Lecture - Meaningful
Marketing Metrics
Q&A UPDATED
Define Marketing Metrics and discuss what they are used for
Marketing metrics are performance measures/indicators, marketers use to asses the
health of their brands (like doctors) and the effect of their marketing efforts.
Marketing manager...
Lecture - Meaningful
Marketing Metrics
Q&A UPDATED
Define Marketing Metrics and discuss what they are used for
Marketing metrics are performance measures/indicators, marketers use to asses the
health of their brands (like doctors) and the effect of their marketing efforts.
Marketing managers need measurement to ASSESS & GUIDE THEIR MARKETING
ACTIONS. Marketing metrics let managers know how the brand and business is
performing; and marketing metrics can provide DIAGNOSTIC INFORATION on how to
improve things. Without a comprehensive set of meaningful metrics, a marketing
director simply cannot tell if they are doing a good job or not.
Who is in charge of using, collecting and interpreting results from marketing metrics?
The marketing department is usually responsible for collecting these metrics, and is
supposed to have specialist knowledge about how to interpret them.
What are marketing metrics used for?
- By monitoring and analyzing marketing performance metrics, brands can;
1. increase their competitive intelligence,
2. assess their market strengths and weaknesses,
3. make calculated budgetary decisions across the marketing mix.
4. Allows marketers to demonstrate how marketing generates revenue and contributes
to companies' business goals.
5. Build a knowledge base of current and historic data that help drive marketing mix
decisions and steer the company through rapidly changing market conditions
Why is there an increasing demand for marketing metrics?
,Increasing amounts of money and management attention are being spent on marketing
metrics.
Marketers are demanding metrics for management purposes, and for reporting
performance to company boards, shareholders and outside groups.
What are the limitations of market research and market metrics?
Most market research is done technically very well, but it often fails to produce useful
meaningful marketing metrics.
The wrong things can be measured, in the wrong ways, and things may be
misinterpreted.
What does a thorough metrics system include?
Thorough metrics system includes:
1. financial metrics,
2. buying behaviour metrics,
3. memory metrics,
4. customer profile metrics
5. marketing activity metrics
Define customer satisfaction
The measurement of how many consumers are satisfied with the company's product/
service, thought to capture how well an organisation meets
or exceeds customer expectation.
Define brand image
The perception of the brand in the minds of consumers
What would marketing look like without marketing metrics?
Without these marketing metrics, marketers are 'flying blind', spending shareholders'
money without a proper understanding of what needs to be spent and where—and with
little ability to evaluate the effect of their expenditure.
What are characteristics of a good marketing metrics
- Measurable
- Needs to change regularly (esp. in resopnse to marketing efforts - there is no point in
tracking and regularly reporting metrics that do not change, or do so very slowly).
- Need to know what it means: there is little point in tracking and reporting metrics when
you do not know what they mean, how they relate to other metrics and marketing
, actions or what level they should be (otherwise it is meaningless/worthless - you need a
background to make use of the data >> Marketing research managers need such
knowledge to avoid wasting money on pointless market research).
- Marketers need to be aware
of benchmarks and expected patterns (in other words: is the score high, low or as it
should be?).
- Interpreted correctly and lead to implications (actions) to continue or rectify the
marketing effort
- Results should be unknown: there is little point in tracking and regularly reporting
metrics that are already perfectly predictable from other metrics. >> Many marketing
metrics are predictable from market share or from how many customers the brand has
(market penetration). The scores on these metrics are always higher for larger market
share brands
Define market penetration
the extent to which a product is recognised and bought by customers in a particular
market // how many customers buy your brand
Define random sampling error
The error in survey results because a random sample can only ever be approximately
representative of a larger population
Dissucs random sampling errors in relation to marketing metrics
Many marketing metrics such as customer satisfaction and brand image are measured
and
reported far too regularly.
Fortunately for market researchers, random sampling variation makes the figures
wobble around a bit from survey to survey, providing the illusion of change. Much
management time is then wasted coming up with erroneous explanations for
movements that are simply random sampling variation. It keeps a lot of market
researchers in business.
EXAMPLE:
Apart from a small dip around 1998 for all banks, performance seems to be around 7 to
8 out of 10. Much of that variability is likely to be accounted for by random sampling
variation. Note that exactly the same data presented using a truncated scale (the graph
on the right) creates the illusion of dramatic changes, changes that would require
marketers to provide an explanation.
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