From 2016: With Charan Bagga I have just published an article in the Sloan Management Review (see the article here). We called the article — rather self-explanatorily — Metrics that Marketers Muddle.
Annoying Things That Marketers Do
This central message is a bit cranky. Indeed we could have titled the paper, “annoying things that marketers do”. We highlight:
“…five of the best-known marketing metrics: market share, net promoter score, the value of a “like,” customer lifetime value, and ROI”Bendle and Bagga, 2016, page 73
We criticize how these metrics are sometimes used. (We, perhaps a bit loosely, classify CLV as a metric). Our surveys show widespread confusion about metrics amongst marketers.
Market Share: One Of The Metrics That Marketers Muddle
Next up is market share. We return to a point that seems obvious, but isn’t widely appreciated. Namely, that market share may be useful but it isn’t an end in itself. Don’t think that simply improving market share is the key to success. There are plenty of ways to mess up your firm while boosting your market share.
NPS And Value Of A Like
We talk about the Net Promoter Score/System (NPS). Our key point is that NPS isn’t magic. Some of the claims made about NPS are simply too strong. I quite like that we compared NPS to Guinness, which was sold as being “good for you”. NPS, like Guinness, may work well for you but don’t believe all the claims made about it.
We discuss value of a like on social media to dismiss the idea that the difference between a Facebook fan and non-fan should be used as a guide for social media spending as doing so ignores the problem of causation. Customer Lifetime Value, the next metric we discuss, seems to be widely misunderstood. Finally, We pointed out that ROI is often used as just a shorthand for “good result”. Such usage is a problem as ROI does have a specific definition.
Marketers Need To Improve Their Metric Use
Marketers, we believe, need to improve their use of metrics to be taken more seriously in business. If marketers don’t understand their own metrics it is going to be hard to convince colleagues that marketers and their metrics matters.
For more on popular marketing metrics see here.
Read: Neil T. Bendle and Charan K. Bagga (2016) The Metrics That Marketers Muddle, Spring, Sloan Management Review, Pages 73-82