The Brand

Scorecard
Successfully managing the customer experience is the ultimate goal.
By Lawrence A. Crosby and Brian S. Lunde
Customer
b o n d i n g
12 ! MM Ma y / J u n e 2 0 0 8
I N THE I R pioneering Harvard Business
Review articles and book, The Balanced
Scorecard: Translating Strategy Into Action
(Harvard Business School Press, 1996),
Robert Kaplan and David Norton intro-
duced a framework for a strategic meas-
urement and management system. The
scorecard balances short- and long-
term objectives, financial and nonfinan-
cial measures, lagging and leading indi-
cators, and external and internal per-
formance perspectives. The balanced
scorecard serves to communicate and
align the organization around the busi-
ness strategy. Companies around the
world have adopted some version of
the balanced scorecard as a means of
organizing their corporate KPIs (key
performance indicators).
One of the more recent developments
in performance measurement/manage-
ment is the concept of the brand score-
cardwhich is narrower in scope than
the balanced scorecard. The brand score-
card views performance through a cus-
tomer-focused brand lens. Highly
appropriate for companies managing
multiple brands, it also applies to single
brand companies. Its premise is that
favorable business outcomes accrue to
companies whose brands have strong
demand pull. This scorecard aligns busi-
ness functions around creating an excep-
tional (i.e., differentiated and relevant)
branded experience across the entire
landscape of customer touchpoints to
drive higher levels of brand attraction
and loyalty. In effect, the brand score-
card integrates performance, brand, and
customer experience management.
Whirlpool Corporation, a leading
manufacturer of appliances, has rolled
out a version of the brand scorecard con-
cept to all of its appliance brands
around the world. Whirlpool heralds
this as a major step forward in its strate-
gy of brand-focused value creation.
A brand scorecard should be
expressed on one page. This creates
organizational focus around a limited
set of strategic goals, key indicators, and
the drivers of brand success with the
most impact. In most companies, the
scorecard will be deployed via a secure
portal using a dashboardand it may
even feature real-time data streams.
The scorecard represents a layered
causal model of performance metrics
from Level 4 up to Level 1 (see Exhibit
1). Lower level measures tend to be
leading indicators of change, while
those at the upper end tend to be lag-
ging indicators.
Brand Promise Statement
The brand promise statement serves
as the unifying strategic principle that
holds the brand scorecard together. The
brand promise is a succinct expression
of how customers can expect to experi-
ence the brand across all touchpoints.
Marketplace and Financial Outcomes
If the brand promise is compelling
and consistently re i n f o rced and deliv-
e red, results will be reflected in measure s
of key marketplace and financial out-
comes. Commonly sought-after brand
outcomes include: distribution coverage;
size of the customer base; market share ;
price premium; total revenue; gross pro f-
it; operating income and so on.
For each of these outcome metrics
(and all others in the brand scorecard),
there should be at least four pieces of
performance data: previous period
actual, current period target, current
period projected, and next period fore-
cast (the definition of period will
vary by company).
Demand Pull
Positive business outcomes are best
assured when there is a strong customer
franchise for the brand. Push strate-
gies can be effective, but (in the long
run) it is much easier to secure favorable
distribution, maintain margins, and pro-
tect/grow share when the ultimate buy-
ers want your brand, seek it out, and
accept no substitutes. For manufactur-
ers, demand pull is necessary to pre-
serve a balance of power in channels
of distribution.
Key indicators of demand pull are
customer attraction and customer loyalty.
Attraction has traditionally been assessed
using so-called brand health trackers,
which gauge the percentage of the mar-
ket evidencing brand awareness, consid-
eration, pre f e rence, and choice (and the
conversion rates across adjacent cate-
gories). But the validity of this hierarc h y
has been challenged, and more compa-
nies are relying on scaled and/or re l a t i v e
m e a s u res of brand attraction such as atti-
tudinal equity. Non-survey measures of
customer attraction could include traff i c
counts and trial rates, for example.
On the loyalty side of the equation
(where loyalty implies the strength of
the bond with existing customers), sur-
vey metrics also abound. And each has
its corporate adherents. The three most
popular appear to be a customer satis-
faction index, a customer loyalty index
or a Net Promoter Score. Generally,
these measures gauge behavioral inten-
tions such as the customers willingness
to continue buying, expand the relation-
ship, and advocate for the brand.
Non-survey measures of loyalty might
include actual buying history, reten-
tion/defection rates, share of wallet,
and number of referrals.
Touchpoint Improvement Priorities
The next layer of metrics in the Brand
Scorecard concerns touchpoint improve-
ment priorities. Common touchpoints
include such things as: advertising, Web
site, point of purchase, salesperson,
product/core service, order and deliv-
ery, billing, customer service/call center,
repair, and sponsorships. While there is
no agreement on the number of priori-
ties a brand should have, three to five is
a rule of thumbso that effort and
investment are not too diffused to com-
promise effectiveness.
Consistent with the outside-in view of
the score c a rd, the best source of touch-
point priorities is the customer. Using
various listening posts (e.g., focus
g roups, surveys, complaints, blogs, data-
base mining, and observation) and often
adding sophisticated statistical analysis,
the objective is to identify weak perform-
ing touchpoints that are critical to cus-
tomer attraction/loyalty. For each of the
priorities matched, performance met-
rics are identified that reflect the external
customer perspective and the internal
p rocess perspective. To u c h p o i n t
i m p rovement is gauged by changes in
performance scores over time.
Appropriate internal metrics for
assessing touchpoint performance are
those having a causal influence on the
external metrics. This requires that the
brand does its homework to test the
linkage between external and internal
metricsfirst on a cross-sectional basis,
and then longitudinally.
Improvement Initiative Pipeline
The bottom layer of the brand score-
card deals with the improvement initia-
tive pipeline. The objective is to put met-
rics around the level of effort and steps
being taken to improve priority touch-
points. Theres no such thing as a silver
bullet that will cement customer rela-
tionships once and for all. Competitor
actions and rising customer expectations
require companies to continuously inno-
vate. They need to constantly fill the
pipeline with new ideas to create the
exceptional customer experience.
There are several options for initia-
tive pipeline metrics. One is to report
the top projects, their funding levels
over time, and expected impacts on the
touchpoint priorities. Another is to
express the total funds allocated to cus-
tomer experience projects as a percent
of selling, general, and administrative
expense. A goal would be to increase
that ratio over time, as an indicator of
relative investment in customer experi-
ence management. Yet another option
is to report the number of initiatives in
the pipeline, at various stages of devel-
opment. In this case, the goal is to keep
the pipeline full.
Delivering the Pro m i s e
The creation of a brand scorecard is
just the tangible manifestation of a more
complex customer experience manage-
ment process. The power of the concept
is the transparent manner in which it
integrates activities around a brand
promise, helping to ensure the consis-
tent delivery of a differentiated and
relevant customer experience. "
About the Authors
Lawrence A. Crosby is Synovates
chief loyalty architect. He may be
reached at larry.crosby@synovate.com.
Brian S. Lunde is senior vice president
of business development and
marketing for Synovate Customer
Experience. He may be reached at
brian.lunde@synovate.com.
MM Ma y / J u n e 2 0 0 8 ! 13
" Exhibit 1
Form of a brand scorecard
Improvement initiative pipeline
Measures of key marketplace and financial outcomes
Measures of brand attraction Measures of brand loyalty
Touchpoint improvement priorities
Level 1
Level 2
Level 3
Level 4
Statement of the brand promise (the experience customers can expect)
Priority #1 Priority #2 Priority #3 Priority #X
External Internal External Internal External Internal External Internal
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