measuring Brand Health

Brand health is multifaceted, involving various metrics that offer insights into different aspects of the brand’s performance:

1. Net Promoter Score (NPS) and Customer Satisfaction (CSAT)

• NPS: Measures customer loyalty and the likelihood of customers recommending the brand to others. It is calculated based on responses to the question: "How likely are you to recommend [Brand] to a friend or colleague?" Responses are scored on a scale from 0 to 10, categorizing respondents into Promoters (9-10), Passives (7-8), and Detractors (0-6). The NPS is then derived by subtracting the percentage of Detractors from the percentage of Promoters.
• CSAT: Assesses customer satisfaction with a product or service. Customers rate their satisfaction on a scale from 1 (Very Unsatisfied) to 5 (Very Satisfied). The CSAT score is calculated by the percentage of customers who gave a rating of 4 or 5.

2. Share of Voice

Share of Voice (SoV) measures the brand’s presence in the market compared to competitors. It analyzes how much conversation around a category is dominated by the brand, which is crucial for understanding brand visibility and influence.

3. Brand Sentiment

This metric evaluates public sentiment towards the brand across various media. Sentiment analysis tools categorize mentions as positive, neutral, or negative, providing a clear view of the brand’s reputation.

4. Brand Recall

Brand recall is a measure of how easily a brand comes to mind in a certain category. For instance, asking "What brand of toothpaste comes to mind first?" helps measure top-of-mind awareness.

5. Purchase Intent

This metric gauges how likely customers are to purchase from the brand again, usually obtained through surveys with questions like "How likely are you to buy [product] from [brand] again?"

6. Brand Equity

Brand equity combines several metrics, including NPS and purchase intent, to provide an overarching view of the brand’s value in the market. It reflects the strength of the brand and its ability to command a premium.

Tools for Tracking Brand Health

Several tools and platforms can help businesses track and analyze these metrics effectively:

• Qualtrics XM: Offers robust tools for measuring NPS, CSAT, and conducting sophisticated market research.
• Brandwatch: Provides comprehensive analytics for Share of Voice and sentiment analysis, helping brands monitor online conversations and trends.
• Google Analytics: Essential for tracking website traffic and customer behavior online, contributing to understanding online brand interactions.
• SurveyMonkey: A versatile tool for creating and distributing surveys to measure NPS, brand recall, and purchase intent.
• Hootsuite Insights: Offers real-time social media monitoring and analytics, ideal for tracking brand sentiment and engagement across social platforms.

Addressing Declines in Brand Health

Identifying a decline in brand health early is crucial for mitigating risks and reversing negative trends. This involves a detailed assessment and a strategic response:

1. Diagnosing the Problem

Gathering both quantitative and qualitative data is essential to pinpoint areas of weakness or misalignment with customer expectations. This diagnosis should include a deep dive into all brand health metrics discussed earlier, supplemented by customer feedback and market analysis.

2. Setting and Acting on Turnaround Goals

Establishing clear, actionable objectives for short-term and long-term improvements based on identified issues is crucial. This might involve rebranding efforts, revising marketing strategies, or enhancing customer service practices.

3. Measuring Progress

Continuously tracking the effectiveness of implemented strategies is essential to ensure that brand health is improving. This should involve regular updates on key metrics and adjustments to strategies based on what the data shows.

Real-Life Example: McDonald's Turnaround Strategy

In the early 2000s, McDonald's faced a significant decline in brand health due to various factors, including public health concerns and increased competition. The company launched a comprehensive turnaround strategy that focused on menu diversification, improving food quality, modernizing restaurants, and enhancing digital engagement with customers. They also ramped up marketing efforts to better communicate these changes. The results were a revitalized brand image, improved customer perceptions, and increased sales.

How CX and EX Affect Brand Health

Customer Experience (CX) and Employee Experience (EX) are pivotal aspects of brand health. They directly impact how customers and employees perceive and interact with the brand.

Customer Experience (CX)

A positive customer experience enhances brand loyalty, increases customer satisfaction, and builds strong brand advocacy. Tools like Medallia and Qualtrics provide comprehensive CX insights, allowing brands to monitor and improve the customer journey at every touchpoint.

Employee Experience (EX)

Engaged and satisfied employees are more likely to contribute positively to the brand, enhancing customer interactions and internal innovation. Platforms like Workday and Glint help measure and improve EX by providing insights into employee satisfaction and engagement.

Advanced Techniques and Tools for Brand Health Measurement

As technology evolves, so do the tools and techniques for measuring brand health:

Predictive Analytics

Tools like IBM Watson offer predictive analytics capabilities, which can forecast future brand trends based on historical data. This allows companies to proactively manage their brand health by addressing potential issues before they escalate.

Social Listening Tools

Platforms like Brandwatch and Sprout Social provide real-time insights into what customers are saying about a brand online. This helps companies quickly respond to negative feedback and engage with customers in a timely manner.

Integration of AI and Machine Learning

AI and machine learning are becoming increasingly integral in analyzing large datasets and generating actionable insights. Tools like Crimson Hexagon and Google's AI Platform help brands understand complex customer behaviors and preferences at scale.

Case Study: Nike

Nike, one of the world's most iconic brands, faced a significant crisis under the leadership of CEO John Donahoe. Appointed in 2020, Donahoe brought a heavily data-centric approach to the helm, influenced by his extensive consulting background with Bain & Company. This shift toward data and away from the brand's heritage culminated in a dramatic stock price collapse on June 28, 2024, where Nike lost $25 billion or 32% of its market value in a single day.

Streamlining the Organization Attempt

Under the guise of efficiency and simplification, consultants recommended a significant organizational restructuring. This led to the dismissal of numerous seasoned experts, diluting decades of accumulated tacit knowledge and severely impacting product innovation. The reclassification of product categories into generic segments (men’s, women’s, and children’s) diminished the specialized focus that had propelled Nike's dominance in sports such as running, basketball, and soccer.

Customer-Centric Transformation

The shift to a Direct-to-Consumer (DTC) model was intended to modernize Nike's sales approach, moving away from traditional retailers to focus on driving traffic to Nike.com. This strategy initially seemed promising, especially during the e-commerce surge prompted by the pandemic. However, it became apparent that the brand loyalty was overestimated. The absence of Nike products in local stores led consumers to purchase alternative brands, highlighting a significant oversight in consumer behavior understanding.

Data-Driven Digital Marketing

Replacing emotionally resonant brand campaigns with sales-focused digital marketing tactics eroded the deep emotional connection that customers had with Nike. The previous strategy of creating inspiring campaigns that dominated cultural conversations was replaced with a narrow focus on online conversions. This shift allowed niche competitors to resonate more profoundly with specific consumer segments, diluting Nike's market share.

Consequences

The consultant-led strategies led to a loss of brand equity, diminished customer loyalty, and a failure to inspire consumer demand through innovation. The emphasis on short-term metrics and cost-cutting proved detrimental, overshadowing the intrinsic value of Nike's brand identity and heritage.

Turning the Tide

Recognizing the detrimental impacts of these strategies, Nike appointed a new CEO, Elliot Hill, who began his career at Nike as an intern in 1988. Hill's deep understanding of the brand’s core values and consumer culture has been pivotal. His leadership saw the reintroduction of bold, culturally resonant campaigns, notably during the 2024 Paris Olympics with the “Winning Isn’t for Everyone / Am I a Bad Person” campaign, signaling a return to the brand’s dynamic and inspirational roots.

Lessons Learned

The Nike debacle serves as a cautionary tale for marketers and business leaders. It underscores the dangers of disconnecting strategic decisions from the intrinsic values and emotional connections of a brand. While data is undoubtedly vital in informing business strategies, it cannot be the sole basis for decisions, especially in industries where brand perception and customer loyalty are paramount. This case highlights the importance of balancing data-driven insights with a deep, empathetic understanding of what the brand represents to its consumers.

Conclusion

Maintaining strong brand health is essential for any business aiming to thrive in a competitive environment. By regularly measuring key metrics, utilizing the right tools, and taking action based on insights gained, companies can ensure their brand remains vibrant and healthy. This not only secures their market position but also drives future growth and innovation.

Nike’s experience is a powerful reminder that in the quest for efficiency and quantifiable results, companies must not lose sight of their brand’s soul. The revival under Elliot Hill emphasizes the importance of aligning business strategies with brand identity and consumer expectations. For marketers, the key takeaway is clear: leverage data, but not at the expense of losing what makes your brand unique and cherished by customers.

Brand health is not a static measure but a dynamic one that requires ongoing attention and adaptation. As seen with companies like Coca-Cola and McDonald's, continuous efforts in maintaining and improving brand health can lead to remarkable turnarounds and sustained success. By embracing both traditional and advanced techniques for measuring and improving brand health, businesses can navigate the complexities of the market and emerge stronger.