Evolving Measurement Techniques to Optimise Brand Marketing Success
October 08, 2024BruceDayneIn 2024, major economies are still experiencing stunted recovery and tentative growth across the globe: the UK’s economic recovery has slowed over the past two quarters, according to the BBC; in the US, credit card debt has hit a record high of $1.14 trillion, according to the Federal Reserve Bank of New York; in China, GDP growth is forecast to miss government targets by 0.2 percent, according to the Bank of America.
What’s more, while US government data revealed that monthly US consumer prices dropped for the first time in four years as inflation subsides, apparel prices still rose 0.1 percent from the previous month.
In this context, fashion brands vying for the discretionary expenditure of aspirational customers need to provide a compelling reason for that consumer to part with their money. This cohort is increasingly considered in where and how they spend, meaning brands must carefully consider how they connect with this consumer and how they can show up in the places they spend time.
To learn more about how brands can authentically invest in brand activations, and how to measure their performance, BoF and Ekimetrics hosted a roundtable discussion at Mortimer House in London in September, gathering marketing leaders from across the UK’s fashion industry.
Since 2006, tech-enabled data science firm Ekimetrics has worked with over 50 luxury brands as well as renowned companies such as Estée Lauder and Nestlé to pioneer the use of AI and advanced data science in the industry. This has resulted in rich learnings for the sector, such as those shared in its roundtable companion paper, Driving Long Term Performance with Customer Lifetime Value, and ongoing engagement with sector-leading brands.
“I don’t think we have worked with any brands where they don’t know or don’t believe that investing in brand marketing — those longer-term activities — is the right thing to do. But we have also not worked with many brands where they are really confident in knowing what their investment in long-term brand actually delivers for the business,” shared Matt Andrew, a partner at Ekimetrics, in his opening remarks as a host of the roundtable.
Best practices today to engage consumers include much more effective and nuanced brand marketing, as the efficacy of performance marketing and paid campaigns diminishes due to decreasing relevancy and increasing costs. According to BoF and McKinsey’s The State of Fashion 2024 report, 71 percent of executives planned to increase brand marketing spend in 2024, in a bid to cultivate greater emotional connections with customers. In comparison, only 46 percent of surveyed executives intended to do the same for performance marketing. However, while investments may have shifted to align with this cultural change, success metrics and strategic frameworks have not caught up.
Conducted under the Chatham House Rule and moderated by BoF’s head of content strategy, Robin Mellery-Pratt, the event welcomed executives from brands and retailers Jimmy Choo, Harrods, Frasers Group, Me + Em, Missoma, The Dune Group, Russell & Bromley, Aspinal of London and rental platform Hurr.
Below, BoF shares condensed and anonymised insights from the discussion.
Accommodate long-term strategic goals with longer lead times
“In times of low economic activity, it’s usually the brand that gets hit, but not because it’s not driving value, but because a lot of companies don’t have the right metrics to prove that it’s for everybody and because it’s not a return you get immediately,” shared one attendee. “It’s really about: how can you tie those two things together to look at the performance with the same long-term lens?”
“I think there’s definitely a longer-term view that you need to take,” said another guest. “And it’s [looking] at cohorts of clients that have engaged with us around certain periods X many months later, and also the luxury spending patterns to have them come back multiple times a year — it’s a challenge.”
“So you do need to give it a bit more time. It doesn’t help you make an immediate decision [by] just pumping more money into Google shopping, for instance [...] It’s just a different kind of rationale,” they added.
Adjust KPIs to measure lifetime value effectively
“What we see is the need for more North Star KPIs — like lifetime value, like brand equity, short-term sales — and then the need to have consistent measurement for those things so that everything that you do can be measured against those things,” said one attendee. “There needs to be a culture of innovation as well to remain relevant. So we see that as a combination of North Star KPIs and system framework.”
“That shift from the backwards-looking perspective having a role and being important because you need to know what you’ve achieved [in the past], but having a stronger lens to be clearer about what’s going to come next — like having a strong forecast,” is what one attendee suggested. “[It’s about saying], what can we pull, what can we do to improve that and to say, ‘Actually, how is what we’ve achieved stronger from a revenue perspective versus a customer makeup perspective?’”
One of the changes that we have seen, particularly for younger consumers, is the shift to product-first rather than brand-first — people discover brands through products rather than the other way round.
“What are you doing to enhance that customer base so that you continue to acquire customers, and make those acquisitions stronger? And are you retaining customers through those different personas or segments? It’s about connecting those to the decision-making process and making them equal in terms of what you decide,” the same attendee added.
Align product with brand in a culture of ‘product-first’ paths to brand discovery
“One of the changes that we have seen, particularly for younger consumers, is the shift to product-first rather than brand-first — people discover brands through products rather than the other way round, which creates a really interesting challenge, which is: how do you create brand loyalty if the entry point is a product?” shared one attendee. “Part of the challenge is, if the world is investing in product and you are investing in brand, it’s not just about bridging performance and brand marketing — it’s bridging product and brand.”
“I like the term brand promise,” added another attendee. “It really connects the products to the brand. If your products meet the brand promise, you know what you are getting from whatever product you buy. You know what you are going to get from it is much stronger,” they shared.
“Eighty percent of our customers are coming to a brand for the first time through rental,” shared one attendee, when discussing the opportunity for retailers in the circular business model — both in terms of sustainability and brand discovery via product. “Rental helps with returns; it helps with sustainability; it helps customers make more informed decisions.”
Create rewards and loyalty programmes to understand your customer segmentation
“When you speak of data today, the most important thing is, how do you capture it and [build] a customer strategy that we can monetise, but also provide the best experience on? And the foundation for that was analytics, essentially. For example, we looked at: what is a customer’s behaviour when they first join [the brand] and, regardless of whether you are someone who spends £1,000 a year or £15,000, for us, their early life behaviour was the same,” said one executive.
“So 85 percent of the clients who churn, they make three or less purchases. For us, the fourth purchase is the magic number. Then we looked at, how long does it take to get to [number] four? For us, the average is three months. So now the team has to push our customers to try and get to the fourth purchase, and that doesn’t matter [what the purchase is, big or small],” shared the same executive.
“What we do essentially is for our personas — we build different journeys with different content around that, so different [products] to different people, but essentially more or less they follow the same pattern. We try to engage them through that journey and it has been really successful. But I would say, we are lucky in that we have our rewards programme that’s been running for 15 years and we have 80 percent rewards participation, so we are really data-rich,” they added.
What we see is the need for more North Star KPIs — like lifetime value, like brand equity, short-term sales — and then the need to have consistent measurement for those things.
“We need to do more analysis and think about looking at that top subsection of our customers and how valuable they are or how we should be treating them differently as well, in terms of looking at that retention. Because we do struggle with people only coming back maybe a couple of times a year,” shared one attendee. “We don’t have those repeat purchases three or four times in a month, so it’s about keeping the momentum of those customers so that they keep coming back year after year.”
“For us, especially during Covid, we realised how important the local customer is,” said another attendee. “We really stay on that kind of long-term trend — especially if you’re talking about lifetime value —who is really important to take care of and engage on a regular basis.”
Explore a diverse range of tactics to avoid overreliance on content creators
“Sometimes you can lose control of that brand space because of how you are activating people through the influencer. So for us, we see it a bit more as performance marketing — and it can drive massive growth because it’s ready access to an audience. But I think we still need to really work hard in terms of, ‘what is your brand, what does your brand stand for outside of what the influencer brings you’,” suggested one attendee.
“We’re really looking at how we use content creators. I think [...] we have kind of lost our brand identity along the way a little bit by relying too heavily on these content creators, [which] just confuses even more as to who [our brand] is,” said one guest.
“Sometimes, the ones that work really well are, for instance, a guy taking his top off getting changed [wearing our product] — and we’re like, that is so not on brand, but it works because he’s an attractive guy with his top off. And then what’s taken from his following is — people who are interested in him with his clothes off rather than the product.”
This is a sponsored feature paid for by Ekimetrics as part of a BoF partnership.
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