"What you can measure, you can manage."
Marketing is the business. If goods or services aren’t sold, everyone else can go home.
Managing the marketing function in an organization requires gathering information about the value of customers, the effectiveness of advertising, marketing penetration, product availability and many other things. These aren’t the kinds of information that they teach in business school in accounting or finance classes.
Farris, Bendle, Pfeifer and Rebstein, who are mostly university professors, have assembled a bundle of more than fifty "metrics" that companies can use to manage their marketing.
A list of the chapters gives you an idea of the scope of the book:
- Share of hearts, minds, and markets
- Margins and profits
- Product and portfolio management
- Customer profitability
- Sales force and channel management
- Pricing strategy
- Advertising media and web metrics
- Marketing and finance
The purpose, construction, and data sources, complications and cautions are given for each "metric" or measure. A big issue is how to gather the information required to make the computations.
This book is tough sledding. It’s clear that it would take a lot of resources to assemble these measures on a regular basis. Organizations that come to mind that might be doing this analysis include General Electric and Hewlett Packard. Companies that are well-managed.
For the small business, here is a smorgasboard to identify the key metrics that drive your business. Every business should know the break-even point for its operations. Every business should know the lifetime value of a customer as a reference for promotional spending. Every business should know costs per lead, per customer and per sale.
Study Marketing Metrics to find out what is important to measure for your business and then assemble that information regularly and use it to "steer your (business) ship."
Buy it on Amazon: Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (2nd Edition).
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