Key Metrics Every Marketer Needs - Assignment Example

Marketing Decision Analysis Student’s Name Professor University Date Table of Contents Table of Contents 2 Introduction 3 Part one: Question 1 3 Financial and nonfinancial indicators 3 Leading and lagging indicators 4 Part two: question 2 7 Impact of advances 7 Trends across generations 7 Prediction on the basis of the marketing metrics 7 Conclusion 9 References 10 Introduction The appropriate metrics as applied in marketing have made it easy to reveal the progress achieved in a quantifiable way (Davis 2012). The budget can be justified by the marketers and reveal that there has been significant results that have been achieved.Across the generation, there are identifiable trends that have been adopted to fit the various markets be it the B to C and the B to B considerations. This report identifies the financial and the non-financial metrics indicators. Also in consideration here are the lagging andleading indicators. The technological advances can therefore be closely linked to the dynamism in the marketing. This touches on all levels both in the organisation and even outside. Following these advances, the year 2019 is put to focus in terms of the marketing metrics. Part one: Question 1 Financial and nonfinancial indicators Xenon Company serves both the consumer and business customers. The measurement of the performance of the marketing department will be done on the basis of the financial and nonfinancial indicators as follows. The financial metrics are expenditure on marketing as a revenue percentage, budget vs. expenditure on marketing, revenue per customer and ROMI. The non-financial metrics in the consideration here are the new customers’ numbers; traffic on the websites; share of the market in terms of volume and value; and the awareness of the brand. The financial factors here are in the effort of linking the activities of marketing with the outcomes financially (Schulze, Skiera & Wiesel 2012). The ROMI metric is majorly preferred here in that the investments on the marketing endeavours are measured against their returns financially. Simply in this case, there is a consideration on how much have been spent by the Xenon company on the marketing and how much have resulted thereof financially. The financial metric of revenue per customer is closely linked to ROMI since the outcome of the Xenon company is reflects the marketing activities thus involved. The metric of expenditure on marketing as a revenue percentage and budget vs. expenditure on marketing are more appropriate in the making of generalisation on the indicators as opposed to ROMI that is case specific. The nonfinancial parameters that are in consideration here focus on the website and the retail and wholesale outlets owned by Xenon. Factors like market share and brand awareness, when identified are a strong support towards high returns. The challenge lies on the intangibility of these indicators. They are however long-term in their view and therefore they are able to quantify results. The website success can be identified by the number of the special visits that it has over a specified interval. On the outlets, the number of the new customers that each receives should be identified and the aggregate mark considered. ROMI results challenged the basis of the short term measure in this case are still of benefit. ROMI is able to identify, in a direct way, the revenue results as a dependent on the marketing in a critical way (Powell, Groves & Dimos 2011). Leading and lagging indicators The lagging perspective uses the measurement of the earlier happenings as the marketing metrics. There is, however, more advantage if this is used alongside the leading indicators to reveal what for the prediction of the success to be achieved. The Xenon consideration here will therefore entail the view of lagging indicators used as inventory turnover, expenses, sales and revenue. The leading factor to consider here is the tracking the turnover of the receivables, customer satisfaction and revenue forecasts. The leading indicators are hypothetically integrated in a measurement mode for the explanation or prediction of behaviour while lagging indicators here are fundamentally measurements of issues that have already occurred. The proposed way is that of having a graph that captures the trends that are prevailing using the lagging indicators. This entails the past and the present. The earlier predictions and the reality achieved are monitored and the disparities identified. Within this framework, the existing data in marketing trends is used to adjust the graph to fit the trends as a projection of what is expected to be in the long-run. The expected revenues, the level of consumer satisfaction and the possibility of the turnover of the receivables will therefore be identified in this way. This has reliance on the inventory turnover, expenses, sales and revenue as the data that is already available recorded in the earlier happenings of the Xenon outlets and the website performance as well. Financial and nonfinancial indicators; leading and lagging indicators Metric name Specifics of the metrics Mode of application Financial indicators expenditure on marketing as a revenue percentage budget vs. expenditure on marketing revenue per customer ROMI linking the activities of marketing with the outcomes financially Nonfinancial indicators the new customers’ numbers traffic on the websites share of the market in terms of volume and value the awareness of the brand Majorly intangible financially in nature but the long-run view it’s a major facilitator Leading factors tracking the turnover of the receivables customer satisfaction revenue forecasts Primarily predictive in nature Lagging factors inventory turnover expenses Sales revenue Measurement based on the past/ achieved occurrences The measurement of this data is on the parameters like the amount charged for every page viewed, individual charges for the followers and the individual lead costs. The marketing costs aggregately should be a major consideration of the metrics. These costs are basically related to the acquisition of the customer and the revenue achieved. The marketing team will be the one to consider the details that are in the metrics. The presentation of these end values are directed to the executives like the CIO, CFO, CEO etc. and the directors. The metrics that will be of consideration here includes: Costs associated with acquiring a customer The percentage of marketing in the total costs of acquiring customers The value of the customer acquired in comparison to the acquisition costs incurred The payback period of the costs of customer acquisition The level of influence that a customer received from marketing The metrics in marketing to present to the executives and the directors Description metric computation Benchmarking Cost of acquiring a customer High dependence on the pricing point and the industry % of marketing in the total costs of acquiring customers Considers the sales in general as the pivotal element The value of the customer acquired in comparison to the acquisition costs incurred (linked to ROMI) The value should be greater than one where a greater value is more desirable The payback period of the costs of customer acquisition The timeframe should not be to short (underinvestment) or too long (slow returns) The level of influence that a customer received from marketing Determining the level of the marketing operation interaction that the customers experience before they commit themselves to payments A high level of prior awareness reveal a fruitful marketing In both considerations the ROMI criteria is the best consideration. The best justification that any organisation can receive on any on the investments made is fundamentally on the returns. The ROMI is a branch of return on investment (ROI). The marketers therefore will need to reveal a revenue impact that is direct in association to the investments made on marketing. Part two: question 2 Impact of advances There has been a widespread usage of the technological advances that has brought about revolutionised economy. The setup of many sectors in the market has been changed drastically. This can be clearly identified closely by those who have been in the research or directly involved in these periods shifts. The way the business does transactions to the fellow businesses and also to the final consumers have been significantly affected. There is a generational transition as the various innovations are achieved where the enhancement thus attained are exemplified. (Kaplan, Piskin & Bol 2010, p.57) Trends across generations The trend of the collection, analysis and presentation of data has grown from the surveys done on a door to door basis, mail and phone usage to the domination by the internet as recently adopted method. The former strategies have been on their decline by day. The ease of usage and the efficiency attained by the internet coverage in handling of the data is plain. The evolution of the marketing technology is to be expected in the coming generation. Prediction on the basis of the marketing metrics By the year 2019, there is an expected almost complete link in the marketing network whether between businesses or with the particular consumers. The shift from mere analysis from what the response would be to the state of having the response at hand is expected across all levels. The adaptation to the trends will ensure that there is competitive advantage in the particular activities in concern. The market share of the organisations that will not employ these digitalised trends in the handling data at all levels will be expected to drop drastically. Adoption of technology is a must at all levels The online marketing is one of the major developments that have gained a lot of usage and the trends continue by day (Hanafizade& Behboudi 2012). In the same way, there is ease in the data collection, analysis and presentation by the use the internet and the computer software. The feedback is expected with speed and therefore quick measures have to be well planned for and taken. The measures will primarily be informed by the lagging indicators where the previous trends are adopted. This already available data is then used to predict the expected state in using the leading indicators. Five years from now, the key performance indicators have to be fully accounted for. The marketing data emphasis is to be developed in such a way as to avoid any generalisation. Issues such as customer satisfaction level are to be developed in a quantifiable analysis on a developed parameter of use. These indicators include the product quality, the percentage of the market share, the return on investment and the particular unit sales. The ROMI criterion is likely to be adopted as a basic measurement of efficiency of the marketing activities. It is expected that the complex computations and presentation of the data associated will be heightened. The collection mode and the presentation may be relatively easier than the computation level. Other parties may shun from the details thus involved and just await the final results from the marketing departments. The executives and the board of directors will be more concerned with the final presentations. The big question that stands out will therefore be the need to know how much has been assigned to the marketing and also how much has been contributed in the revenue in term of the revenues. In the digital preferences that take over the traditional settings by day, the data will be directed toward a specified way of operation. This include direct analysis of the acquisition cost of the customers and the level of the influence ton the consumers that can be directly linked to the marketing endeavours. The refining of the marketers' operations is therefore further expected as the advances demand (Trainor, Rapp, Beitelspacher& Schillewaert 2011). There will be definite need for a totally responsible and integrated framework of marketing that runs across the organisation and out. The complication of the data collection, analysis will therefore be met by an equally ready marketing team. The leading metric indicators will therefore be used to form reliable predictions about what is to be actually expected. Conclusion As it has been identified, the marketing will heavily rely on the data at the stage of capturing it, analysis and presentation all comprised in the marketing. The financial, nonfinancial, leading and lagging indicators have been considered. Across the generation, there are identifiable trends that have been adopted to fit the various markets be it the B to C and the B to B considerations. The technological advances can therefore be closely linked to the dynamism in the marketing. This touches on all levels both in the organisation and even outside. Following these advances, a lot of transition as have been explained in the report will be achieved. References Davis, J A 2012 Measuring Marketing: 110+ Key Metrics Every Marketer Needs John Wiley & Sons Hanafizadeh, P& Behboudi, M 2012 Online Advertising and Promotion: Modern Technologies for Marketing Business Science Reference Kaplan, M D, Piskin, B& Bol, B 2010 Educational Blogging Integrating Technology Into Marketing Experience Journal of Marketing Education, 321, 50-63 Powell, G, Groves, S& Dimos, J 2011 ROI of Social Media: How to improve the return on your social marketing investment Wiley Schulze, C, Skiera, B& Wiesel, T 2012 Linking customer and financial metrics to shareholder value: the leverage effect in customer-based valuation Journal of Marketing, 762, 17-32. Trainor, K J, Rapp, A, Beitelspacher, L S & Schillewaert, N 2011 Integrating information technology and marketing: An examination of the drivers and outcomes of e-Marketing capability Industrial Marketing Management, 401, 162-174. Read More