ROS and Price Elasticity.

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Chipotle raised prices last year on its beef burrito 4-6% and consumers didn’t blink. They happily paid. Why is that? The Bain and Boston Consulting nerds might say Chipotle has great price elasticity. I say Chipotle offers great ROS, return on strategy. One of the best ways to measure return on strategy is to poll current customers about price. “Would you continue to buy Hoegaarden if the price were raised 5%?” a market question might read. If the answer is yes, one might follow up with “Why” or “What is it about Hoegaarden that makes you such a fan?” The answers to the questions are influenced by marketing. And brand strategy – defined as an organizing principle for product, experience and messaging.

When a brand has a codified organizing principle, marrying what the product does well with what consumers want most, it has a strategy. Only then can return on that strategy be measured. In market share. In dollars. And in sense (sic).

As you market your products and services, please don’t forget to measure return on your strategy — not just the return on your tactical investments. Peace!