The Canadian Marketing Association (CMA) have produced a set of key performance metrics. The definitions could be improved and the set more coherently presented (see retention and acquisition below) but it is an interesting view on what marketers think.
The process was: “What began with a CMA Task Force that included input from the Canadian Management Accountants of Ontario, a host of metrics were identified. These were then consolidated and vetted by CMA’s Customer Insights and Analytics Council in terms of the importance of the metric, consensus of its definition, and its acceptance within the marketing community.” (CMA 2013, my emphasis).
The CMA process, like news polls on whether a suspect is gulity, isn’t scientific but tells us roughly what the respondents think. That said I’d advise the CMA to take a more active leadership role. They should promote best practice and not just report what marketers currently do.
The problem is what marketers currently value is a little worrying. The set of performance metrics that emerged don’t hang together well.
- Acquisition / Retention
- COA: Cost of Acquisition
- Customer Satisfaction
- Employee Satisfaction
- LTR: Likelihood to Recommend/Repurchase
- Retention Rate
- ROMI: Return on Marketing Investment
To see why this set of metrics won’t do the job lets just say I’d love to be in charge of marketing in a company using these to reward my performance. My first action would be to slash prices. There is a reasonable chance that this would a) boost acquisition/retention, b) make acquisition easier (lowering cost per acquisition), c) improve the satisfaction of customers who are being asked to pay less, d) boost recommendations/repurchase of this heavily discounted product, and e) boost the retention rate. This would not directly impact employee satisfaction but happy customers would probably improve the employee’s experience at work increasing employee satisfaction. ROMI (using their definition) could then be gamed by only picking a small number of short term, high revenue projects, i.e. underinvesting the future. Maybe you will destroy your company but the performance metrics will look good while you go down.
My advice: When you create a set of metrics consider how they hang together.
Read: Marketing Metrics: Key Concepts Defined by the CMA (2013), http://www.the-cma.org/about/blog/marketing-metrics-key-concepts-defined, Jun 27 2013 9:00 AM