How you keep score matters

1. Meaningful Metrics For
Annual Marketing Plans
Thomas Emrich
Managing Director at ValMark Group
(401) 450-2841 tlemrich@valmarkgroup.net
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2. Dilemma and Challenge
Marketing Outcomes
• Market Metrics
• Customer Metrics
• Competitiveness Metrics
• Marketing Profit Metrics
Financial Outcomes
• Cost Metrics
• Productivity Metrics
• Profitability Metrics
• Financial Metrics
Businesses tend to be obsessed with
financial results because they speak to
what has happened, but rarely do
businesses thoroughly understand the
root causes of these results.
In many organizations, marketing
measurement tends to slant toward short-
term payback at the expense of longer-
term brand and customer development.
And, today, when you add heavy doses
of highly measurable online tactics to
more quantitatively-elusive offline
approaches this slant can become an
outright bias.
Unchecked, this situation can seriously
impair an organization's ability to make
smart decisions.
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3. Guidance
When it comes to developing
meaningful metrics for
marketing plans, your
approach should, in general,
incorporate three key
characteristics that can
easily be customized to
specific business need.
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4. 1. Linkage
Effort to have your plan measures work
together to define and quantify the
connections between marketing
outcomes and bottom-line profitability.
Whether your organization uses
economic value add (shown here),
free cash flow, or some form of ratio
analysis to gauge financial
performance, your plan needs to
reflect a thorough understanding of
these calculations and their inputs.
Collectively, your plan measures should
help you credibly explain how
marketing profitability contributes to
these calculations and overall financial
results.
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5. 2. Focus
Strategiesto Grow
Market Demand
Strategiesto Enter or
Exit Markets
Strategiesto Increase
Market Share
Strategiesto Grow
Customer Purchases
Strategiesto Lower
Variable Cost per
Customer
Strategiesto Increase
Marketing Efficiency
Market
Demand
Market
Share
Revenue
Per
Customer
Variable
Cost Per
Customer
Marketing
Expense[ x x
( -
([-
NetMarketing
Contribution
=
Plan measures should strive to isolate
those components of profitability that
are largely under the control of the
marketing function.
Work to correlate market or activity
based metrics (such as brand strength
or social media counts, etc.) with an
order of magnitude change in one or
more of the elements that comprise Net
Marketing Contribution (shown here).
In doing so, you’ll be ready to link
marketing outcomes to both short and
long term financial performance.
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6. 3. Simplicity
Use a simple plan-on-a-page
approach to highlight the differences
and relationships between plan
objectives and measures.
As stated earlier, keep plan objectives
centered on targeted components of
Net Marketing Contribution, and use
correlated market/activity based
measures as leading indicators of how
your strategies and tactics are tracking
against delivering on those objectives.
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7. Example
Note how MasterCard maintains
metric discipline while
contextualizing the numbers to their
industry, business, and marketing
initiatives.
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8. Options
Here are some examples of
potential marketing measures that
might be appropriate for your
planning efforts.
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9. Call To Action
If it’s been a while since you and
your team have delved into these
key performance drivers, please
contact me at anytime.
After all, a phone call or email
doesn’t really cost anything.
I look forward to hearing from you.
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Thomas Emrich, Managing Director at ValMark Group
Phone: (401) 450-2841
Email: tlemrich@valmarkgroup.net