Submitted by: Submitted by moralhazard
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Category: Business and Industry
Date Submitted: 11/20/2011 03:42 AM
GETTING STARTED USING MARKETING METRICS
White Paper by Dr. Roger J. Best
The cockpit of the 757 Boeing jet is a maze of instruments (analytic tools) that produce flight performance data (metrics) that are critical to the safe and efficient flight of a 757. It would be impossible to fly a 757 without theses analytic instruments and performance metrics. Yet, companies invest millions or billions in marketing and sales strategies with no clear measure of their performance impact or efficiency.
Most companies recognize the need for marketing metrics and the potential benefit they provide, but they struggle where to get started. A 2010 survey of 400 companies found that 75 percent recognized the need for marketing metrics, but only 25 percent had implemented a marketing metrics program (1). We will address the barriers companies and managers must overcome in order to successfully apply marketing metrics across their organizations. Before we address these barriers to getting started, let’s first understand the need for marketing metrics and how they can be used to measure and manage marketing performance.
THE NEED AND IMPORTANCE OF MARKETING METRICS
Marketing has a responsibility to account for investments in marketing and sales strategies. We have found approximately 75 percent of a company’s Sales, General & Administration (SGA) expense is invested in marketing and sales. For many companies this can be 15 to 25 percent of sales. Yet, marketing generally lacks the performance metrics to demonstrate the results produced. A survey of CEOs conducted by Booz‐Allen Consulting (2) showed that CEO’s top concern about marketing was their lack of performance metrics, as shown in Figure 1. Marketing needs marketing metrics to demonstrate its performance as well as take a more responsible role in managing profits and profitable growth. Marketing analytics are the tools needed to measure marketing performance and marketing ...