To ensure sustainable growth, you need to monitor the financial performance of your business. In this process it is important to have a direction of which factors to take into account and which metrics to use. We bring here some information that can help your team.
First of all, it must be borne in mind that brand awareness is as important as inducing purchases and defending the brand.
Certainly, having your brand remembered by consumers is a good sign, but it is only enough when we talk about sectors where the buying cycle is short or consumers are not very involved in the buying process.
Consumer loyalty is defined by your willingness to indicate a specific brand. Therefore, the goal of companies should be to win many customers willing to defend them . But to create this scenario, it is necessary to understand how brand awareness and the construction of consumer protection.
Kopler, in his book Marketing 4.0, cites metrics known as CAC (Coefficient of purchase action) and CDM (Coefficient of defense of the brand).
The CAC measures how well companies “convert” brand awareness into purchase actions.
The CDM does the same in relation to the “conversion” of brand awareness into brand defense.
These metrics were inspired by calculations made by financial executives to measure financial health. CAC and CDM can be compared to ROE (Return on Equity). ROE measures how much profit a company generates from shareholders' equity.
CAC and CDM allow marketing professionals measure the productivity of their spending.
With these metrics it is possible to monitor the investments made to generate brand awareness.
The return on equity is seen as a result of three factors:
- Profitability: measure for profit margin.
- Efficiency of use of assets: measured by asset turnover.
- Financial leverage: measured by the equity multiplier.
Comparing the brands , a higher ROE could result from higher profitability, use of more efficient assets and greater leverage, a better ROE from both causes is clearly an excellent result. However, a better ROE due to greater leverage requires close examination to determine where improvements can be made.
How can knowing CAC and CDM affect your business?
Being able to measure the conversion rate of assimilation to apology , it will be easier to answer how to increase the number of faithful lawyers . With this strategy you can see which strategies are missing in your company. Your team marketing should measure each conversion rate, from assimilation to apology. Remember that building customer loyalty is a long process and requires dedication. The ideal for your brand is that each customer goes through the five As without suffering deadlocks.
However, rest assured if your CDM score is not excellent, hardly in real life does a grade reach “1”, that is, the perfect grade.
Finally, knowing CAC and CDM it is possible to improve marketing productivity, investing in assertive forms of marketing and avoiding waste.
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