Metrics and Marketing

Introduction
Metrics offer a perspective from an executive level of how a business is performing by gathering these measurements. This is similar to judging a baseball player’s performance by batting average, home runs, and runs batted in (RBI’s). Like business measures, these statistics are metrics which illustrate a player’s effectiveness.  This is facilitated by determining the distinction between two different types of metrics: performance metrics and functional metrics.

Performance Metrics and Functional Metrics
This differentiation revolves around distinguishing between performance metrics and functional metrics. Performance metrics is how a company is doing according to key areas or indicators. They flag key indicators such as ROI, market share, inventory turns, production costs, sales, cash flow, etc. These types of metrics tend to be higher level, “big picture” measurements. Functional metrics is what a company is doing according to its certain staff and operational processes. These types of metrics can be applied to line areas, tactical production functions, and strategic staff areas. They are a key set which identify indicators of what your resources are doing and how they are being utilized. A major ideal of this article is that performance metrics and functional metrics are inherently linked.

Metrics and Marketing
The utilization of metrics in the area of marketing is especially vital to the overall health of gross sales, revenue generation, and market share. The performance metrics for this area tends to focus on the “big picture”, macro-level categories that dictate items such as sales revenue performance and product positioning issues. Key performance metrics are equally as important to smaller companies as they are to larger companies. These key measures and issues must be addressed at the executive level and by marketing managers. Key sales & marketing performance metrics include targeting segments, product positioning, advertising budget, advertising mix, channel selection, competitive products market share, and product(s) market share.

The functional metrics for sales & marketing are lower level tasks and indicators which are also applicable for small and large businesses. These metrics are addressed by the sales force and marketing staffers. These functional metrics include advertising response rates, tracking the sales & marketing budget, sales forecasting, customer segment penetration rates, pricing elasticity, conducting customer surveys, gathering sales force feedback intelligence, and database management. The intelligence, data gathering, and analyzation on the functional level drives the decision-making of the higher level performance metrics. The macro-level criteria are inherently linked to the functional task of the sales force and marketing staffers.

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Mike Bolden marketing expert and blue ocean strategist – writing to inform, enlighten, and inspire.  Author of forth coming book, “Owning Marketspace”.  Available for consulting and speaking engagements.






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