Here’s a question for all the folks who say that brand and reputation are important. How do you value brand? How do you value reputation? How do you know when your efforts at branding and reputation are paying off?
Here’s a relatively simple (and remember, simple != easy) way to get started in measuring the impact of brand in financial terms, in hard numbers that you can wrap your head around.
First, you need to know the value of a lead that you generate through marketing. Let’s say you have a product like World of Warcraft that costs 15/month. The annual value of that customer is15 x 12 months, or 180.
Cut that180 by your retention rate annually. If 90% of your customers remain loyal for a year, then a lead is worth 90% of 180 or162.
Now cut that by your sales conversion rate. Let’s say that of every lead that walks in the door, 10% become customers. A lead, then, is worth 162 x 10%, or16.20.
On your web site, go plug this into Google Analytics under Goal Settings.
Now, assuming you’ve got Goals configured correctly, every time someone becomes a lead via your web site, you assign their conversion a value of $16.20. Analytics does a whole bunch of slicing and dicing to help you assign values to all the different pieces of your web site, too. We’ll discuss that another time.
Let’s set a baseline, then, for what brand and reputation mean. If you have a great brand and great reputation, people will look for you, yes? People will seek you out based on your brand and reputation and presumably be primed to buy from you if your brand and reputation are strong, right?
Head to Google Analytics’ Traffic Sources. Go to Keywords. Switch the view from the standard to your Goal Set. You should now see the search terms people used to find your web site along with the conversion rate and per visit Goal Value in your view. Look for your brand name:
Look especially at the difference between the generic search (line 1) and the brand name in terms of conversion rate and goal value. The brand here is worth 3x what the generic search term is worth.
Now click through to just that brand name keyword’s data, switch to the longest timeframe you have, adjust the settings to monthly view, and look at the macro trend. If your brand and reputation matter, if they are of value, then you should see increased conversions over time as more people seek out your brand, seek out your name, find your web site, and convert:
You can see that in this case, brand does matter. More people are getting to the example web site and converting, based on having searched out the brand name in a search engine. This is one way of judging the value of your brand and reputation – brand power makes people search for you, and reputation (and value perception) makes people convert.
Bear in mind this is a raw baseline for measuring the impact of your brand. We didn’t take into consideration people who just call up one of your sales staff or type your domain name in directly. What I’ve described above is more of a diagnostic snapshot of your brand than a whole, holistic view of your brand’s value – but it’s enough to get you started. It’s enough to give you a baseline on which you can make judgements about the effectiveness of your branding and reputation.
Make sure your community managers have access to your analytics so they can see for themselves the value of their efforts. If they’re truly boosting the value of your brand and reputation, you’ll be able to see it grow over time.
Oh, and in case you were wondering, DJ’s doing a great job with Blue Sky Factory’s brand and reputation as an email marketing company. I can’t display our data because of NDA stuff, but the important lines are going in the right direction – up.
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