Marketing Performance Measures

DM Review, September, 2007 by David Raab

Marketing departments are under increasing pressure to report on their activities. The obvious solution is to develop a marketing performance dashboard. But this merely begs the question of what data the dashboard should present. The answer, of course, depends on why the dashboard is being created. Broadly speaking, marketers are asked to answer three kinds of questions: What value is marketing contributing to the organization? Are marketing activities aligned with the corporate strategy? Is marketing operating as efficiently and effectively as possible? Each question leads to a different set of measures.

Return on marketing is the ultimate question, but it has no simple answer. One set of relevant measures shows the outcomes that marketing is expected to effect. These include financial results (sales, profits, cash flow, return on capital); market results (market share, consumer awareness, brand value, customer equity); and customer measures (lifetime value, satisfaction levels, retention rates, cross-purchase rates). ...