Today marketing metrics have evolved from various schools of thought. There are four big ones out there that essentially operate as independent islands. Consumer marketing metrics, product marketing metrics, direct/database marketing metrics and Internet marketing metrics. Each area has their own set of tools used to define how they see the world via quantified data. Each area has their strengths and weaknesses. No one area has achieved the overall approach, the holy grail of marketing metrics.
Consumer marketing is mainly driven by large datasets and market share data. You’ll find a lot of statistical analysis in this area combined with qual data. A lot of brand management data gets thrown in here as well. Although this is the oldest of the metrics area, it also is the least well defined. When industries try to adopt the same system used at General Mills, they often find it comes up short for their needs. I remember talking to JP Morgan about this and the person in charge was all for it in words, but the look on her face said something else. And those behind closed doors had no faith in the changes at all. Mainly because the area they were adding these metrics to, was really a B2B business with individual clients they knew by name, not a mass market with millions of customers. A lot of companies want the same success seen by the big CPG’s in marketing, but they don’t understand that CPG marketing is designed for those companies, not others and problems will come up if taken to other industries.
Consumer marketing metrics often focuses on market share, which I think it does very well. Those guys can get in there and really crunch those market share numbers. Pulling the economic data, store sales data and trend data and piecing them together in a way that gives you a really good picture of who has what in the market. But if you want to know the individual and how all that marketing effort spent by CPG’s affect the individual, those metrics come up short.
Product marketing metrics, here we move into gross margins, promo analysis and forecasting. This is what they do best. Product marketers are very good at discussing the various aspects of why a certain product is performing the way it is. You will find metrics that define, pricing, mark up, profit impact, new product purchase rate, and are very well defined in product marketing. Good big picture metrics like SWOT or BCG also get used often here. Often a bit better at defining the actual bottom line impact than the consumer metrics, product marketing metrics do a good job of getting more into the nuts and bolts and how is or why of what your marketing dollars are doing in terms of product performance.
Where product marketing often comes short is the big picture. They are very good with the tactical, the big world view is often lacking and thus, the true global impact is missing. This is not really the fault of the product marketer; it’s more the way in which product marketing is seen, as focused on the product, not really allowed to go beyond its own borders within the organization. Some companies do allow it and the problem I point out is virtually eliminated. But those companies are few, thus the majority of product marketers are still boxed into a defined area, at the mercy of metrics that never really explain why they are there.
Direct marketing, is very much a numbers game. They are very good at direct response, response rate analysis, ROI on response rate, lead generation ROI, etc… They are very numbers driven and can quantify all their actions. This strength becomes their weakness as well. Defined by their numbers, they become trapped by them as well. Direct marketers live and die by their numbers. Pretty much stuck to take an action based on the numbers, there is little room for the creative side of marketing or the ability to just go with the intuitive side. This really bleeds out a large part of marketing from the direct marketing metrics. Essentially, they end up doing their job with one hand tied behind their backs.
In a sense, Internet marketers also have the same pros and cons of direct marketers. So I won’t go into this other than their metrics of choice are different. SEO analysis, click through analysis, shopping cart conversion analysis are the more common tool they use. But beyond that, essentially the same.
Each area has a good solid plus side to them. They also have a side most marketers would wish to get rid of on the negative side. In my next installment, I’ll go into how to do that. Which may be a week or more, depending on how I get over this cold I got this past weekend.