Your firm has just spent all of the marketing budget for the period and the board asks how effective the campaign was? How do you answer in a language they understand? Do you go into detail about the 5 C’s, do you describe the STP process and how that was applied to your product, do you run on about the 4 C’s and the choices the team made?
Chances are that would not be a meaningful exchange, nor would you have gained any ground in securing your budget for the next period. Your managers need tangible information. Li Ling-yee 2011 wrote ‘From a managerial perspective, top management increasingly calls for “marketing accountability” pressuring marketers to produce metrics that document marketing’s ROI.’ Marketing an its effects and results cannot be easily explained to those who have not been exposed to the theory, the process and the choices made along the way. Marketers are being held to account for their marketing activities.
Marketers need to be able to translate what they have achieved in monetary terms, even if those effects have not yet been realised. For the simple manager, an increase in profits are one of the only metrics they may understand. Many managers have asked marketers to come up with a single metric, referred to as a silver metric, such as Return on Investment (ROI),
image source – http://crowepr.com/breaking-down-return-pr-return-on-investment-roi/
Discounted Cash Flow (DCF),image source – https://dmoving.wordpress.com/
Return on Customer (ROC),and profit margins, to show results in a single monetary value. This is not an effective comparison as there are many facets that require analysis to demonstrate effective marketing.
The key is to develop a number of marketing metrics to demonstrate how effective any market campaign has been, showing a multitude of angles or facets to cross reference and compare with when evaluating results. Some more effective metrics that are used within business, include behavioural, memory, physical availability, marketing activity and customer profile.
Behavioural metrics capture customer behaviour which include loyalty, motivation, attitudes and emotion. How likely is a customer to refer this product, how likely will this customer return for a repeat sale. When considering memory metrics we look at how likely the customer is to recall our brand as being front of mind when faced with an image or text. Physical availability covers locations where the consumer can access the product, how much shelf space does the product command and at which retail outlets? It is useful to report on the actual marketing activity undertaken for any particular campaign such as newspaper advertising, social media posts, discounts given etc. Finally understanding the customer profile including age, gender, physical location, when and what they buy can be valuable information to feedback to the organisation.
image source – http://market.qlik.com/cloudbridge-marketing-dashboard.html
The astute manager may ask for a dashboard to be developed (if internal software does not exist) to illustrate the results of the metrics discussed above. The translation of those metric into a pictorial form is more effective in communicating the information in the form of charts as opposed to data. R. Meenakshi (et al) wrote about data visualisation. The term dashboard relates to a set of easily understood charts that can, at a glance relay appropriate levels of user information. Dashboards have created the ability to easily show non-marketing managers what the measured metrics are showing in easily reported form.
Having successfully delivered the information in a tangible format to your management team, the marketer would have demonstrated how marketing activities were undertaken, what information has been gathered and how it can be used for future campaigns. Demonstrating a clear understanding of consumer behaviour, identifying trends and highlighting opportunities for growth would empower the senior management team to commit future funds to marketing, as its existence is not a luxury, a department to wind down in tough times, but a necessary function of a business to survive.
Philip Hunter – Student ID 800624597
Volume 40, Issue 1, January 2011, Pages 139–148
Business-to-Business Marketing in the BRIC Countries
Volume 58, 2015, Pages 371-379
Second International Symposium on Computer Vision and the Internet (VisionNet’15)
Ambler, T, Roberts, JH (2008). Assessing marketing performance: Don’t settle for a silver metric Journal of Marketing Management, 24 (7/8), 733-750.