Marketing is no longer characterised by spontaneous investments. Marketing performance is controlled and diagnosed on a continuous basis, making the need for simple, but comprehensive measures/metrics to do so even more important. There are aspects of Marketing that can be identified, separated and measured.
The effectiveness of a Company’s marketing department is often measured on the number of new clients and customers, the amount of leads generated and successful follow up on these leads. The main objective of any company that intends on being a major player is not only to create new customers, but to retain the ones they already have.
By taking the cost of different marketing activities and comparing them against the number of sales or new customers, the success of these activities can be determined. In addition, it allows for comparison between different marketing initiatives. This facilitates the creation of an environment in which the customer can relate to the company and creates the appropriate condition for the making of sales.
The effectiveness of a company’s marketing department can be quantified by sales targets reached the enhancement of profits and improved bottom-line performance. This is achieved by making the marketing function more accountable as it ensures a continuous testing of its effectiveness through the application of scorecards. These scorecards, or metrics, allows for the development of a set of measures and provide a means through which the performance of marketing activities can be measured.
One of the most important questions that should be asked is how many metrics should be used to enable measurement to be comprehensive. There are cast amount of different metrics, but not all of them are equally important or relevant. The key is to identify those metrics that are most relevant to the particular situation of the company and those that evaluate what is really important. Fundamental metrics should include quantifiable metric such as Return on Investment and number of new customers, but also non-quantifiable metrics such as brand awareness and brand equity. Most often these non-quantifiable metric are the ones that determine the long-term survival and profitability of a company.
TABLE OF CONTENTS
How to ensure that marketing activities are measurable
Reasons for growth in the use of marketing metrics
3.1 A corporate trend for greater accountability of value added activities
3.2 Discontent with traditional metrics
3.3 Availability of IT and Internet Infrastructure
The direction in which metrics can lead a company
4.1 From non-financial to financial
4.2 From backward looking to forward looking
4.3 From short-term to long-term
4.4 From micro to macro data
4.5 From independent metrics to causal chains
4.6 From subjective to objective
Metrics that are often used
5.1 Economic value added
5.2 The Balanced scorecard approach
5.3 Brand Equity
5.4 Relational Equity
5.5 Customer Equity
General categories of metrics
Metrics used for measuring of marketing success
7.1 Customer acquisition metrics
7.2 Awareness metrics
7.3 Customer retention metrics
7.4 Lead generation
Most modern day marketers realise the importance of metrics, measurement and accountability, but few are aware of the different metrics available to evaluate strategy, tactics and business performance. An investigation of key metrics can put an organisation in the position to develop and refine new marketing initiatives to increase market share. Therefore it can be said that metrics lead the way to cost effective...
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