Uploaded byDaniel James Scott
Marketing Metrics
This document discusses key marketing metrics and how to measure success. It recommends focusing on metrics that measure customer response and cash flow, rather than generic reach metrics. The three most important categories of metrics are identified as: 1) response rates, 2) profitability measures like gross and net profit margins, and 3) liquidity measures like days cash on hand. Price increases are highlighted as one of the most impactful metrics within a business's control. The document emphasizes measuring the right metrics to support business strategy and drive desired financial results.
More Related Content
Marketing Metrics
- 1.
- 2.
- 3.
- 4. $$$ INCREASEDCASH FLOW! $$$(preferably with less effort)
- 5. What is aMetric?
- 6. Measurements : Metrics::Tactics : Marketing
- 7. What is aMetric?What you measure, not the measureSet against benchmarks, not a benchmarkHistorical, not a forecast
- 8. Metric CriteriaMetrics drivebusiness results. Metrics reflect business results. Metrics are something you can influence. Metrics are measured accurately. Metrics are measured consistently. Metrics are measured cost effectively. Key stakeholders agree that key metrics meet these criteria.
- 9. How do Iuse metrics?Always support strategyDefine what to measure (create framework)Compare against past performanceCompare against benchmarksCompare against future goals
- 10. The Keys toMetricsOnly a fewCost effective to measureStart at first controlled stepEnd at cash flowShould TELL you something meaningful
- 11.
- 12.
- 13. This metric isnot enough.
- 14.
- 15.
- 16. This metric isnot enough either.
- 17.
- 18. No one metriccan do it all.
- 19.
- 20.
- 21. If we absolutelyhad to pick one, what would be the most important marketing metric for determining value (results)?
- 22.
- 23. Raising prices solvesother issues.
- 24. Raising prices isin your control.
- 25. Need a reasonto raise prices?
- 26.
- 27. #1. PPI+3.9% every year10-year average annual growth
- 28. CPI only +2.8%10-yearaverage annual growth
- 29. #2. Compensation+3.4% every year10-year average annual growth
- 30. Employer contributions tohealth premiums +8.8% (single) to +9.2% (family)
- 31. #3. Only3% separates the average US profitable and unprofitable transaction.
- 32. An ExampleRestaurateur generates$1M with a 67% GPMIncreases of 4% COGS & 2% overhead – with no change in priceSales need to increase by $33,400 (or 3.3%) just to compensateThis firm will always have to grow to keep up.
- 33. Raising prices isin your control.
- 34.
- 35. Focus on servingyour best 5% ...rather than 5% of everyone.
- 36. Provide that 5%killer customer service.
- 37.
- 38.
- 39. Better (financial) results,less effort.
- 40. Others?Profitability: Gross, NetProfit MarginLiquidity: Days, Cash Working CapitalMarketing: Expense per Year, Sale, CustomerManagement: Sales, Net Profit per Employee
- 41.
- 42. Let’s back upfor a second and talk about “reach.”
- 43.
- 44.
- 45. So, what shouldwe measure?
- 46.
- 47.
- 48. Response requires agoal.
- 49. “Reach” cannot closeprofitable sales.
- 50.
- 51. Big Biz: Our radio ad reached an audience of 500,000.
- 52. Small Biz: Of the 500,000 reached, 50 responded.
- 53. How does anyof this help?Broadcast TV: $10.25 per thousandSyndication TV: $8.77 per thousandMagazines: $6.98 per thousandCable TV: $5.99 per thousandNewspapers: $5.50 per thousandRadio: $4.54 per thousandOutdoor: $2.26 per thousand
- 54.
- 55.
- 56. Response Metrics areEndless
- 57. Focus First, thenSplit
- 58. Response RatesTelephone2.92% prospectresponse, 4.41% existing responseCatalog1.85% prospect response, 3.95% existing responseDirect Mail1.65% prospect response, 3.65% existing response
- 59. How to FixProblemsAcknowledge you will screw upTie earnings to employees, not last yearThink today like you fired your marketing firm yesterdayStop trying to be like everyone elseDo less, create more MEASUREABLE impact
- 60. To RecapFocus oncash flowWe’re only doing this for one reasonThere is no one metricPrice is closeMeasure customer response, then impact on cash flowReach is only a number, not a result
- 61. If I wantedto read just one marketing metrics book, it should be…
- 63.
Editor's Notes
- #3 Valuable = Willing and Able to pay for
- #6 Ability to define a desired resultAbility to influence that resultAbility to measure your influence
- #7 Metrics are a framework to help us understand the world
- #9 Source: MarketingProfs.com
- #10 Metric = a standard of measurement, not the measure itself!
- #11 Causation, not correlation. (i.e. I believe all tall people I’ve met are smarter than short people. Everyone 5’6” raise your hands. Look around. What you will see is the “tall” population… and that I’m an idiot.)Avoid decision paralysisA wink is not one of the four bases, have to bat first.We’ll never know if that action was good or bad without cash exchanging hands.Paying $3000 to know that “brand recognition” is up 3 points is a waste of money. Ditto for number of media mentions.
- #14 I can make more sales in a number of ways, most tend to hurt profitability.
- #17 I can put more cash in my pocket by increasing profitable sales. Or selling assets. Or licensing IP. Or refinancing debt. Or raising new equity capital. Or working more than one job.
- #20 Result = Value
- #22 One metric that covers all areas.
- #23 The price measure tells us two things:Costs of goods sold management.Value to the market.
- #24 Increases revenue, allows you to extend credit, increases margins, increases perceived value, allows a few screw-ups here and there, etc.
- #25 Reducing costs may not be.
- #26 How about three?
- #28 Consultants – office supplies, printing, utilities, gas, food, etc.
- #32 Average firm resets prices only every 36 months.
- #33 3-4 tickets/day
- #34 Sales increases may not be.Candy, on average, has increased $0.01/year since the 70’s.What money savings is had from a consultant with “less overhead” than the “big guys”?
- #38 Raising prices will naturally trim unprofitable customers.
- #40 Not talking about pricing out of the market, or not gaining a scalable advantage, just value to the market.Example: Sell to Wal-Mart, every year your price is moved down – and you take it. You deserve to go out of business.
- #42 Result = Value
- #43 There is a problem with “reach” – we do not control it!
- #45 Assumed correlation, not causation. (pageviews don’t magically, or even formulaically, equal sales) This would be like measuring how many times we appeared in search results and extrapolating some meaning from that #.
- #47 Result = Value
- #48 Who? What? When? Where? Why? How?
- #49 Who? What? When? Where? Why? How?
- #50 What is “share of voice”? Too many variables…
- #52 Good for Coca-Cola, no control for us
- #53 Good for Small Business, we can do something starting with response
- #54 Source: eMarketerWhat did we talk about when addressing raising prices?
- #59 E-mail: $244.69 per thousand prospects, $183.66 per thousand existing (MarketingProfs)35.7% of online budget (MarketingProfs)8.56%(DMA)/22.4% (Bronto) prospect open rate, 14.92% existing open rate (DMA)5.57% (DMA)/4.4% (Bronto) prospect clickthrough rate, 9.36% existing clickthrough rate (DMA)3.15% prospect conversion rate (DMA), 5.26% existing conversion rate (DMA)Telephone2.92% prospect response, 4.41% existing responseCatalog1.85% prospect response, 3.95% existing responseDirect Mail1.65% prospect response, 3.65% existing responseSEO & Paid Search33% of online budget (DMA)Cost per click averages $1.56-$1.98 (DMA)