Chapter 6 PAR and BAR
•Download as PPTX, PDF•
3 likes•2,970 views
Marketing Productivity Ratios PAR and BAR
Recommended
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Chapter 6 PAR and BAR
Similar to Chapter 6 PAR and BAR (20)
Recently uploaded
Recently uploaded (20)
Chapter 6 PAR and BAR
- 1. CHAPTER 6 – Marketing Productivity Ratios (PAR and BAR) FREDDIE MENDIOLA SULIVA
- 2. OUTLINE 1. Introducing PAR and BAR 2. Decomposing PAR and BAR 3. Driving up Productivity 4. COSLA – Question A 5. COSLA – Question B
- 3. 1. Introducing PAR and BAR PAR – conversion from brand awareness to brand purchase – Sales (A1 to A4) BAR – conversion from brand awareness to brand advocacy – Sales Growth (A1 to A5)
- 4. 2. Decomposing PAR and BAR • Building Customer Loyalty – long spiral process of creating attraction, triggering curiosity, securing commitment and building affinity. • PAR and BAR reflects a process rather than outcome • Bottlenecks = Lower conversion rate at any given stage in the Customer path • Tactics/Intervention Purpose = 1. improve marketing productivity 2. avoid unnecessary waste in marketing spending (primarily advertising) Brand Awareness = Market Share
- 5. 3. Driving up Productivity • Interventions to Bottlenecks in the Customer Path (5A’s) to Increase Productivity
- 6. COSLA Questions A & B 1. How can your business adopt the new metrics of PAR and BAR to measure marketing productivity? 2. How can your business trigger favorable customer conversations in order to drive awareness without increasing the marketing budget significantly?
Editor's Notes
- In line with the five A's, two metrics are valuable to measure: purchase action ratio (PAR) and brand advocacy ratio (BAR). PAR measures how well companies “convert” brand awareness into brand purchase. BAR measures how good companies “convert” brand awareness into brand advocacy. Essentially, we are tracking the number of customers who go from aware (A1) to act (A4) and eventually to advocate (A5). PAR and BAR allow marketers to measure the productivity of their spending (mostly on advertising), particularly for generating brand awareness. PAR directly translates to Sales. BAR on the other hand, translates to sales growth.
- In order to appreciate PAR and BAR, we should break it down into their elements. PAR maybe calculated by dividing market share by brand awareness. That means, roughly you can estimate the potential market share increase by increasing awareness of those brands. Low customer attraction means low conversion rate from aware to appeal. It means that customers who are made aware of the brand don’t find it appealing which may stem from poor positioning or poor marketing communications execution. Low customer curiosity means low conversion rate from appeal to ask. It means that customers don’t feel compelled to ask questions and research the brand further which may stem from company’s inability to trigger conversation and facilitate information sharing among customers. Low commitment means low conversion rate from ask to act. It means that customers or people are talking about the brand without necessarily making the commitment to buy and is usually caused by failure in the four P’s (Product, price, place and promotion). Low affinity means low conversion rate from act to advocate. It means that customers who have experienced the brand are not delighted enough to share and recommend the brand. This is usually a result of poor post-sales service or poor product performance. When broken down into their elements, PAR and BAR scores reflect the process rather than just the outcome. Building customer loyalty is a long, spiral process of creating attraction, triggering curiosity, securing commitment, and finally building affinity. A lower conversion rate in any given stage across the five A's reveals a bottleneck. Like a bottleneck in manufacturing, a bottleneck in the five A's reduces the productivity of the entire customer path. Identifying the bottleneck that limits PAR and BAR scores allows marketers to pinpoint the problem and fix it. Using this simple diagnostic process, marketers now know exactly what intervention to make across the customer path. Instead of trying to improve across the board, marketers may now focus their attention on what really matters. Altering the right bottleneck touchpoint often leads to higher PAR and BAR scores that are closer to 1. The objective to this entire exercise is to improve marketing productivity and avoid unnecessary waste in marketing spending.
- Being the biggest benefit of connectivity in the customer path, customer conversation provides leverage and is essentially a low-cost way to build awareness without relying too much on advertising or without increasing the marketing budget significantly, and consequently increasing marketing productivity. In my company, advertising campaigns are being run in parallel to the customer conversation just to influence the direction of the conversation from outside in company’s favor. Driving up productivity means employing sets of strategies and tactics in order to address the underlying problems that keep customers from moving forward to the next stage in the customer path (5 A’s).
- A. PAR and BAR are useful metrics to better evaluate how effective marketers are in driving customers from awareness to action and finally to advocacy. It measures the productivity of their marketing activities. But in order to drive productivity, we should be able to identify where the bottleneck is coming from. The bottleneck can either come from the following: (a) low customer attraction, (b) low customer curiosity, (c) Low commitment, and (d) low affinity. In order to address it, we should know what the underlying cause is and together we can employ the right strategy/tactics or the intervention needed to address the bottleneck. For AIG, being a known brand in the insurance industry, the most common bottleneck is in the low affinity. This way the business can intensify engagement with its loyalty program and customer care strategies or tactics in order to increase its PAR and BAR scores. B. In my company, advertising campaigns are being run in parallel to the customer conversation just to influence the direction of the conversation from outside in company’s favor. Driving up productivity means employing sets of strategies and tactics in order to address the underlying problems that keep customers from moving forward to the next stage in the customer path (5 A’s). Top-of-mind recall brand is always the goal in influencing customer conversations that the company triggers as a leverage tool.