Thanks to Mark Jeffery of the Kellog School of Management, Agile Insights and the author of Data-Driven Marketing: The 15 Metrics Everyone in Marketing Should Know.
Mark surveyed 250 Fortune 1000 firms with combined marketing budgets of $53 billion to help determine the best practices for driving performance with marketing.
His findings were that high performing companies spent 20% more than average and low performers spent 4.4% less than average.
He also noted that where they invested their marketing dollars varied between high performers and low performers as follows:
- Demand generation = 48% for high, 58% for low
- Branding = 13% versus 7.5%
- Infrastructure and capabilities = 16% versus 10%
- Customer equity = 14% versus 11%
- Shaping markets = 9% versus 14%
- Firms that optimize marketing campaign management have better sales growth, brand equity, ROI and long-term shareholder value compared to competitors.
- Leaders capture/measure the value and user feedback to learn and refine their campaigns in real time.
Here are Mark’s 10 “essential classical marketing metrics:”
- Brand awareness
- Test drive
- Customer satisfaction
- Take rate
- Net present value
- Internal rate of return
- Customer lifetime value
Mark considers 1 – 4 to be “essential non-financial metrics,” 5 to be an “essential operations metric,” 6 – 9 to be “essential financial metrics” and 10 to be the “essential value-based marketing metric.”
His five “new age marketing metrics” are:
- Cost per click
- Transaction conversion rate
- Return on ad dollars spent
- Bounce rate (% of customers that leave your site in five second or less)
- Word of mouth
He considers 1-3 to be “essential search engine metrics,” 4 to be the “essential web site performance metric” and 5 to be the “essential social media metric” that you measure with a sentiment and sharing index.
How many of these marketing metrics are you using to measure, and improve, the effectiveness of your marketing efforts?