Key Marketing Metrics Factsheet

What is a metric?
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. Metrics encourage rigour and objectivity. They make it possible to
compare observations across regions and time periods. They facilitate understanding and
collaboration.

Choosing the right numbers

In business and economics, many metrics are complex. Some are highly specialised and best suited
to specific analyses. Many require data that may be approximate, incomplete or unavailable.
Under these circumstances, no single metric is likely to be perfect. For this reason, we recommend
using a portfolio of metrics in order to view market dynamics from various perspectives and arrive at
triangulated strategies and solutions. Additionally, with multiple metrics, marketers can use each as a
check on the others and maximise the potential of their knowledge. They can also estimate or project
one data point on the basis of the others. Of course, to use multiple metrics effectively, marketers must
appreciate the relations between them and the limitations inherent in each.
When this understanding is achieved, however, metrics can help a firm maintain a productive focus on
customers and markets. They can help managers identify the strengths and weaknesses in both
strategies and execution. Mathematically defined and widely disseminated, metrics can become part of
a precise, operational language within a firm.
Here is a practical reference guide for metrics, grouped around the central issues that they relate to:

1. Share of hearts, minds & markets

Market share
Unit share
Relative market share
Brand development index
Market penetration
Penetration share
Share of requirements
Heavy usage index
Hierarchy of events
Awareness
Top of mind
Ad awareness
Knowledge
Beliefs
Intentions
Purchase habits
Loyalty
Likeability
Willingness to recommend

Customer satisfaction
Willingness to search

2. Margins & profits

Unit margin
Margin (%)
Channel margins
Average price per unit
Price per statistical unit
Variable and fixed costs
Marketing spending
Contribution per unit
Contribution margin (%)
Break-even sales
Target volume
Target revenues
3. Product & portfolio management
Trial
Repeat volume
Penetration
Volume projections
Growth percentage
Growth CAGR
Cannibalisation rate
Fair share draw rate
Brand equity metrics
Conjoint utilities and consumer preferences
Segment utilities
Conjoint utilities and volume projections
4. Customer profitability
Customers
Recency
Retention rate
Customer profit
Customer lifetime value
Prospect lifetime value
Average acquisition cost
Average retention cost
5. Sales force & channel management
Workload
Sales potential forecast
Sales total
Sales force effectiveness

Compensation
Break-even number of employees
Sales funnel, sales pipeline
Numeric distribution (%)
All commodity volume (ACV)
Product category volume (PCV)
Total distribution (%)
Facings
Out of stock (%)
Inventories
Mark-downs
Direct product profitability (DPP)
Gross margin return on inventory investment (GMROII)

6. Pricing strategy

Price premium
Reservation price
Per cent good value
Price elasticity of demand
Optimal price
Residual elasticity

7. Promotion
Baseline sales
Incremental sales / promotion lift
Redemption rates
Costs for coupons and rebates
Percentage sales with coupon
Per cent sales on deal
Per cent time on deal
Average deal depth
Pass-through
Price waterfall
8. Advertising media & Web metrics
Impressions
Gross rating points (GRPs)
Cost per thousand impressions (CPM)
Net reach
Average frequency
Frequency response
Effective reach
Effective frequency
Share of voice
Pageviews
Clickthrough rate

Cost per click

Cost per order
Cost per customer acquired
Visits
Visitors
Abandonment rate

9. Marketing & finance

Net profit
Return on sales (ROS)
Return on investment (ROI)
Economic profit (EVA)
Payback
Net present value (NPV)
Internal rate of return (IRR)
Return on marketing investment (ROMI)
Revenue

Marketing metrics are needed to give a complete picture of a business health. Financial metrics focus
on money and periods of time, telling us how profits, cash and assets are changing. However, we also
need to understand what is happening with our customers, products, prices, channels, competitors and
brands.
The interpretation of marketing metrics requires knowledge and judgement. Knowing the limitations of
individual metrics is important. Businesses are usually complex, requiring multiple metrics to capture
different facets to tell you what is going on.
To find out more about these metrics, please see below.

Adapted by Uptake Strategies from:

Farris, P.W. et al. (2006) Key Marketing Metrics: the 50+ metrics every manager needs to know,
Wharton School Publishing, Harlow.