Wading in a metric tonne of data

Marketing is becoming increasingly scientific, and while there is a lot of room for creativity in terms of advertising and marketing, the metrics, or numeric data, is where the action happens. Big data can be overwhelming, with so many pieces of information from various sources that can tell a company exactly the who, what, where, when and why of their customers. But is this the bottom line? If we step down through the metrics, we can see how customer retention and customer acquisition could be the keys to success in what marketing dollars gain.

large-895567_960_720-2Big data can tell an organisation minute details about the customer, right down to what they’re clicking on a website, and the analysis of that data can assist the organisation’s interactions with the current and future customers (Marr, 2016). Making sense of all of those numbers would probably take a long time, and a specific skill set, which is why the focus is shifting towards the financial metrics and away from the more intangible ones. There is a lot of data to choose from and the main metrics considered are marketing activity metrics (rise and fall of sales figures), Customer profile metrics (data on the individuals such as age, gender or data on a company such as industry and size), memory metrics (brand awareness, customer satisfaction, purchase intentions), behavioural metrics (activities of the buyer) and financial metrics (profit, return on investment, customer value) (Sharp, 2016).

“Marketers are constantly focused on improving campaign effectiveness — more data is great, but more impactful and easy-to-work-with insights are better”  –Steven Fuld, senior vice president, Sony Corporation of America (PURSWAY 2013)

Many Metrics
While all of these different metrics provide useful information, there is ongoing debate as to whether financial measures in isolation are adequate to demonstrate something as multidimensional as brand equity (Ambler and Roberts, 2008). However some companies are satisfied that the financial metrics should be the key focus. For example, a recent study conducted with Microsoft Corporation showed that their marketers are focussing more on business-focussed metrics that show the link between the customer experience and the financial outcomes (CMO Council, 2016). This is typical of the trend towards using the financial data to tell the company what it really it needs to know, which is what are they getting for their money.

big-data-1515005_960_720If we consider the key financial metrics that can be used to formulate marketing strategy are Return on Investment (ROI), Cost Per Acquisition (CPA), Return on Advertising Spending (ROAS), Customer Lifetime Value (CLV) and Customer Retention Rate (CRR) (Goulart, 2016), we can learn a lot about our marketing dollars just by focussing on one of those metrics.

Return on Investment or ROI
Return on investment is calculated  using the formula ROI = Net Profit/ Cost of Investment, and can be compared to other ROI.  Even the recommended top ten online marketing metrics recommends measuring ROI, as it demonstrates the profitability of a particular marketing campaign (DeMers, 2014).  For example, ROI can be the most useful way of comparing whether it is more beneficial for a company to spend money on acquisition or retention of customers, as both have their merits.

Research has shown that existing customers boost bottom line growth in more ways than do new customers. Concentrating your efforts on building and nurturing relationships with your existing customer base is worth the investment (Hoovers, 2016). But what if it’s more economically viable to acquire new customers? By breaking down customer acquisition to a formula that tells you the cost of converting a person into a customer you can compare the ROI of retention to acquisition. The cost of acquisition would be worked out by dividing the expenses related to acquisition by the number of new customers acquired (Optimove, 2016).  Customer retention has been considered a “missed mark” in marketing for most companies, as many companies have not fully grasped  the power of the customer retention relationship (Newnorth, 2016).

Customer retention and customer acquisition don’t have to be two parallel lines that never meet  because word of mouth is a great tool (Jao, 2013), but these kinds of marketing have a way to go. For companies to be successful in retention marketing they must commit to a new way of thinking that must be implemented from the top down. (Jao, 2015).

As you can see, metrics can go from big data to small data and help show you the bottom line.


CMO Council (2016) Marketers looking to measure customer experience based on business outcomes not campaign metrics, PR Newswire [online] http://www.prnewswire.com/news-releases/marketers-looking-to-measure-customer-experience-based-on-business-outcomes-not-campaign-metrics-300217111.html

DeMers, J (2014) 10 Online Marketing Metrics You Need To Be Measuring, Forbes [online]

Goulart, M (2016) 5 Critical Marketing Metrics to Follow, Entrepreneur [online]


Jao, J (2013)
Customer Retention Should Outweigh Customer Acquisition http://www.cmo.com/features/articles/2013/7/18/customer_retention.html#gs.null
Jao, J (2015)
 Customer Retention Is King: The Future Of Retention Marketing, Forbes [online] http://www.forbes.com/sites/jerryjao/2015/01/21/customer-retention-is-king-retention-marketing-provides-greater-roi/#1e381b9f609a

Marr, B (2016)  How Big Data Analytics can improve your marketing, Data Informed [online] http://data-informed.com/how-big-data-analytics-can-improve-your-marketing/

Newnorth (2016) Five reasons why customer retention is better than acquisition

Five Reasons Why Customer Retention is Better Than Acquisition

Optimove (2016)  http://www.optimove.com/learning-center/customer-acquisition-vs-retention-costs

Pursway (2013) ‘Marketers Monetize Customer and Prospect Real-World Relationships’




Sharp, Byron (2013). Marketing : theory, evidence, practice. Oxford University Press, South Melbourne, Vic


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