Question

Topic: Branding

Opinions And Advice On A New Brand Equity Measure

Posted by Anonymous on 1/6/2005 at 1:38 AM ET 850 Points
Had a Eukeka moment this evening and would like to air it with y'all.

I am analysing lead source databases from 50 branch locations. Many sales leads come from sources named "Referral", House Lead (Customer called in and asked for salesperson no longer with the company), Prior customer, foot traffic, etc. The costs associated with these lead sources are $0.00. However, when evaluating the "Cost per lead " of the branch, these 'free' leads are added into the rest of the leads to get the average.

My opinion HAD BEEN that these 'free' leads are simple dilutions of the 'advertising costs per lead.' I always wanted to throw them out of the 'true' cost per lead calculation, saying that only PAID sources should be evaluated to guage advertising effectiveness.

Then the lights went on. These 'free' leads are the result of Brand Equity. They are a the result of residual advertising/PR exposure or direct experience with the company or simply its reputation in the marketplace. If I assign a value to these leads, I could put a hard value on the Brand Equity for a particular market.

1. Do you agree with this 'ham-handed' approach?
2. How should I assign the value to the leads. Should I look at the 'Cost per paid-for lead' and multiply by number of leads. Should I look at the profits generated by these leads? Should I add up the sales generated by these leads? Remember I can only choose one. and I am leaning toward the cost of the paid lead time the number of free leads.
3. Do you agree that we should average free and 'paid-for' leads into the advertsing efficiency numbers (since the 'free' leads may be from residual advertising effects?)

The points reflect asking three questions.
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RESPONSES

  • Posted by ReadCopy on 1/6/2005 at 3:30 AM Member
    I think your thinking is spot on, that we can assume that these FREE leads are brand generated.

    Not sure how these get rounded up into an equity measure, I'll give it a little thought.
  • Posted by Deremiah *CPE on 1/6/2005 at 7:58 AM Accepted
    D4Demand,

    Now just because I've spent too many years looking at balance sheets and journal entries sometimes making me number sick does not mean anything. I agree that the "FREE" leads do have a *CAV (cost associated value) with them but that's only measurable to you on the backside. And although that value can be calculated it could be worth more or less depending on what you earn as a result of what amount of business that particular lead brings in. That's similar to saying that a house may have a *FMV (fair market value) associated with it to come to some type of concrete value. But the truth is the house has another type of value associated with it that is hidden and can not be measured and I like to think of that as *EV (emotional value). Emotional value is what a house is worth to the buyer. Therefore a house is in actuality "only worth what someone is willing to pay for it" (so this cost is more unpredictable...could be higher or lower than it's associated cost *FMV).

    With that said I think you are devaluing the real value of your leads when you dilute them by mixing leads that cost you real money with those that did not cost you anything. If you do this you will also have to consider throwing in leads you get from random callers.

    My solution is do not mix them into the same bucket. Keep them separate. I hope that answers your question if it doesn't I'm going to sit down and eat a bowl of split pea soup. Is there anything else I can do for you?

    Your Servant, Deremiah, *CPE (Customer Passion Evangelist) former Number Cruncher AKA "Bean Counter" or "Split Pea Soup Counter"
  • Posted by Deremiah *CPE on 1/6/2005 at 11:06 AM Member
    D4Demand,

    I forgot to say the following in my last response.
    2. I would add up the sales generated by the leads you purchased.
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