A Forward-Looking Metric
While most corporate leaders would tell you they want to be able to see where they are going, instead of where they have been, the market research available doesn’t usually get them there. To assess future challenges and strategic options, top management needs more forward-looking data and analytics, especially in relation to rapidly changing stakeholder expectations and competitive pressures. What’s needed is an early warning system.
Momentum measures which brands are on the rise or decline, based on ‘momentum polling’ used frequently in political campaigns to anticipate where voter sentiment is headed. Learning from political polling techniques, Lepere Analytics created a simple, yet robust metric for Momentum using a three-level assessment of a brand relative to its competitive set …”Is the brand gaining ground, losing ground or staying the same?” When measured among a distinct segment of the public we have labeled “expert consumers,” Lepere Analytics has found that the Momentum metric had a high correlation, over several years of testing (2008-2011), with market-share changes, stock movement and GDP trends.
In our partnership with FleishmanHillard, we also discovered that Momentum is an indicator of an Authenticity Gap—the measure of how successfully peoples’ expectations of the category are being met (or not) by their actual experiences with companies and brands in an industry category. Momentum is being used by organizations to monitor performance against key competitors.
For example, knowing the rate of change in Momentum helped the luxury Four Seasons hotel chain track how its 50th anniversary celebration would affect its revenue per room in the future. From September 2010 to March 2011, the momentum score anticipated the 9-percent increase experienced during the commemoration, compared to the same period a year before, versus the 7.9-percent reported by the industry as a whole.
Who’s Got the Big Mo?
The categories that appear to have the greatest momentum in meeting consumer expectations in the United States, China and Germany where the research was conducted are: on-line shopping, major appliances, tablets and e-readers, and pharmaceuticals.
Those with the weakest momentum are the vacation and travel, Internet service provider and wireless carrier categories. Similar to the top-performers, these three fall at the bottom across all three countries.
Knowing how fast your organization is gaining or losing ground on competitors gives you an edge. It is an early warning system that helps alert managers to threats and opportunities and allows the organization to create sustainable relationships with audiences—real Authentic Engagement—that drives progress and growth.