Measuring How Well Your Brand Performs: Using the BDI

It is a given that every product or service your organization offers does NOT appeal to everyone. In fact, it is likely that there are specific customer groups that are more interested in particular offerings than others. In today’s Metric Monday, I am going to explain how to do a Brand Development Index which will help you identify strong and weak segments (usually by demographics or geographics) for a particular product/service or type of products/services.

The application of this awareness can help you determine if there are pockets within your customer community that tend to purchase specific things more often than others, or why some pockets are under-purchasing compared to their peers. Ultimately, this will help you to create targeted communication strategies to encourage more usage/buying, or to create a product improvement plan to fill in any value gaps.

A Brand Development Index is a pretty straightforward calculation. Again, it is an measurement of how well a product/service performs within a given market group of customers, relative to its performance in the market as a whole. To begin with, you need to be able to specifically identify a target group. The more homogenous that group is the more likely it is your data can be acted upon with confidence. For example, choosing to select only by women may not give you the same confidence as selecting women who are frequent users and who have children in the home between ages 1-9. (NOTE: Whatever criteria you choose by should be linked to your overall research goal.)

Okay, once you have this group identified add up all the sales for a particular product/service by that target group and divide it by the total number of people in that group (you can also divide by households if you don’t have individual data). Hold on to this number. Now, in a separate calculation divide the total product/service sales by the total persons/households. Take your first number and divide it by this new number.

Your calculation should look something like this:

Because your BDI is a measurement of sales by a particular product/service per person (or per household) within a specific demographic group, compared with the average sales per person/ household in the market as a whole, you’re able to quantitatively see how parts of your customer community are buying what you’re offering.

Bottom line: Measuring the total sales, registrations, etc for a product, service, or event is sufficient if you’re needing only a top line number to work with. But if you are interested in creating specific strategies for groups within your community, you need to understand how they’re using your products and services. And because you’re creating an index number that can be benchmarked, now you can test to see if specific marketing messages or campaigns are making an impact.

-- David Kinard, PCM