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:

  1. Essential metrics criteria

  2. Customer-acquisition metrics

  3. Product "wow" metrics

  4. Customer-retention metrics

  5. 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.

Customer-Acquisition Metrics

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

After spending over $700 million on Amazon television ads, Jeff Bezos realized that probably over half of that money was wasted. He now says, "Developing over one million affiliate sites is one of Amazon's best investments, and it is totally measurable. We have scaled back on TV and wish we had come to that conclusion earlier because television is simply not as measurable."

Product 'Wow' Metrics

A great product or service is the most important element for building an exceptional customer experience. Without a great product, customer acquisition efforts are a waste of time and money and customer retention efforts are futile. Examples of product "wow" metrics include the following:

  • Ease of learning

  • Ease of use

  • Satisfaction versus expectations

  • First-time user experience metrics

  • Usability metrics

  • Longitudinal usage metrics

There's nothing more powerful than a customer's first impression when using a new product. Making this first experience one that satisfies or even delights the customer reinforces the purchase decision and ensures the customer will continue using the product.

Another key element for continued product usage is product usability. Whether a software program, new pair of jeans or household cleaner, the product must be designed for easy and enjoyable usage. And, of course, the product absolutely must deliver on the benefits promised in marketing materials so that customers are at least satisfied and hopefully delighted in relation to their expectations.

Customer-Retention Metrics

Improving customer retention remains one of the most effective ways to drive profits to the bottom line. Marketers want customers not only to continue using products on an ongoing basis but also to buy other products and services. Current customers are also vitally important in spreading positive word-of-mouth, which attracts new customers.

By turning loyal customers into advocates, marketers can significantly reduce customer acquisition costs and significantly increase the value of current customers. Some key customer retention metrics include:

  • Retention rate

  • Abandonment rate

  • RFM (recency, frequency, monetary value)

  • LTV (lifetime value)

  • Brand equity

  • Net promoter score

The net promoter score measures the difference between customers who spread positive and negative word of mouth about your product. An accurate measure of customer loyalty, the net promoter score has recently gained momentum as a key retention metric. As Loyalty Rules book author (and Bain & Co. fellow) Frederick Reichheld states, "The net of promoters minus detractors doesn't show up in profit and loss statements, but detractors destroy your future."

Strategic Accountability

It's imperative to tie marketing metrics to marketing strategies. By measuring marketing effectiveness through quantifiable, insightful and useful benchmarks, you'll have the information you need to focus efforts and resources on what best builds the business. You'll also improve ROI, since you'll be able to spend on those strategies and programs that bring in the highest return for the money.

Marketing metrics also allow you to own accountability for your marketing efforts. What better way to prove the value of your work than to show how your marketing strategies, ideas and programs have directly built the business?

Even if your metrics are not as strong as you'd like, they can help you understand where you want to go and how you're going to get there. As revealers of true performance, metrics give marketers credibility and responsibility for the bottom line. Simply put, marketing metrics should be considered powerful and essential tools in every marketer's toolbox.

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Suzanne Taylor is a marketing strategy consultant. Contact her via or visit