Marketing Metrics that
In today's complex business world organizations are faced with the growing requirement to integrate processes, organization, information, and technology. With each of these integration points having significant impact on the immediate and effective operation of the organization. The unfortunate reality is that very few organizations "do integration" well.
Even worse than this grim reality is the fact that while these organizations struggle to integrate these components they are failing to recognize and fully utilize something of equal if not greater importance to their continued growth - marketing.
At a high level, marketing has always been about generating profitable revenue through brands that enable effective customer acquisition and management. However, to achieve this tremendously ambitious - yet mission critical goal - requires more specific and direct goals, such as obtaining a greater market share than that of key competitors, establishing the preeminent brand in the minds of customers and prospects, and reaching superior levels of customer satisfaction and retention. All of this leads to greater profitability and continuous market positioning and improvement.
The marketing function is arguably the greatest asset most organizations have at their disposal - especially when integrated effectively. Even those who realize how important marketing is are often misguided in how they focus and apply their marketing activities and resources.
Too many organizations are focused on short-term strategies and results. By focusing on and emphasizing exclusively on the short-term return on investment (SROI) impact of marketing activities, organizations and their marketers are ignoring something far more important in building, establishing, and managing effective and profitable brands. Such a narrow focus, with only short-term objectives in mind, is blind to the big picture. And this narrow focus misses at the expense of a sustainable future.
If there is one thing that many chief level executives have learned (many the hard way) over the last few years, it's this: Effectively managing marketing is more important and has greater impact on the top, middle, and bottom line than any other business function, period. They may not openly admit it but it is happening - they are awakening to the reality of the hidden marketing factor.
Just about any organization can hire and create functional departments - all of which are likely necessary and important to the organization. However, the only sustainable source of competitive advantage lies in how well the marketing function is managed and utilized. No other business function is so integrated with customers, partners, product development, market awareness, competitive intelligence, lead generation, customer and partner acquisition, retention, revenue, customer and market feedback, sales, etc. than is marketing.
From Motion to Metrics
Given the more recent critical focus and attention on marketing - it's clear that corporate leadership is looking for more tangible measurements and results than ever before from marketing. Management is looking for metrics. Marketing needs to find and apply the right metrics.
Marketing needs to take a disciplined approach to using accurate, timely, and meaningful marketing metrics. This of course begs that many, if not all, of the following questions need to be addressed:
None of these questions can be answered easily or in isolation. To measure how well marketing efforts impact the top, middle, and bottom lines, build an ever-growing and loyal customer base, it's imperative to identify and use the metrics that are critical to the continued success and growth of the organization. These metrics can not be identified or selected without first addressing the above questions.
Metrics in Moderation
Just as it is important to have and utilize metrics, it's just as important to avoid having too many metrics in place. The use of too many metrics can create metric paralysis and disconnect from strategy. Organizations new to metrics should start with simple steps and metrics early on and then gradually migrate toward a more comprehensive metrics and measurement program and system as the success and support builds momentum within the organization.
For metrics to be relevant and effective to an organization and its marketing function, the metrics must:
Metrics that meet these help determine an organizations true success and progress. Relevant metrics help and empower marketing in tracking how well their marketing objectives are being accomplished.
Make Metrics Matter
Today, there continues to be much discussion about two current "fads" of marketing: acquisition and retention. These two pursuits are not new or unusual to marketing. However, with the recent emphasis on them you would think that they were.
Almost all organizations are in business to both acquire new customers and to retain those customers. So what metrics should be used to measure the effectiveness of acquisition and retention-based marketing efforts? A quick list of such metrics for acquisitional efforts would likely include these and more: rate of customer acquisition, awareness levels, market share, cost of customer acquisition, program ROI, etc. While customer retention metrics would include: retention rate, brand equity, RFM, net promoter measure, customer life-time value (CLTV), etc.
Metrics offer direction, accountability, and credibility for the marketing function - all of which unfortunately is sorely needed. When implemented and utilized correctly, metrics reveal marketing strategies, concepts, programs, and campaign performance results - both good and bad.
In today's world of shrinking marketing budgets, it's essential to link marketing metrics to marketing and business strategies. Marketing must make metrics matter more ... today.
Bray J. Brockbank has 15 years successful experience in marketing, management, and consulting. Bray has also been an adjunct marketing and management instructor at a respected North American college. He can be reached via email at BrayJB@hotmail.com .
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