Great marketers figure out how to make their customers' lives better, with the goal of attracting lots of profitable and happy customers. To measure how well marketing efforts help build a large and loyal customer base, it's essential to identify and use the metrics that matter most.
A recent poll conducted by the Silicon Valley American Marketing Association (SVAMA) among 3,500 of its members and their friends found that while 88% of respondents reported measuring their marketing activities, only 52% of them measure at least half of those activities. This finding means that marketers spend millions of dollars without accountability for results.
Why do half of Silicon Valley marketers measure half of their marketing programs?
Marketers need to take a disciplined approach to using accurate, timely and meaningful marketing metrics. To help develop more insightful and useful marketing metrics, focus on these five fundamentals:
- Essential metrics criteria
- Customer-acquisition metrics
- Product "wow" metrics
- Customer-retention metrics
- Strategic accountability
Essential Metrics Criteria Simply put, useful and meaningful metrics help marketers track how well their marketing objectives are being met. Using a set of core metrics will not only help to determine goals but also serve as the yardstick by which success and progress are measured.
It's important not to have too many metrics. Focus on those that best meet the following criteria:
- Metric drives business results.
- Metric reflects business results.
- Metric is something you can influence.
- Metric is measured accurately.
- Metric is measured consistently.
- Metric is measured cost effectively.
- Key stakeholders agree that key metrics meet these criteria.
All marketers want to acquire new customers. So what metrics should be used to measure the effectiveness of acquisition marketing efforts? Key acquisition metrics include the following:
- Awareness levels
- Purchase-decision drivers
- Rate of customer acquisition
- Market share
- ROI of marketing programs
- Cost of customer acquisition