For many medium sized businesses that are growing faster than you can keep track of, brand indexes are an important way of measuring how your brand is performing against key competitors. A brand index though is pointless if it’s not comparing your brand to similar brands, therefore there is an array of brand indexes across many different categories. Some are obvious, some not so much. In this article, we’ll be looking at what a brand index is actually is compiled of, then take a look at some of the different types of brand indexes out there at the moment.
A brand index is a ranking of how valuable brands are within a different category. This value is obtained by looking at different metrics received from public feedback about your brand. The specific metrics used can be different depending on who is compiling the index. Here are three common metrics used to calculate a brand’s worth.
Net promoter score: How likely someone is going to recommend your product to a friend or family member
Purchase intent: How likely someone is to purchase your brand again.
Unprompted brand recall: Seeing what brands a consumer relates to a certain category.
These three values are then added together to give a total score, also known as brand equity.
In terms of categories, these can differ massively. Nearly all aspects of life have brands associated with them in one way or another. Some obvious indexes maybe something like a fashion brand index or an electronics brand index. Usually, it’s big names that will dominate these indexes, and it is unlikely you’ll see your company penetrating the top 10. However, you can learn a lot about the market you’re in from how these brand indexes change from quarter to quarter. Hopefully, signposting to you what direction to take your company.
However, did you know there are health and wellbeing brand indexes? Or a snacks brand index? These are all fiercely competitive markets to be competing in. Also, when you think about it, they’re markets that rely heavily on brands. Take snacks for example, sales of these will often come about as a result of impulse purchasing. Brands can often be an overriding factor when it comes to impulse purchasing. So, if a brand is high on the snacks brand index, it can rely on being the first choice a lot of the time when it comes to these quick instinctive decisions.