Like all other divisions in a company, senior management frequently wish to know if what the marketing division does, works. Marketers themselves also want to be able to measure the effectiveness of strategies and marketing performance to evaluate success, failure and any change in strategy required. A way to gauge this is to use marketing metrics, a series of measures that quantify performance. Sounds easy, right? Wrong.
Although marketing accountability like financial accountability is now seen as essential, there lie many challenges in integrating the right marketing metrics and determining the best way to measure the contribution of the marketing strategy to the bottom line. According to Pauwels, to be truly accountable marketers must first define the key results, use the right metrics and then act on the collected insights. Many different models of what constitutes the ideal marketing evaluation techniques exist and there appears to be no ‘one size fits all’ approach. Rather there is an agreeance that brands should use a combination of different marketing metrics dependent on the intended purpose Some of the common marketing metrics found throughout the literature include financial indicators of performance, measurement of customer behaviour, measurement of the movement of customers and measuring the cost of marketing activities.
One company that appears to be utilising marketing metrics is MYER – currently going through its biggest brand revamp in the department stores history. The ‘New MYER’ is a five year ‘customer-led’ plan to change MYER from its one size fits all approach to a more sophisticated, localised offering. The new marketing strategy for the company is based on 4 strategic priorities which includes:
- a customer led offer with new brands
- a wonderful experience for customers,
- development of omni-channel shopping
- productivity step change
Following a two-decade slide in sales and earnings, MYER identified a need to change strategy. Customer value, that is profits earned from having a particular customer, was deemed the priority. Marketing strategies that align with Primary Customer Groups has been a focus of the ‘New MYER’. Recent financial metrics suggest that after 12 months, the ‘New MYER’ model is working as predicted by senior management, with Myer increasing sales by 2.9 per cent to 3.3 billion, compared with the general apparel retail industry, which only grew by 0.7 per cent in sales over the 4th quarter of the 2015/2016 financial year.
Marketing Activity Metrics
As the ‘New MYER’ has significantly changed its marketing communication channel mix to connect with its customer more, measuring the types and mix of marketing strategies and their impact on consumers is important. Measuring reach, recall and number of new customers would determine the effectiveness of their new marketing mix. With the ‘New MYER’s’ skew towards the online shopping environment, measuring hits on their website and how this translates to sales would be useful for determining the change in marketing performance.
Measuring buyer behaviour tells MYER about its market penetration and market share, including which brands are most popular and how frequently consumers are buying certain types of products. MYER through its behavioural metric analysis has determined what the ‘high value customer’ looks for in its store. By introducing brands including TOPSHOP, Seed and Veronica Maine, amongst others, they are hoping to grow their market share. Continued analysis of these behavioural metrics will help MYER determine its success with these new brands over time.
As the ‘New MYER’ marketing department has identified, their Primary Customers are no longer seeing a distinction between bricks-and-mortar and online retail, so its marketing strategies are working across both domains in an integrated way. Measuring brand awareness, attitude, intention to buy a brand, and customer satisfaction and service quality received, are all important variables in both the digital business, as MYER grows its online shopping arm, and in the assessment of newly added brands to determine the impact of introducing them at MYER stores.
Customer Profile Metrics
The ‘New MYER’ has identified is customer loyalty card, MYER ONE as becoming increasingly important as they personalise their customer experience. Data collected from the loyalty card will allow MYER to further analyse their customers demographic profile and relate this to their marketing strategies and purchase behaviour.
The marketing metrics described here are just some of the indicators that can be used to measure the performance of the MYER marketing department and determine the success of its strategies. As observed, the different metrics are all seemingly interrelated and their use should be guided by evaluation with regard to the key strategic priorities. As the 5 year ‘New MYER’ plan continues to roll out, it will be essential that the MYER marketing department stays abreast of these crucial metrics to both measure their performance and be able to adapt and act on the collected insights to stay ahead of their competitors.