Analysing Marketing Metrics Essay Example

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Title: Define marketing metrics, indicate which metrics are most widely used (academic and professional papers), and suggest why marketing management do and do not use such metrics.


Measuring the performance of the business is central to marketing. To accomplish this, there have been several marketing metrics that have been developed as marketing measuring and evaluation tools (Ambler, 2003).The increased use of marketing metrics is due to expectation that the prosperity of the business is possible if there is a clear direction and a business model. This is through measuring the product performance in the market. Using the market metrics, it’s possible to understand the business performance. The need for marketing metrics arose due to the pressure that was exerted to the marketing team in a bid to justify their expenditure (Ambler & Riley, 2000). This led to a lot of metrics being introduced for the purpose of measuring the effectiveness of the marketing campaign. The metrics have also been used to measure the proxies of firm value (Clark, 2000). This essay will look at the marketing metrics and indicate the one which are widely used. It will then suggest why some of the metrics are used while others are not. In conclusion, there will be reflection on the assignment.

Metrics can be divided into seven distinct categories. The segments are: brand value metrics; customer value metrics; word of mouth and referral metrics; retention and acquisition metrics; cross buying and buying up metrics; multi channel shopping metrics and product return metrics. These metrics serves two main purposes. One of the purposes is helping in strategic and tactical campaigns. The marketing manager can utilize the customer value score in determining the target customers. The other reason is that customer predicted value can be used to determine the customer who is to be selected during a campaign (Armstrong, Adam, Denize & Kotler, 2012). Among the seven metrics, there are five widely used metrics which are: brand value metrics; customer value metrics; word of mouth and referral metrics; retention and acquisition metrics and multi channel shopping metrics (Ambler, 2003).

Brand value metrics

This is a metric that is involved in measuring the brand value. Of all the business metrics, brand value metrics have been one of the most widely used metrics. The method assigns a monetary value to the firm brand equity (Brand Finance, 2000). There has been a positive link between the brand equity and the increase in the number of customers and firm value. Measuring the brand value has an advantage due to fact that it helps in linking the business performance to the brand management. This helps the firm in gauging how to continually improve. It also helps the firm to know the performance of brand in relation to the consumer values and competing brands. The main indicators are brand awareness, association, loyalty and appraisal (Armstrong, Adam, Denize & Kotler, 2012). The marketers have utilized brand metrics due to its effectiveness in measuring the performance of the brand building activities in relation to the brand investment (O’Sullivan & Abela, 2007). The marketers can relate on how the brand building activities have helped in achieving the overall business results.

Customer value metrics

The consumer value metrics is used in measuring the value of the customer. This is done at the individual customers’ level or at the aggregate level. For the individual level, the customer live time value is measured (CLV). When measuring the customers at the aggregate level, the customer equity is assessed (Doyle, 2000). The main use of the attained results is determining how to select a customer in the marketing campaigns and to measure the effectiveness of the marketing campaign. Through determining the customer value, marketers can be able to project the returns after the marketing campaigns. There has been a proof that if the firm is capable to determine the customer growth and margin, it is possible to determine the firm value and the customer equity. The customer value has also been closely linked to the shareholders value. This is through results that if the customer value increases, there are higher chances that the shareholders value will increase.

Using the marketing metrics has a lot of advantages to the firm. The marketers are able to come up with a consumer focused strategy. This is through getting the customers on the same place in the firm through alignment. The data also helps in coming up with a target market strategy. The customers driven approach that is offered by this metric helps the firm to shift the focus from the product and brand only (Hyde & Landry, 2004).

Word of mouth and referral metrics

The growth of business has been associated with having a positive word of mouth. Using the Net Promoter Score, it is possible to determine the connection between the word of mouth and the business value. The word of mouth that the customer spreads about a business determines how it performs in sales. The customers who have been acquired through a positive word of mouth tend to be very profitable for the firm. This is in comparison to the customers who have been acquired through other methods such as advertising and promotions. This makes it prudent to determine the customers who have been acquired through the word of mouth and retain them (Chevalier, Judith & Dina, 2006).

For marketers, the word of mouth and referral value is an important marketing metrics. This is due to the high value that is associated with the word of mouth and referrals. It is also important for the marketers to identify the customers who are spreading the word of mouth (Katherine &Valarie, 2004). The customers who are acquired through the word of mouth have a long lifetime value

Retention and acquisition metrics

Successful marketing can be gauged through having successful retention and acquisition of the customers. Customer acquisition and retention are linked hence cannot be measured separately. The firm has to make sure that acquisition and retention are both maintained. The marketers use the results from the metric to link with the firm financial outcomes. The metrics also helps the marketers to come up with marketing strategies that can help in boosting the consumer lifetime value (CLV). Customer acquisition metrics includes the awareness level, rate of acquisition, return on investment and market share (Jacquelyn, Thomas & Kumar, 2005). The marketers aim at making the loyal customers the advocates of their products which leads to a reduction in customer acquisition costs and increase in the value of the customers (Farris, Neil, Phillip & David, 2006).

The marketers use this metrics due to fact that acquiring and retaining the customer is one of the most effective ways of making profits in a firm.

Multichannel shopping

The rise of internet has enabled the firms to have presence in multiple channels. The impact of each channel on the consumer behavior is measured using the multichannel metrics. The consumers who do their purchases using multiple channels have been established to be more profitable than those who do their purchases on a single channel. These are consumers who can be able to stay active for a long time (Rajkumar, 2005). The metrics looks at how to effectively manage migration of the customers from one channel to another and measure the impact on the channels which have no purchases (Paul, Neil, Phillip & David, 2007).

For marketers, this is a very important metrics due to fact that technology has enabled a multichannel business operation. Using the metrics, it is possible to determine which the most effective channel for a firm and also attract the customers to any channel which can bring maximum profit to the firm (Roger, 2008).

Barriers to using the metrics

Marketers who do not use matrices complain of them being too complex or difficult to use. There are also claims of inadequacy of the data to fully implement a metric. Despite this, the ability of the firm to measure the performance of marketing has a great impact on the overall firm performance (Ambler, 2003).

Individual reflection

From the research I have done on the assignment, I have learned a lot on the use, importance and types of marketing metrics. The mostly used metrics are based on customer, market profitability and competitiveness of the firm. These metrics are seen as basic to most firms as they address the most vital areas of the firm. One of the facts that I have learned is that there is no absolute measure of the marketing success. This leads to the need for the company to utilize different marketing metrics in determining marketing performance. Metrics are able to help the business to come up with a profitable customer’s base and built the brand value and equity. This can only be achieved through use of superior marketing metrics. I have been able to establish that despite the associated benefits that matrices have, not all managers have been able to use them. There are several barriers that have led to some of the metrics not being adopted. The business should overcome the barriers by understanding the basic market metrics. After implementing the basic elements, the company should only add the metrics which they feel will add value to their firm. From the assignment, I have gained knowledge that understanding the performance of the firm marketing has a great impact on performance. This is due to fact that the firm can improve or remove marketing tactics that have no return value. I have gained knowledge that what matters is not the number of metrics used but the effectiveness obtained.


Metrics are an important tool in accessing the performance of the marketing efforts in an organization. They are also a source of data on business performance and gives insight on where to improve in a firm. The most widely used metrics are concerned with consumers, market and the profitability analysis of the firm. Since their inception, they have helped firms in justifying their expenditure in marketing and determining the course of action to take. Despite their importance, not all business uses them. Those who do not use them claim they are complex, insufficient data and difficulty in application. There is need for firms to adopt their use by staring with basic metrics and then incorporating only those which can add value to their firms. From the research, it’s important to note that metrics have to be used in combination to achieve the best results on firm performance.


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