What is the need to evaluate the performance of marketing?
Being a fortune company, one would definitely like to keep an eye on the performance of marketing activities implemented towards achieving business goals. The evaluation of marketing is based on the qualitative and quantitative metrics which will further provide insights into the marketing strategy used by an organization. The data collected by a company can help determine whether the company has been successful in achieving its marketing objectives or not. If it did, then the same can be followed to garner success in the future. If not, modifications can be made to the marketing mix (product, price, place and promotion) in order to improve performance.
Introduction to marketing metrics
Be it Nike, McDonald’s, Toyota or any other bigwig, each one of them is keen to employ different methodologies in order to measure the results of their marketing activities. Every company follows a set of metrics to identify whether the goods and services provided by them meet the needs of their customers and stakeholders or not. The measures used to identify these needs are known as marketing metrics. Marketers use these metrics to calculate the profit earnings comparing it with the expenditure done by the companies on its marketing activities. Marketing metrics can be of many types namely; Financial, behavioral, memory, physical availability, customer profile. The marketing activity metrics are some common metrics used by the companies all over the world. Return on investment (ROI) which comes under the financial metrics is one of the most difficult tools to interpret and forecast as a small campaign with a high ROI can be worth far less in ‘$’ than a large campaign with a low ROI.
For example, “Market share” metric which comes under behavioral metrics can be used to check the market share of Coles as well as Wool worths and help them find out the proportion used by them in the current market. Recently, it was found in their marketing evaluation that both the brands are losing market share as they are facing tough competition with their European rival ALDI. Around 37% of shoppers visit at least one Coles, one Woolworths and one other supermarket over the same 4-week period. Only 20% of the shoppers are loyal to one brand according to Roy Morgan Research CEO Michele Levine.
“Flybys” and other loyalty programs are rewarding and we know it, but the real fact is that it is more rewarding for the company as opposed to the customer since flybys helps the company collect data of its customers including their personal details, buying habits i.e whether a customer prefers taking, visiting hours, pet shopping, shopping for a newborn, buying vegetarian or non-vegetarian food, preference over other products and other useful information which helps the company to make changes to their marketing mix and plan investments next year’s marketing evaluation. The best loyalty programs are the ones which generate insights about their customers and utilize those insights to improve their marketing programs.
(Tedx talks, 2013)
Timely monitoring of different metrics by a firm can give competitive advantages over its rivals and create more value for the brand and its shareholders. Marketing dashboards can also be useful in determining how well the company is doing in terms of customer and stakeholder based measures. Overall, it can be said that evaluation of marketing tactics by a firm can provide insights to help an organization perform well.
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Tedx talks, (2013). Customer loyalty programmes… why bother! : Lance Walker at TEDxTeAro. [image] Available at: https://www.youtube.com/watch?v=5EkiOwoLz-4 [Accessed 23 May 2016].
Motley Fool Australia. (2016). ALDI is stealing market share from Woolworths Limited. [online] Available at: http://www.fool.com.au/2016/04/15/aldi-is-stealing-market-share-from-woolworths-limited/ [Accessed 23 May 2016].
Heraldsun.com.au. (2016). Aldi’s mighty challenge to big two. [online] Available at: http://www.heraldsun.com.au/business/aldi-to-seize-more-market-share-from-coles-and-woolworths/news-story/ac33ebe273f607e214a0d034701fcae0 [Accessed 23 May 2016].
NewsMediaWorks. (2016). Woolworths & Coles lead the way in retail advertising. [online] Available at: http://www.newsmediaworks.com.au/woolworths-coles-lead-the-way-in-retail-advertising/ [Accessed 23 May 2016].
Marketing Evaluation. (2016). [image] Available at: http://catchfiremarketing.com/consulting-services/marketing-evaluation/ [Accessed 23 May 2016].