Visionary Chronicles: Marketing Metrics
We know that Marketing Metrics do matter and are an essential contribution to defining brand ROI. They establish marketing discipline, decision making, investment analysis, assessing the effectiveness of critical activities, and validating how business outcomes are achieved.
It is how we determine, assess, and manage these metrics to build an effective marketing strategy that provides tangible brand equity benefits and a realized ROI.
The first step in building your Roadmap is determining the most critical data points to construct an analysis of brand investment value.
Metric Data Point Analysis;
- Do these metrics impact revenue (P/L) or the brand equity value/goodwill (balance sheet)?
- Do the metrics define the past (previous) or the future (lifetime value)?
- Are the metrics static (period demand generation) or dynamic (ongoing demand build)?
The Roadmap to the Value of defining marketing metrics:
- Campaign Metrics; effectiveness, ROI through click-through rates, and visits.
- Satisfaction Metrics; customer satisfaction through NPS (net promoter score), or revenue.
- Brand Metrics; brand affinity or brand equity valuation increase.
- Customer Acquisition/Attrition; process to determine customer churn rate.
- Corporate Metrics; enterprise value translation through corporate Culture, HR, or potential M & A value.
You will need to initial the analysis with metrics that track marketing investment performance, such as promos. Then, determine and measure the outcome and compare it to the expectations, such as;
- Customers Visits?
- Do the results justify the investment?
- How effective and efficient was marketing’s strategy?
- Were you able to determine ROI?
The most common marketing ROI formula’s are;
TOTAL: Marketing Return on Investment
MROI (%) = Incremental revenue attributable to marketing ($) during the period – Marketing spending ($) ÷ Marketing spending ($)= % ROI
FUNNEL: Marketing Return on Investment (LiquidMind action sports customer-example)
Campaign cost ($30,000) generates 6,000 views of video. Historical tracking projects 12 of viewers will become qualified leads within 6 weeks and 10 % will convert to revenue within 6-9 months = 72 sales. At a profit of $500/sale = $36,000 in revenue.
Funnel MROI - $36,000-$30,000/$30,000 = 20% MROI
CUSTOMER EQUITY: Marketing Return on Investment (LiquidMind banking customer-example)
Customer retention/attrition valuation; 10,000 customers, @ $2,000 annual profit/customer. Current attrition rate = 20%, invest $4M and goal is to reduce to 17%.
Before; 10,000 * $2,000/20% - $100M
After; 10,000 * $2,000/17% = $117M
Customer Equity MROI; $17.6M (increase)- $4M(marketing)/$4M (marketing) = 340% MROI
These marketing metrics need to be combined with other metrics. Still, the most important ones are revenue growth, which realizes a tangible ROI, and customer satisfaction through the Net Promoter Score.
The marketing team can measure the Value of brands equity value growth through other more intangible metrics such as;
- Brand awareness
- Brand consideration
- Brand preference
- Brand quality and point of difference
- Brand affinity • Brand positioning
- Brand culture
In looking at brand marketing metrics, a recent study of CMOs in 2021 found the following are the most important for determining ROI.
- Digital Marketing Performance
- Lead Generation
- Content Engagement
- Lead Generation
- Customer Engagement/Experience
- Campaign Costs
As you can see, marketing metrics are important, but determining tangible benefits is of the utmost importance.
At LiquidMind (LiquidMindsite.com), we work with our brands to set a cohesive marketing strategy, activation plan, ongoing investment analysis, and brand equity development and growth determination.
Stay True, stay Authentic, be Different, be Great!
Enjoy the Journey!