Metrics first and foremost help you get a better understanding of brands’ activities/changes in the marketplace, (product launches, price increases, etc.), how the market is reacting to these changes and how your brands assets are holding up in comparison.
Interpreting the effectiveness of your marketing efforts through marketing metrics can identify and structure your focus for future campaigns and help get a better understanding of where and when to allocate your budget.
A Quick Guide to Marketing Metrics
Financial Metrics, smaller businesses will typically use a simple Profit calculation, however a Profit Contribution metric will help “separate out variable costs, make better decisions about whether to add or subtract a product line, set sales targets, how to price a product or service” by allocating direct costs to the product lines or services within your company.
Profit Margin is key to figuring how far you can discount a product and how much to invest in marketing it, but as it does not include advertising or sales costs, on it’s own, is not a great indicator of how profitable something is.
Customer Value and Customer Lifetime Value (CLV), is very subjective and hard to predict but in small businesses can be a very powerful tool to help determine which customers are most worth focusing marketing efforts on and which are more worth retaining.
Behavioural Metrics are based on your customers actions, what products they buy, how many, at what price, how often, from which shops, co-purchasing traits etc. For small businesses this data is easiest collected by customer surveys.
Sales metrics track the more obvious customer behaviours like pricing preferences, units sold, revenue and number and frequency of purchase.
Monitoring your Brand’s Market Share and Market Penetration will give you an idea of your company’s ranking within your market, in comparison to your competitors, and also an insight into your marketing performance.
Loyal customers are a great way to discover new segments or focus on already established ones and generate feedback and engagement. Monitored through Purchase Frequency and Share of category requirements (SCR) metrics, and are a valuable tool in retention planning and rewards programmes. See other loyalty metrics here.
Continue improving, refreshing your offer and reinventing by listening to your customers through monitoring Defection Rates, Customer Complaints and recommendations, tracking these over a period of time will give clear areas you can improve/change.
Memory Metrics “describe what consumers think and feel about a product or brand” (Byron, S) this data is collected primarily through surveys and is essential to effectively segmenting your market. Major metrics in this category to note include Brand awareness, Brand image associations, Mental availability and Attitude.
Customer profile metrics are essential for segmenting customers into effective groups, ensuring that your messaging is relevant and understanding your customers common traits and behaviours to improve their experience with your brand in hope it will lead to loyalty and greater ROI.
Marketing Activity Metrics allow your company to see which marketing strategies were underway if experiencing an unexpected rise or fall in sales or defects, and may help answer the question ‘what works and what doesn’t work’. A key point here is to ensure you also track your competitors activity as this too will have an impact on your sales.
Which Marketing Metrics will work best for your company?
Byron Sharp. Meaningful Marketing Metrics, Chapter 3.