Assessing Marketing Performance
“I know that half of my advertising dollars are wasted… I just don’t know which half”
– John Wanamaker
The assessment of marketing performance is an increasingly important exercise in good business practice. If a business does not understand how their marketing efforts are affecting their customers and overall business performance, how can they expect to optimally allocate their time, money, effort and other resources in the future?
Methods of assessing marketing performance should be carefully designed for the individual business due to the fact that each has (or should have) a unique selling proposition, goals, structure and working environment.
In the current world of business, accounting metrics are the dominant category in which marketing performance is assessed, followed by consumer behaviour, innovativeness and brand equity. Within these categories a study* identified 19 metrics that could be regarded as primary metrics and could therefore serve as a short-list for initial selection. Importantly, the selection of these metrics should be moderated by the business environment as competitive benchmarking requires comparable metrics to be available.
The 19 metrics identified were:
- Consumer attitudes
- Awareness
- Perceived quality
- Consumer satisfaction
- Relevance to consumer
- Perceived differentiation
- Brand/product knowledge
- Consumer Behaviour
- Number of new customers
- Loyalty/retention
- Conversions
- Trade Customer satisfaction
- Number of complaints
- Relative to Competitor
- Relative consumer satisfaction
- Perceived quality
- Innovation
- Number of new products
- Revenue of new products
- Margin of new products
- Accounting
- Sales
- Gross margins
- Profitability
The role of a creative agency in the process of assessing marketing performance is to work with the business to develop campaigns and collateral of which the effects can be accurately measured against the desired metrics. Agencies with marketing knowledge are also in the position to assist businesses construct or refine their marketing plan to establish key metrics and how they can be assessed.
Assessing marketing performance should be an ongoing, ever-evolving process in which the data and insights obtained are utilised when planning for future business activities. The assessment methods should also be tweaked and refined to ensure the metrics measured are in-line and useful to the business as it exists and in the future, not how it existed last time assessment was undertaken.
It can be much easier for large businesses with plenty of human resources to implement and manage an ongoing marketing assessment program but with careful and clever planning even small businesses – for whom it is possibly more critical as they lack disposable resources by comparison – are capable of conducting effective assessment of their own.
* Ambler, T., Kokkinaki, F., & Puntoni, S. (2004). Assessing Marketing Performance: Reasons for Metrics Selection. Journal of Marketing Management, 20, 475-498.