Measuring brand strength

From: Using Advocacy to Measure Brand Strength

In the early 2000’s, Frederick Reichheld, founder of the Loyalty practice at Bain & Company, conducted an independent study to better understand the relationship between consumer loyalty, short-term purchase and referral behaviors, and long-term corporate financial performance. The result of this study was the concept of the “net promoter score” and the subject of “The One Number You Need To Grow,” an article that appeared in the December 2003 issue of Harvard Business Review.

In addition to confirming the validity of using advocacy as a brand performance measure, Reichheld proved a consumer’s “likelihood to recommend” to be the top correlate to actual consumer behavior 80% of the time — across all product categories. Further, if a consumer is inclined to recommend the brand via word of mouth, he is also likely to repurchase.

Most companies that understand the relationship between advocacy and financial performance are experiencing the highest margins in their categories. They tend to have an extremely focused brand positioning, one that everyone at the company understands, embraces and delivers at every single consumer touch point. It is that all-important emotional upmarket brand positioning and carefully integrated communications program that earns the priceless “word of mouth” marketing from a brand advocate.