Chapter 15

Question 1

Define marketing metrics

Answer 1

Marketing metrics is the set of measures that helps marketers to quantify, compare and interpret their marketing performance.

Question 2

Show the evolution of marketing metrics over the years

Answer 2

Marketing performance metrics have moved in three consistent directions over the years:

• Financial -> non-financial output measures
  The purpose is to measure the intermediate concept between the marketing programme and the resultant financial output, as there is often a longer-term effect of programmes.
• Output -> input measures
  This takes a step before intermediate measures to assess the effectiveness of marketing inputs. It’s done with marketing audits, and assessing efficiency of marketing implementation, analysing the degree of marketing orientation in the organisation.
• Unidimensional -> multidimensional measures
  An integrated marketing campaign is by definition a multidimensional construct. Multidimensional measures include multi-variate data analysis techniques, such as factor analysis.

Question 3

Marketing metrics can be classified into three different perspectives:

Answer 3

• External vs internal metrics
  External metrics evaluate external performance relative to competitors. Example: market share, customer satisfaction.
  Internal metrics utilise data from within the company to measure performance. Example: customer retention rate, number of complaints.
• Short-term (tactical) vs long-term (planning) metrics
  Short-term metrics measure the results of tactical marketing campaigns. Example: sales conversion ratios of leads generated.
  Long-term metrics help build for the future. Example: customer lifetime value, brand equity.
• Customer vs financial metrics
  Financial measures are typically used as they’re easy to generate and typically spoken about in boardroom meetings. Example: gross margin, sales growth.
  Customer metrics are measurements of behaviours, attitudes and intents, which are potential indicators of marketing performance.
  Customer metrics can be split into:
  Observable measures (include behaviour like purchasing activity) and unobservable measures (including constructs of perceptions or attitudes).

Question 4

What are the traditional metrics that are used?

Answer 4

• Financial metrics
  Sales metrics, profitability metrics, marketing budget metrics.
• Marketing activity metrics
  Market share metrics, response rate metrics, quality of customer service, sales force productivity, advertising effectiveness, product innovation, brand tracking metrics
• Customer metrics
  Customer satisfaction, awareness (top of mind, prompted, ad), loyalty.

Question 5

What are the advanced metrics?

Answer 5

• Advanced financial metrics
  Demand forecasts, brand equity, customer lifetime value, customer equity.
• Digital marketing metrics
  Visits/visitors, clickthrough rate, cost per click, conversion rate, friends/followers, downloads, PAR and BAR, sentiment analysis.
• Customer metrics
  Customer margin, acquisition, retention.

Question 6

What is a marketing dashboard?

Answer 6

It’s a one-page or screen, easy-to-read summary of key market metrics, often graphically depicted, where the organisation monitors an array of different metrics for strategic marketing performance.

Question 7

What are the benefits of developing a marketing dashboard?

Answer 7

• Communicates a clear set of objectives throughout the firm
• The interrelation of constructs is explicitly articulated
• It provides one place where all measurements come together