Turning Brand Equity Metrics into Action Plans
In this series, we have already explored the best way to drive brand growth and the market research approaches needed to support it.
So, we now have our key brand metrics and understand which channels are preferred by our customers. But how do we turn this information into an action plan?
In brand equity research, stated importance is often used as the key measure of importance. Survey questions ask respondents to rank or rate attributes, providing researchers with direct, explicit data. While this approach provides a simple and cost-effective measure of importance, it suffers from inherent limitations. Customers may not accurately express their true opinions due to cognitive biases, social desirability bias, or difficulty articulating complex feelings about a brand.
In contrast, derived importance uses advanced statistical techniques like regression analysis to determine the actual importance of brand attributes. Respondents provide information on their preferences or we can use our Brand Salience and Brand Availability metrics to gain an overall measure of Brand Equity. This data is then analysed to identify which attributes significantly influence prescribing or purchase decisions. The derived importance approach offers a more objective and data-driven evaluation, providing a deeper understanding of the brand's true standing in the market.
There are several key advantages of derived importance over stated importance in brand equity research:
Derived importance identifies attributes that really are driving brand equity and growth, rather than what respondent think are driving it.
Derived importance accounts for the interdependence of brand attributes. Brands often possess complex relationships among their attributes, and customers evaluate them in combination. Stated importance, on the other hand, typically treats attributes in isolation, neglecting their interconnectedness.
Derived importance is adaptable to market changes. Brands must continuously adapt to evolving customer preferences and market trends. By using ongoing data collection and analysis, derived importance ensures that brand equity research remains current and relevant, providing valuable insights to support timely decision-making.
So, although stated importance has been widely used in brand equity market research, derived importance offers a more robust and accurate assessment of brand value. By utilizing sophisticated statistical analysis, derived importance goes beyond self-reported data, providing a deeper understanding of customer preferences and behaviours. This method enables businesses to develop more effective strategies, prioritize resource allocation, and maintain a competitive edge in the dynamic marketplace.
As the marketing landscape continues to evolve, using derived importance in brand equity research will prove essential for companies who wish to build and sustain strong, valuable brands. Through data-driven insights, brands can foster stronger connections with their target audience, drive brand loyalty, and achieve long-term success.