Thursday, June 12, 2008

Marketing Metrics: 50+ Metrics Every Executive Should Master

If you rely on books, white papers, and journals to stay current in the theory and practice of value chain improvement you probably see a lot of the material that is disappointing. I thought I would pass along some of the resources that I have found helpful and tell you why. I have begun inviting others to provide a review of materials they find helpful.

Recently, I stumbled across Marketing Metrics: 50+ Metrics Every Executive Should Master by Farris, Bendle, Pfeifer, and Reibstein and published by Wharton School Publishing. Published in 2006, I found it only recently. It is one of those books that you know will prove to be a reference that you return to over and over again.

While the book was written for marketers, it is equally valuable for strategists and planners, operations and finance executives, and IT departments. Consultants and value chain executives should be expected to have more than a passing familiarity with the contents. I would use the list of metrics as part of a checklist for anyone who was trying to sell me an executive dashboard or business analytic solution.

This isn't an introduction to marketing and is not the starting point for someone who is trying to figure out how marketing fits into a value chain approach. On the other hand, you do not have to be a career marketer to understand how the metrics will provide insight into how your business is operating. Manufacturers may better understand what drives their customers by looking at retail measurements. An inventory planner may not know what "lift" is from a marketing perspective but they certainly understand the increased demand that is driven by promotion.

To help readers that are being introduced to the concepts or the measurements for the first time, the authors provide examples. The examples are mini-business cases that attempt to illustrate how and why the measurements are used in practical applications. Don't be surprised that this book reads like a reference / text book. It is readable and understandable.

Within the first chapter, the authors provide a Major Metrics List which details the measurements that they discuss and the section of the book that will discuss that metric. The book includes Chapters for:

  • Shares of Hears, Minds, and Markets
  • Margins and Profits
  • Product and Portfolio Management
  • Customer Profitability
  • Sales Force and Channel Management
  • Pricing Strategy
  • Promotion
  • Advertising, Media and Web Metrics
  • Marketing and Finance

In each Chapter, there are sections that detail the definition of the metric, the purpose of the metric, how the metric is constructed, what the sources are for the data to compile the metric, and what other metrics or concepts might be related.

I have spent a considerable number of years looking at supply chain and financial metrics, I have spent less time looking at those performance measures that provide insight into how effectively a company market or spends its marketing dollars. I have seen many of these metrics before. I haven't seen all of these metrics in one place with the concise treatment they are provided here. (By the way, I count a lot more than 50 metrics that are described in the book).

So, if your business view of the value chain requires your understanding and measurement of demand generation activities this book probably belongs on your shelf.

1 comment:

David Gerbino said...

Scott, I am glad you found the Marketing Metrics book. It is a valued resource in my marketing business analysis arsenal.

What I like best about the book is that I have been able to use it when teaching my team about marketing analytics.

Keep on spreading the word.

- Dave