When entering the business world, one of the earliest concepts one learns is Return on Investment (ROI). Even a child with a lemonade stand quickly learns she needs to at least make as much as she spends on creating and marketing her product. In years past, marketing ROI could be calculated with relative ease. Investment in a campaign could be tracked by channel (e.g. direct mail, in-store displays, ad pricing, commercial, etc.) against sales, but as how consumers interact with brands continues to evolve, so must the metrics by which success is measured. American Marketing Association, partnering with Epsilon, recently tackled the new metric of success: ROEE.
ROEE is a measure of brand and business equity based on a function of consumer experience, engagement, and other factors. But what does that mean? Consumers’ connection with a brand now goes beyond traditional marketing channels. In the simplest terms, every single interaction a consumer has with a brand impacts their connection to it; not just what the brand says or how they advertise.
The first E, Engagement, focuses on how a brand speaks to its consumers; in this case, primarily online. When Engaging a consumer online a brand is taking the opportunity to educate the consumer, be it through visiting the website or sharing information on Facebook. These are opportunities for a brand to consumers who they believe themselves to be. The first E can be easier to get right, a brand controls their message and has time to refine it. The second E, Experience, is not only harder to control, it has the biggest impact on how a consumer develops a connection to a brand. How a customer feels when they step in the store, how the staff treats them, the quality of products, all contribute to the Experience. While all brands can control the Engagement, brands in the brick and mortar space have an especially good opportunity to control the Experience.
When crafting the Engagement + Experience for a brand there is one more wrinkle…perception. Epsilon found that what most brands sell doesn’t align with what consumers want to buy. One of the most poignant examples given was from the grocery industry. Grocery advertising often puts the focus on freshness and price; yet when consumers are asked what they look for in a store, the answer is trust and emotional connections. This makes sense, food is deeply personal. Does this give small businesses an edge when it comes to creating brand equity with their consumers? Absolutely. I discussed how Cuties Clementines approaches this in an earlier blog post, you can read it HERE.
Business is changing and as it does brands and retailers have to continue to redefine how success looks and feels. While we continue to trade on dollars and cents, brand equity is of growing importance. When you Engage a consumer and create a positive Experience around your brand, you can strengthen their relationship with your brand. The more you, as a brand, focus this dynamic the more you build brand equity with a consumer, which equates to sales. The relationship doesn’t include easily measureable ROI as it did in years past, but when understanding that ROI isn’t the only thing to measure you can reframe your definition of success.