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The BrandScorecardSuccessfully managing the customer experience is the ultimate goal.

By Lawrence A. Crosby and Brian S. Lunde

Customer b o n d i n g

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I N T H E I R pioneering Harvard BusinessReview articles and book, The BalancedScorecard: 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. Thescorecard balances short- and long-term objectives, financial and nonfinan-

cial measures, lagging and leading indi-cators, and external and internal per-formance perspectives. The balancedscorecard serves to communicate andalign the organization around the busi-ness strategy. Companies around theworld have adopted some version ofthe balanced scorecard as a means of organizing their corporate KPIs (keyperformance indicators).

One of the more recent developmentsin performance measurement/manage-

ment is the concept of the brand score-cardwhich is narrower in scope thanthe balanced scorecard. The brand score-card views performance through a cus-tomer-focused brand lens. Highlyappropriate for companies managingmultiple brands, it also applies to single brand companies. Its premise is thatfavorable business outcomes accrue tocompanies whose brands have strongdemand pull. This scorecard aligns busi-ness functions around creating an excep-

tional (i.e., differentiated and relevant) branded experience across the entirelandscape of customer touchpoints todrive higher levels of brand attractionand loyalty. In effect, the brand score-card integrates performance, brand, andcustomer experience management.

Whirlpool Corporation, a leadingmanufacturer of appliances, has rolled

out a version of the brand scorecard con-cept to all of its appliance brandsaround the world. Whirlpool heraldsthis as a major step forward in its strate-gy of brand-focused value creation.

A brand scorecard should beexpressed on one page. This createsorganizational focus around a limitedset of strategic goals, key indicators, andthe drivers of brand success with themost impact. In most companies, thescorecard will be deployed via a secure

portal using a dashboardand it mayeven feature real-time data streams.The scorecard represents a layered

causal model of performance metricsfrom Level 4 up to Level 1 (see Exhibit1). Lower level measures tend to beleading indicators of change, whilethose at the upper end tend to be lag-ging indicators.

Brand Promise StatementThe brand promise statement serves

as the unifying strategic principle thatholds the brand scorecard together. The brand promise is a succinct expressionof how customers can expect to experi-ence the brand across all touchpoints.

Marketplace and Financial OutcomesIf the brand promise is compelling

and consistently re i n f o rced and deliv-

e red, results will be reflected in measure sof key marketplace and financial out-comes. Commonly sought-after brandoutcomes 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 periodactual, current period target, current

period projected, and next period fore-cast (the definition of period willvary by company).

Demand PullPositive business outcomes are best

assured when there is a strong customerfranchise for the brand. Push strate-gies can be effective, but (in the longrun) it is much easier to secure favorabledistribution, maintain margins, and pro-tect/grow share when the ultimate buy-

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ers want your brand, seek it out, andaccept no substitutes. For manufactur-ers, demand pull is necessary to pre-serve a balance of power in channelsof distribution.

Key indicators of demand pull arecustomer attraction and customer loyalty.Attraction has traditionally been assessedusing 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 theconversion rates across adjacent cate-gories). But the validity of this hierarc h yhas been challenged, and more compa-nies are relying on scaled and/or re l a t i v em e a s u res of brand attraction such as atti-tudinal equity. Non-survey measures of customer attraction could include traff i ccounts 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 hasits corporate adherents. The three mostpopular appear to be a customer satis-faction index, a customer loyalty indexor a Net Promoter Score. Generally,these measures gauge behavioral inten-

tions such as the customers willingnessto continue buying, expand the relation-ship, and advocate for the brand.Non-survey measures of loyalty mightinclude actual buying history, reten-tion/defection rates, share of wallet,and number of referrals.

Touchpoint Improvement PrioritiesThe next layer of metrics in the Brand

Scorecard concerns touchpoint improve-ment priorities. Common touchpoints

include such things as: advertising, Website, point of purchase, salesperson,product/core service, order and deliv-ery, billing, customer service/call center,repair, and sponsorships. While there isno agreement on the number of priori-ties a brand should have, three to five isa rule of thumbso that effort andinvestment 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. Usingvarious listening posts (e.g., focusg roups, surveys, complaints, blogs, data- base mining, and observation) and oftenadding sophisticated statistical analysis,the objective is to identify weak perform-ing touchpoints that are critical to cus-tomer attraction/loyalty. For each of thepriorities matched, performance met-rics are identified that reflect the externalcustomer perspective and the internalp rocess perspective. To u c h p o i n ti m p rovement is gauged by changes inperformance scores over time.

Appropriate internal metrics forassessing touchpoint performance arethose having a causal influence on theexternal metrics. This requires that the brand does its homework to test thelinkage between external and internalmetricsfirst on a cross-sectional basis,and then longitudinally.

Improvement Initiative PipelineThe 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. Competitoractions and rising customer expectationsrequire companies to continuously inno-vate. They need to constantly fill thepipeline with new ideas to create theexceptional customer experience.

There are several options for initia-tive pipeline metrics. One is to reportthe top projects, their funding levelsover time, and expected impacts on thetouchpoint priorities. Another is toexpress the total funds allocated to cus-tomer experience projects as a percentof selling, general, and administrativeexpense. A goal would be to increasethat ratio over time, as an indicator of relative investment in customer experi-ence management. Yet another optionis to report the number of initiatives inthe pipeline, at various stages of devel-opment. In this case, the goal is to keepthe pipeline full.

Delivering the Pro m i s eThe creation of a brand scorecard is

just the tangible manifestation of a morecomplex customer experience manage-ment process. The power of the conceptis the transparent manner in which itintegrates activities around a brandpromise, helping to ensure the consis-tent delivery of a differentiated andrelevant customer experience. "

About the Authors

Lawrence A. Crosby is Synovateschief loyalty architect. He may bereached at larry.crosby@synovate.com.Brian S. Lunde is senior vice presidentof business development andmarketing for Synovate CustomerExperience. He may be reached at brian.lunde@synovate.com.

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" Exhibit 1Form 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 Internalindicators indicators indicators indicators indicators indicators indicators indicators