sixth edition

market-based management

"Without application, the benefits of knowledge cannot be fully achieved." - Roger J. Best

Need for marketing metrics

Marketing lacks performance metrics

Most companies recognize the need for marketing metrics and the potential benefit they provide, but they struggle 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.

A survey of CEOs conducted by Booz-Allen Consulting showed that CEO's top concern about marketing was their lack of performance metrics, as shown in the figure to the right. The marketing function needs marketing metrics to demonstrate its performance as well as take a more responsible role in managing profits and profitable growth.

purpose and importance

Marketing analytics are tools used to measure marketing performance, while marketing metrics are the resulting measures of performance. Metrics and analytics are a big part of our lives.

  • Health Metrics: A body temperature (analytic) of 98.6 degrees (metric) tells us the body temperature is normal.
  • Automobile Metrics: We use our speedometers (analytic) to manage our speed (metric) in order to conform to speed limits for different driving situations.
  • Marketing Metrics: Marketing ROI indicates the marketing profits produced per dollar of investment in a marketing and sales strategy.
  • analytics metrics what metrics tell us that is important
    Blood Pressure
    Normal body temperature
    Normal diastolic/systolic blood pressure
    Pulse rate is normal for my age and health
    Pressure Gauge
    63 mph
    40 psi
    Only 25 percent of gas left in the car
    8 miles per hour over the posted speed limit of 55
    Tire pressure at the recommended level.
    Market Dev. Index
    Customer Retention
    Marketing ROI
    Only 40% of the market potential has been developed
    Losing 33% of our customers each year
    $1.50 marketing profit per $1 marketing & sales exp.