Entrepreneurs often invest a significant amount of money in traditional marketing methods such as TV, print, and digital advertisements, but frequently fail to achieve the desired outcomes. In order to enhance their marketing productivity ratio, there are several effective tips that entrepreneurs can follow to identify gaps in their current marketing strategies and tools, and take appropriate measures to bridge those gaps. To conduct a gap analysis of your brand's marketing, it is important to focus on two critical ratios.
PURCHASE ACTION RATIO
The purchase action ratio is an essential metric that reveals the number of individuals who have purchased your brand among those who are aware of it. This ratio is calculated using the following formula: Brand Awareness minus Brand Purchase (Action of buying) equals Purchase Action Ratio (Brand Awareness – Brand Purchase (Action of buying) = Purchase Action Ratio).
By measuring the purchase action ratio, you can gain insight into the actions people take when it comes to buying your product or service.
For instance, let's take Baba Sehgal, the popular Indian rapper, who has a massive brand awareness. However, his purchase action ratio is very low, indicating that despite being aware of his brand, people are not purchasing it. Similarly, Indian dancer Rakhi Sawant also has a substantial brand awareness, but the action around buying her brand is very low. Therefore, it's crucial to keep track of your purchase action ratio and take necessary steps to improve it.
BRAND ADVOCACY RATIO
Brand advocacy ratio is a key metric that refers to the ratio of customers who have purchased your product compared to the number of customers who have given reference of your product. When customers become advocates of a brand, they essentially become brand promoters, which is highly beneficial for businesses. To calculate the brand advocacy ratio, you need to subtract the number of brand purchases from the number of brand advocates. This metric is crucial for businesses to track, as it can help them understand the effectiveness of their marketing strategies and the level of customer satisfaction with their product or service.
Formula: Brand Advocate – Brand Purchase = Brand Advocacy Ratio
FIVE ‘A’S FRAMEWORK
In order to effectively implement the two ratios previously discussed, it is important to understand and utilize the Five 'A's Framework. This framework consists of five distinct components that are crucial to the success of any business.
The first 'A' stands for Awareness. This refers to the number of individuals who are aware of your product or service. It is important to have a strong brand presence and marketing strategy in order to increase awareness and attract potential customers.
The second 'A' is Appeal. This component measures how well your product or service resonates with consumers. It is important to understand your target audience and tailor your messaging and branding to appeal to their specific needs and desires.
The third 'A' is Ask. This refers to the number of inquiries or requests made about your product or service, such as pricing or availability. It is important to have a clear and accessible method for customers to make these inquiries, whether it be through a call center, landing page, or retail store.
The fourth 'A' is Act. This component measures the number of individuals who have actually purchased your product or service. It is important to provide a seamless and positive customer experience to ensure repeat business and positive word-of-mouth referrals.
The final 'A' is Advocate. This refers to the number of individuals who not only enjoyed your product or service, but also recommended it to others. Advocates are crucial to the success of any business as they can help increase brand awareness and attract new customers. It is important to continually engage with customers and provide exceptional service to foster a strong relationship and encourage advocacy.
In this case study, we will be discussing the 5 ‘A’s and how they relate to a YouTube channel. The first ‘A’ is Awareness, which refers to the number of people who are aware of your YouTube channel and watch your videos. Suppose there are 10 million people who are aware of your channel and have watched your videos.
The second ‘A’ is Appeal, which refers to the number of people who were appealed to and subscribed to your YouTube channel. Out of the 10 million viewers, you appealed to 1 million people who subscribed to your channel. To calculate your Appealing Ratio, you can use the following formula: Appeal ÷ Awareness X 100 = Appealing Ratio. In this case, the calculation would be 1 million (Subscribers) ÷ 10 million (Viewers) X 100 = 10%. The Appealing Ratio tells you about the quality of your brand’s awareness campaign.
The third ‘A’ is Ask, which refers to the number of people who made an inquiry about your product through call and landing page out of the 1 million subscribers. To calculate your Ask Ratio, you can use the following formula: Ask ÷ Appeal X 100 = Ask Ratio. In this case, the calculation would be 10k (Ask) ÷ 1 million (Appeal) X 100 = 10%. Therefore, only 10% of people, which is 10K people, made a purchase inquiry out of 1 million who watched your videos. However, 90K people are still watching your videos but have not shown interest in purchasing your product.
The fourth ‘A’ is Act, which refers to the number of people who actually purchased your product out of the 10K people who made a purchase inquiry. To calculate your Act Ratio or Purchase Action Ratio, you can use the following formula: Act ÷ Ask X 100 = Act Ratio. In this case, the calculation would be 6,000 (people purchased) ÷ 10 K (people enquired) X 100 = 6%. Therefore, out of 10K people, only 6,000 people, which is 6%, actually purchased the product.
The fifth and final ‘A’ is Advocate, which refers to the number of people who became your channel partner and referred your product to others out of the 6,000 people who purchased your product. To calculate your Advocacy Ratio, you can use the following formula: Advocate ÷ Act X 100 = Brand Advocacy Ratio. In this case, the calculation would be 300 ÷ 6000 X 100 = 5%. Therefore, out of 6,000 people who bought your product, 5% of people became your advocate.
MISTAKES AND SOLUTIONS FOR 5 ‘A’S FRAMEWORK
Many brands make the mistake of investing their entire marketing budget on brand awareness while neglecting other key steps in the process of converting that awareness into actual purchases and advocacy. This can be a costly error that may lead to limited sales and reduced brand loyalty. Fortunately, there are several ways to identify and solve gaps in implementing the 5 'A's framework.
One of the most common implementation mistakes is focusing too much on awareness and not enough on appeal. If people are aware of your brand but are not enticed to connect with it, it may be time to improve your marketing communication. Short-term courses, such as those offered by Bada Business on advertising, marketing communication, and presentation, can help you address this problem.
Another common issue is when people ask about your brand but do not make a purchase. This means that they like your brand, but something is holding them back from making the final decision. In this case, content marketing can be a powerful tool. Informing people about your brand through infographics, digital marketing, and free videos can help build trust and increase the likelihood of a purchase. Offering free solutions or first-time user discounts can also be an effective way to attract new customers.
If people are asking for your product but not buying it, then there may be an issue with your sales team, distribution network, or CRM. Addressing these issues through training programs and building a robust distribution network can help improve sales performance.
Yet, if people have purchased your product but are not returning or referring it to others, it could be due to product quality or a lack of loyalty or referral scheme. Improving your product quality and offering loyalty and referral programs can help turn every customer into an advocate for your brand.
It is essential to identify where your business is stuck in the 5 'A's framework and take steps to address the issues accordingly. By doing so, you can create a more effective marketing strategy that leads to increased sales and brand advocacy.
As a marketer, it's essential to keep a track of your brand's marketing productivity ratio. This can be achieved by measuring it on the parameters of 5 'A's - Awareness, Attention, Acquisition, Activation, and Advocacy. By focusing on these parameters, you can identify the areas that need improvement and work towards increasing your brand's reach and impact.
To improve your marketing communication, it's crucial to train your sales team and build a robust distribution network. These are the two key factors that play a vital role in converting leads into sales. By providing your sales team with the necessary training, you can ensure that they have the skills and knowledge required to sell your products effectively. Similarly, by building a strong distribution network, you can ensure that your products are available to customers in all the right places.
In today's digital age, content marketing has become a crucial component of any marketing strategy. By creating excellent content that informs and educates people about your brand, you can increase your brand's visibility and reach. Infographics, digital marketing, and free videos are all effective ways of communicating your brand's message to a wider audience. Additionally, by retargeting your content marketing tools, you can help customers make informed buying decisions.
To attract new customers, it's essential to offer them something of value. This could be in the form of first-time free solutions, free service, or a discount scheme. By providing these incentives, you can encourage customers to try your products and services. Once they've experienced the value that your brand offers, they're more likely to become loyal customers.
Product quality is another crucial factor that can influence customer loyalty. By improving the quality of your products, you can ensure that every customer becomes your advocate. This means that they'll not only continue to buy from you but will also recommend your brand to others.
Finally, it's essential to offer loyalty and referral programs to your customers. By incentivizing them to refer new customers to your brand, you can increase your customer base and create a loyal following. These programs could be in the form of discounts, free products, or other incentives that add value to the customer.