My marketing metrics speech at Helsinki University 2013.

1. Ilkka O. Lavas

2. • 2 books about Entrepreneurship
and marketing
• Partner, board member, investor
• Portfolio of 12 businesses
• Founder in 7 businesses
• 10+ aquisitions done
• 3 exits
• Young Entrepreneur of the year
2009 in Southern Finland –area
• 1153 fb connections, 1035 linkedin
conns, twitter @lavas
• 34years, 2 boys, 1 wife
26.4.2013

3. Is it mathematics
or
is it art?

4. Should it be managed by mathematics
or
artists
or
psychologists?

5. “If you can’t measure it, you can’t manage it.”
– Peter F. Drucker
• “When you can measure what you are speaking about, and express
it in numbers, you know something about it; but when you cannot
measure it, when you cannot express it in numbers, your knowledge
is of a meager and unsatisfactory kind: it may be the beginning of
knowledge, but you have scarcely, in your thoughts, advanced to the
stage of science.”––William Thomson, Lord Kelvin, Popular Lectures
and Addresses (1891–94)

6. “...every metric, whether it is used explicitly to influence behavior, to
evaluate future strategies, or simply to take stock, will affect actions and
decisions.”
Marketing needs metrics
to know
what to do next.

7. • A metric is a measuring system that quantifies a trend, dynamic, or
characteristic.
• In virtually all disciplines, practitioners use metrics to explain
phenomena, diagnose causes, share findings, and project the results
of future events.
• Throughout the worlds of science, business, and government,
metrics encourage rigor and objectivity. They make it possible to
compare observations across regions and time periods. They
facilitate understanding and collaboration.
• Philip Kotler, Nancy Lee, Paul W. Farris - Marketing Strategy from
the Masters

8. • CEO’s and company Boards are looking for more on
costs. Costs are calculated in € or $
• To know how spending on marketing contributes to
profits.
• Marketers are under more and more pressure to “show a
return” on their activities.

9. Income
Marketing costs
=
Real
Effectivity
Of marketing
ROI = Return on Investment =
ROMI = Return on Marketing Investment

10. Marketing Spending ($)
Return on Marketing Investment (ROMI) =
[Incremental Revenue Attributable to Marketing ($
* Contribution Margin (%) - Marketing Spending ($
contribution margin is the marginal profit per unit sale

11. • Company spends 100.000€ direct marketing
campaign, and makes 500.000€ revenue.
Contribution margin is 50%.
• (500000*50% - 100.000) / 100.000 = 1,5
• Every 1 € spent on marketing brings 1,5 € profit
back.

12. Actual Metric % Compared with plan
and/or prior year
% compared with
competition
Sales Volume / value Market share
Marketing investment Period costs Share of voice
Bottom line e.g economic profit Share of profit
Can you really manage your marketing channels with these metrics

13. Consumer metric Measured by
Familiarity Salience, i.e. familiarity relative to the other
brands in the consideration set.
Penetration Number of customers or the number of
active customers as a per cent of the
intended market
What they think about the brand Brand preference as a per cent of
preference of other brands within the
consideration set or intention to buy or
brand knowledge
What they feel Customer satisfaction as per cent average
for consideration set about the brand
Loyalty This may be behavioural (share of category
requirements, repeat buying, retention,
churn) and / or intermediate (commitment,
engagement or bonding)
Availability Distribution, e.g. weighted percentage of
retail outlets carrying the brand

14. • Every company needs their own
metrics
• Define your own KPIs
(key performance indicators)
• How do you measure your
success?
Example ThyssenKrupp

15. • Yes, marketing can be measured
and therefore you can manage it.
• Marketing is art but you measure it in numbers. Therefore
you need to talk to your IT about mathematics and
statistics
• Sources: Marketing and the bottom line -The Marketing
metrics to pump up cash flow
• Wikipedia http://en.wikipedia.org/wiki/Marketing_ROI

16. • Follow me @lavas on Twitter
• LinkedIn: http://www.linkedin.com/in/ilkkaolavas
• www.ilkkaolavas.com
• Facebook: http://www.facebook.com/ilkkaolavas