On Measuring Brand Value: Why Choosing the Right Loyalty Metric Matters

KPIs (Key Performance Indicators) are useful for tracking how a brand or its products are perceived over time and against competitors. Companies may do their own research to track these metrics or utilize the benchmarking services of outside organizations like the American Customer Satisfaction Index or JD Power.

Some common metrics, among others, include:

• satisfaction,
• likelihood to recommend,
• likelihood to renew or repurchase, and
• switching intent.

And whether a company tracks one or multiple of these, the key is to track the particular metric most meaningful to your organization. Stakeholders certainly have their opinions, but what about the most important voice, that of customers?

Well, a study conducted on product reviews may help shed some light as to how consumers may perceive these KPIs based on their language. In a recent Harvard Business Review article, the authors of a paper that appeared in the Journal of Retailing in 2022 explain how.

Jha, Biswas, and Ravula analyzed real online product reviews (over 100,000!) in which buyers were able to mark whether a review was helpful or not. The authors discovered that reviews marked helpful aligned with those that contained specific mentions of either recommending or repurchasing the good/service in question. In other words, statements of loyalty stood out.

Repurchase Intent vs. Recommendation

That’s useful, but can we go further? It’s helpful to know consumers are persuaded by loyalty metrics, but does the specific loyalty metric matter? To answer this, the authors conducted experiments on 2,000 participants by asking them to consider reviews containing mentions of either recommendation or repurchase across various goods/services. And they found something interesting:

“Indeed, we found that which loyalty expression was the most persuasive was dictated by how frequently that item was likely to be purchased. In experiments where participants were asked to imagine they were buying items they might regularly pay for, like wine or a dental cleaning, reviews with repurchase intentions were the most persuasive. When participants were asked to evaluate reviews pertaining to infrequently purchased goods or services, like having a dental crown placed, they found reviews recommending the service to be the most persuasive.”

The authors hypothesized that the reason for this could be simple logic. For a product that is bought infrequently, like a car, perhaps a review saying they’ll repurchase the car again would be seen as not credible. And reviews for frequently purchased products are seen as more credible when the reviewer specifies repurchase intent vs. recommending that item. I’m not sure this exactly affirms my pet peeve with likelihood to recommend questions (when was the last time you and a few friends at a bar discussed which toothpaste you’d recommend?!), but I digress.

In all, I believe these findings should encourage companies to select the specific KPIs they use as benchmark measures carefully and purposefully. Consider the product itself, stakeholder goals, and consumer alignment to maximize return on investment. Afterall, if consumers are paying attention to the semantic nuances among expressions of loyalty, marketers should as well.

Reference: “Research: What Consumers Find Persuasive in Online Reviews” Subhash Jha, Abhijit Biswas, and Prashanth Ravula. Harvard Business Review. February 18, 2025.