As big companies wade through their sea of big data, marketing managers are wondering how to make sense of all the metrics. In fact, there are so many metrics out there that it’s challenging to know what to measure.
Measure what counts
The CEO and the CFO will tell you profit and revenue are the two metrics that are the most relevant. They want to know marketing performance metrics that relate to revenue and profit. Did the marketing campaign increase revenue (marketing performance) and how much profit are we gaining from new customers acquired from the marketing program (conversion ratio)?
But measuring what increases the bottom line today is not going to give you the long view that’s required in marketing in order to achieve impact. Building a brand, for example, takes consistent messaging through multiple channels over a long period of time. The best we can do in this case is measure the incremental value of customer generation.
Know your target market
How loyal a market is will determine their tendency to promote your company by word of mouth. This results in a powerful means of developing strong brand recognition in the mind of the consumer. The main question to ask here is “how likely would you be to recommend the product to someone?” The answer will reveal how favourable the product is in their mind.
I think one of the best movies that shows how well metrics work is Moneyball. Yes, the one starring Brad Pitt. In it, the long time cronies picked new players based on statistics that are flawed (but it was the way they always did things). Along comes Billy Beane (aka Brad Pitt) who uses other metrics that turn out to be more relevant. This type of evidence-based approach is what the marketing department needs to focus on. Watch the movie…you’ll see what I mean.
Start small, but start today. Measurement needs a baseline and the sooner you start tracking your results, the sooner you can measure your success. Here’s a great website that gives an overview of easy to understand metrics you can consider for your marketing efforts. Its author is Joseph Raymond Roy: http://www.marketing-metrics-made-simple.com/