The Strengths and Weaknesses of any existing business is through the eyes of the Customers. To find out what the Competitors are doing can all be realized when Businesses are able to monitor marketing metrics. If something is important to a Company, people are going to want to know how the Company does it and therefore it needs to be measured (Iacobucci, 2013)
In the conduction of these measures, it is very crucial for a Business to conduct an assessment phase and the strategic planning phase. Below are some of the measures that a Company may conduct over the Company goals.
- The Company needs to keep a close watch on the company’s profitability and must be able to measure this.
- The Company must also measure indicators of customer and employee satisfaction
- There has also been measures made on the Company’s dashboard. This may include other operating costs such as spending made on fuel and many other multiple dimensions in which can be measured.
Such measures can confirm whether a Company is performing and whether it has advantages over its competitors whilst other measure may confirm existing problems that the Company may strive to improve.
A single dashboard below gives a Company an indication of whether it is performing or otherwise.
http://key marketing Metrics to Facilitate Marketing Strategy.docx
The dashboard gives that a Company’s sales, market share are good. Profit margins is at a 50/50 position, not good nor bad, whilst Employee Satisfaction and Customer Satisfaction are in a very bad position for the Company. Moreover, the dashboard measures gives that the particular brand operates in a Monopoly like conditions, Sales and shares are very strong as the Customers does not have many alternatives, this however creates employee and customer in satisfaction. The Company’s low profit margins indicates that the Company is not managing its cost very efficiently. (Iacobucci et al)
Ambler (2008) discusses what marketing metrics can do for any organization:
- Brands’ activities in the market; for example, new product launches, price increases, changes in pack size, and so on
- How the market is reacting to these changes; for example, how buyers are buying, at what prices, and so on
- How brands’ market-based assets are holding up
Marketing metrics gives a baseline, which checks and balances and that Marketing performance, should be assessed using a combination of short-term cash flow, or profit, compared with a valid benchmark, e.g., a plan, and a proxy for the change in future cash expectations due to the marketing activities for a given period.
The Financial Measurement of Marketing Performance
Managers would like a single number, representing profit in some way, for each alternative ways of meeting customer needs. The plan selected would be the one with the highest number would be selected. They would like to assess performance by comparing the actual resulting number with the one predicted in the plan. We call this single number a “silver metric”, and it is the common goal of a number of methodologies such as ROI or DCF.
Return on investment (ROI) is used to compare capital projects where investments are made once and the returns flow during the following years. ROI is the net return divided by the investment or, more correctly, the incremental profit as a ratio of the incremental expenditure.
- ROI has become a fashionable term for marketing productivity and used to describe any type of profit arising from marketing activities.
- ROI gives Incremental sales revenue
- Ratio of cost to revenue
- Cost per sale generated Changes of financial value of sales generated
- Cost of new customer (sic)
- Cost of old customer retention
Discounted Cash Flow is the basic methodology for a number of apparently different techniques: net present value (NPV), brand valuation (Perrier 1997 cited in Amber 2002), customer lifetime value (CLV, Venkatesan and Kumar 2004; Gupta and Lehmann 2005), customer equity (Rust, Lemon, and Zeithaml 2004) and, usually, brand valuation (Ambler et al.2002).
This techniques can be used to compare alternative investments and also for regulating utility prices. There are few issues with the usage of DCF techniques for performance evaluation due to time, planning and comparison of alternative future scenarios; however, whatever the tools deployed, the performance of any organisation depends largely on its intended usage and positive outcome received.
Baker, (2016) in AdNews states that, Facebook admits to over – inflating key video view metrics. There was an error being reported in the video view metrics where it concluded that the average time watching video has been inflated by 80%. The Wall Street Journal has pointed out that publishers are impacted by this error as they were given incorrect information on how much time users are spending with their video content. Facebook confirmed that they had discovered an error on how they calculate their video metrics.
There may be flaws in measuring Metrics for any Businesses, hence this is something businesses must carefully and thoroughly conduct so that customers are not affected. Mintz (2013) finally states for managers to employ both marketing and financial metrics to assess the performance of the marketing mix activity. There may be financial uncertainty encountered, however it is expected that the greater the number of marketing versus metrics employed, better decisions are perceived for better performances.
By Jacinta Tupuola-Maua
Ambler, T, Roberts, JH (2008). Assessing marketing performance: Don’t settle for a silver metric
Griniute, Ilona, (2012) Measurement of Marketing Communications Performance:
Iacobucci, D. (2013) Marketing Management, MM4, Student Edition.