Preparing for class recently I came across a media report which illustrates the confusion and sloppiness that surrounds marketing metrics. I realized the problem we often have talking about the top and bottom line. Impact Of Social Media An important question is the bottom line impact of social media. How can you persuade the CFO…
Category: Marketing Metrics
Accounting For Profits And Decisions
Marketers, and business people more broadly, often use accounting profit to measure success. This isn’t too surprising. Often firms claim to be profit maximizing. Report something as profit and this sounds like something that should be maximized. That said, profits using in accounting and managerial decision-making are not really the same thing. Decisions taken to…
Market-Based Assets: An Important Idea
The concept of Market-Based Assets was introduced to tackle a major marketing (indeed business) problem. Many managers too often see marketing simply as an expense. By this logic marketing does not deliver, or at least is not expected to deliver, any long terms benefits. Being treated as an expense makes marketing a prime candidate to…
Spock And Kirk And Marketing
Rutherford and Knowles (2008) highlight the tensions between finance and marketing. Their book goes by the title of “Vulcans, Earthlings and Marketing ROI”. The central thesis being that finance people are steady and logical, Vulcan in Star Trek, while marketers exciting and emotional, Earthlings. What can they tell us about Spock and Kirk and Marketing?…
A Set of Metrics
The Canadian Marketing Association (CMA) have produced a set of metrics to capture performance. I would like to improve the definitions. In addition, the set more coherently presented. (For example, why squish retention and acquisition together in the list below?) Still, it is an interesting view on what marketers think. CMA Task Force The process…
Managers and Academics
I think one the great rifts between managers and academics in marketing has been caused by NPS. To be fair there is blame on all sides. Asking Questions As researchers and teachers we have a responsibility to advance the practice of marketing. This isn’t just about teaching technical skills. Knowing how to discount a cash…
Who Owns The Numbers?
Numbers are vital to running any organization but who owns the numbers? Measurement And Judgment Pfeffer and Sutton’s (2000) book chapter starts a bit too negatively for my liking. The title sets the wrong tone. “When Measurement Obstructs Good Judgement”. To be fair their point isn’t that measurement is bad. They really mean that bad…
Good And Bad Profits
Fred Reichheld is best known for his (over) exuberant advocacy of the Net Promoter Score. Introducing Net Promoter he suggests a difference between good and bad profits; an interesting, though theoretically imprecise, idea. Are All Dollars In The Same? Short of outright fraud, isn’t one dollar of earnings as good as another? Certainly, accountants can’t…
Marketing State Of Mind
Marketers often brag about understanding external customers. They often do this while ignoring internal customers. To be a great marketer understanding the end consumer isn’t enough. Having a “marketing state of mind” means trying to solve the problems of your internal customers. Why is that? Internal Customers Of Marketers Imagine a simplified firm: the accountants…
Understanding Numbers
Understanding numbers is vital to so many parts of life. It is a shame many otherwise sensible people don’t seem to take numbers seriously. Numbers Allow You To Understand Magnitude When I managed the finances of a political party the BBC’s political editor explained on TV that donations totaling 6 million pounds would run my…
