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This chapter is from the book

1.6 Marketing Metrics Survey

Why Do a Survey of Which Metrics Are Most Useful?

From the beginning of our work on this book, we have fielded requests from colleagues, editors, and others to provide a short list of the "key" or "top ten" marketing metrics. The intuition behind this request is that readers (managers and students) ought to be able to focus their attention on the "most important" metrics. Until now we have resisted that request.

Our reasons for not providing the smaller, more concentrated list of "really important" metrics are as follows. First, we believe that any ranking of marketing metrics from most to least useful will depend on the type of business under consideration. For example, marketers of business-to-business products and services that go to market through a direct sales force don't need metrics that measure retail availability or dealer productivity.

The second reason we believe that different businesses will have different rankings is that metrics tend to come in matched sets. For example, if customer lifetime value is important to your business (let's say, financial services), then you are likely to value measures of retention and acquisition costs as well. The same notion applies to retail, media, sales force, and Web traffic metrics. If some of these are important to you, others in the same general categories are likely to be rated as useful, too.

Third, businesses don't always have access (at a reasonable cost) to the metrics they would like to have. Inevitably, some of the rankings presented will reflect the cost of obtaining the data that underlie the particular metrics.

Fourth, some metrics might be ranked lower, but ultimately prove to be useful, after managers fully understand the pros and cons of a particular metric. For example, many believe that Economic Value Added (EVA) is the "gold standard" of profitability metrics, but it ranks far below other financial performance measures such as ROI. We believe one reason for the low ranking of EVA is that this metric is less applicable at the "operating level" than for overall corporate performance. The other reason is that the measure is relatively new, and many managers don't understand it as well. Customer Lifetime Value is another metric that is gaining acceptance, but is still unfamiliar to many managers. If all these metrics were well understood, there would be no need for a book of this type.

In summary, while we believe the rankings resulting from our survey can be useful, we ask readers to keep the above points in mind. We report in Tables 1.2 (page 13) and 1.3 (page 21) the overall ranking of the usefulness of various metrics as well as the different rankings for different types of businesses and different categories of metrics. Although no business is likely to be exactly like yours, we thought readers might find it useful to see what other marketers thought which metrics were most useful in monitoring and managing their businesses. For a look at the complete survey, see Appendix A.

Table 1.2. Survey of Senior Marketing Managers on the Perceived Usefulness of Various Marketing Metrics (n = 194)

All Who Responded to Question

Customer Relationship

What Does Your Business Sell?

Who Are Your Customers?

Group

Contract

Frequent Purchase

Infrequent Purchase

Products

Services

Mixed

End Consumers

Business

Mixed

# of People in Group

194

65

69

41

105

36

31

44

85

48

Metric

Question Number

Chapter in Book

% Saying Very Useful

Rank

Rank

Rank

Rank

Rank

Rank

Rank

Rank

Rank

Rank

Net Profit

Q8.10#1

10

91%

1

1

1

1

1

1

1

1

1

1

Margin %

Q8.3#2

3

78%

2

10

2

3

2

6

2

2

3

6

Return on Investment

Q8.10#3

10

77%

3

4

5

2

3

5

3

3

2

8

Customer Satisfaction

Q8.2#12

2

71%

4

2

17

11

13

3

5

19

6

4

Target Revenues

Q8.4#2

3

71%

5

8

12

5

12

8

3

13

7

6

Sales Total

Q8.6#3

6

70%

6

7

10

8

10

8

8

16

3

12

Target Volumes

Q8.4#1

3

70%

7

5

6

11

8

13

10

8

7

10

Return on Sales

Q8.10#2

10

69%

8

12

12

3

9

17

8

4

17

2

Loyalty

Q8.2#8

2

69%

9

70

71

98

4

11

17

13

5

16

Annual Growth %

Q8.4#7

4

69%

10

13

3

11

7

11

15

8

10

10

Dollar Market Share

Q8.1#1

2

67%

11

13

7

7

5

13

21

8

11

13

Customers

Q8.5#1

5

67%

12

5

16

11

19

4

5

26

13

3

Unit Margin

Q8.3#1

3

65%

13

17

9

5

11

21

10

13

12

13

Retention Rate

Q8.5#3

5

63%

14

3

26

26

28

2

5

76

9

5

Sales Potential Forecast

Q8.6#2

6

62%

15

11

18

11

17

18

10

23

14

18

Unit Market Share

Q8.1#2

2

61%

16

23

4

16

5

54

30

8

18

17

Brand Awareness

Q8.2#1

2

61%

17

23

7

16

14

33

10

4

25

9

Variable and Fixed Costs

Q8.3#6

3

60%

18

15

11

32

15

8

30

19

21

13

Willingness to Recommend

Q8.2#10

2

57%

19

9

32

26

30

6

19

36

16

29

Volume Projections

Q8.4#6

4

56%

20

23

14

21

16

31

24

45

15

27

Sales Force Effective

Q8.6#4

6

54%

21

21

22

21

25

31

15

42

23

18

Price Premium

Q8.8#1

7

54%

22

28

27

8

23

33

17

56

19

25

Marketing Spending

Q8.3#7

3

52%

23

51

15

16

18

67

21

6

46

21

Average Price per Unit

Q8.3#4

3

51%

24

23

23

32

21

33

38

27

26

25

Penetration

Q8.4#5

4

50%

25

39

19

21

22

54

24

39

24

32

Top of Mind

Q8.2#2

2

50%

26

33

25

26

30

33

30

39

27

21

Compensation

Q8.6#5

6

49%

27

17

30

52

32

18

46

42

20

58

Return on Marketing Investment (ROMI)

Q8.10#8

10

49%

27

47

32

8

26

45

24

19

39

24

Consumer Beliefs

Q8.2#5

2

48%

29

33

35

21

47

21

10

30

29

36

Contribution Margin %

Q8.3#9

3

47%

30

56

21

21

29

46

24

45

32

21

Net Present Value

Q8.10#6

10

46%

31

31

37

26

39

27

20

39

41

20

Market Penetration

Q8.1#6

2

45%

32

17

41

58

38

41

38

45

35

33

Sales Funnel, Sales Pipeline

Q8.6#7

6

44%

33

17

60

32

54

21

21

74

21

58

Relative Market Share

Q8.1#3

2

44%

34

36

38

40

32

33

65

58

41

27

Purchase Habits

Q8.2#7

2

43%

35

39

35

43

27

41

80

30

29

69

Inventories

Q8.7#7

6

43%

36

62

20

48

20

109

59

24

45

46

Likeability

Q8.2#9

2

43%

37

28

54

38

47

21

46

45

37

39

Effective Reach

Q8.9#6

9

42%

38

48

40

32

37

46

44

7

61

46

Economic Profit (EVA)

Q8.10#4

10

41%

39

31

63

26

50

27

30

71

36

38

Impressions

Q8.9#1

9

41%

40

36

61

26

50

41

24

19

64

29

Customer Profit

Q8.5#4

5

41%

41

16

69

52

59

18

54

73

28

46

Optimal Price

Q8.8#5

7

41%

42

39

47

36

36

46

46

45

49

36

Payback

Q8.10#5

10

41%

42

51

51

20

54

27

43

67

34

44

Incremental Sales or Promotional Lift

Q8.8#8

8

41%

44

66

24

52

24

96

65

24

50

51

Consumer Knowledge

Q8.2#4

2

40%

45

36

57

43

64

21

30

58

37

51

Contribution per Unit

Q8.3#8

3

40%

46

71

29

48

39

62

46

63

54

29

Break-Even Sales

Q8.3#10

3

40%

46

51

39

43

43

40

59

58

41

46

Customer Lifetime Value

Q8.5#5

5

39%

48

23

77

40

69

21

30

76

46

33

Price Elasticity

Q8.8#4

7

39%

48

71

31

38

35

72

54

34

56

39

Purchase Intentions

Q8.2#6

2

39%

50

54

67

19

62

41

30

45

32

79

Growth CAGR

Q8.4#8

4

38%

51

45

32

74

41

54

72

83

31

45

Internal Rate of Return

Q8.10#7

10

38%

52

44

63

36

66

27

29

71

53

35

Effective Frequency

Q8.9#7

9

37%

53

56

52

43

45

67

44

12

74

46

Visitors

Q8.9#15

9

37%

54

39

58

58

60

46

38

53

51

62

Average Acquisition Cost

Q8.5#7

5

36%

55

21

95

43

77

13

38

83

41

43

Share of Voice

Q8.9#8

9

36%

55

66

43

52

45

62

64

33

72

39

Visits

Q8.9#14

9

36%

57

39

58

66

61

46

38

53

55

51

Workload

Q8.6#1

6

36%

58

50

48

66

53

54

59

79

40

58

Repeat Volume

Q8.4#4

4

36%

59

56

46

58

50

54

65

64

52

58

Clickthrough Rate

Q8.9#10

9

35%

60

33

61

77

63

33

54

29

67

51

Baseline Sales

Q8.8#7

8

34%

61

71

42

56

42

72

80

45

56

69

Total Distribution

Q8.7#4

6

34%

62

84

43

48

44

96

59

28

66

69

Net Reach

Q8.9#4

9

34%

62

62

48

66

58

72

51

37

62

62

Brand Penetration

Q8.1#7

2

34%

64

62

54

62

47

62

75

30

69

62

Out of Stock %

Q8.7#6

6

33%

65

86

27

88

34

109

86

18

64

85

Average Retention Cost

Q8.5#8

5

33%

66

30

98

40

82

13

51

91

48

51

Product Category Volume

Q8.7#3

6

33%

67

84

45

57

57

92

58

62

62

51

Cost per Customer Acquired

Q8.9#13

9

32%

68

48

72

66

70

54

51

74

60

51

Average Frequency

Q8.9#5

9

31%

69

76

48

71

54

83

75

16

77

86

Channel Margin

Q8.3#3

3

30%

70

66

80

48

70

83

37

67

82

39

Direct Product Profitability

Q8.7#9

6

30%

71

76

56

62

67

72

54

66

69

62

Recency

Q8.5#2

5

29%

72

56

74

71

75

33

80

94

59

62

Cost per Thousand Impression

Q8.9#3

9

28%

73

62

81

62

70

62

75

38

83

75

Pageview

Q8.9#9

9

28%

74

45

84

88

87

54

46

56

83

69

Cost per Click

Q8.9#11

9

27%

75

56

86

77

79

46

65

53

88

75

Brand Equity Metrics

Q8.4#10

4

26%

76

76

76

77

68

72

89

58

90

74

Markdowns

Q8.7#8

6

26%

77

96

52

84

65

106

80

34

90

86

Cannibalization Rate

Q8.4#9

4

24%

78

88

65

95

74

83

97

78

76

91

Abandonment Rate

Q8.9#16

9

24%

79

56

90

95

90

62

71

81

87

68

Ad Awareness

Q8.2#3

2

23%

80

76

88

77

78

72

80

64

104

75

Cost per Order

Q8.9#12

9

23%

81

71

91

74

90

67

65

95

73

75

Gross Rating Points

Q8.9#2

9

23%

82

88

91

58

84

67

80

42

99

92

Break-Even Number of Employees

Q8.6#6

6

23%

83

66

96

71

100

46

59

85

69

96

Hierarchy of Effects

Q8.1#11

2

23%

84

81

83

84

80

72

86

92

83

69

Numeric Distribution %

Q8.7#1

6

22%

85

108

75

62

73

106

103

69

89

97

All Commodity Volume

Q8.7#2

6

22%

85

96

67

93

75

83

89

69

78

104

Penetration Share

Q8.1#8

2

22%

87

76

93

74

84

72

75

95

75

79

Brand Development Index

Q8.1#4

2

21%

88

91

79

94

89

83

75

80

94

79

Prospect Lifetime Value

Q8.5#6

5

21%

89

81

106

66

95

46

104

98

67

97

Percentage Sales on Deal

Q8.8#12

8

21%

89

91

82

87

92

83

72

87

79

92

Willingness to Search

Q8.2#13

2

20%

91

71

102

77

86

72

107

85

79

100

Trial Volume

Q8.4#3

4

19%

92

90

72

108

82

96

97

90

79

103

Net Promoter Score

Q8.2#11

2

19%

93

55

101

103

94

61

107

106

58

109

Facings

Q8.7#5

6

19%

94

99

66

105

81

72

107

45

99

110

Redemption Rates

Q8.8#9

8

19%

95

102

69

100

92

96

104

82

94

92

Cost of Coupons/ Rebates

Q8.8#10

8

19%

95

102

77

90

87

96

97

87

102

79

Category Development Index

Q8.1#5

2

18%

97

95

87

103

97

83

86

99

92

79

Reservation Price

Q8.8#2

7

17%

98

99

93

84

96

72

89

100

86

99

GMROII

Q8.7#10

6

16%

99

102

84

99

98

96

89

87

94

100

Percent Good Value

Q8.8#3

7

16%

99

91

108

77

107

67

72

100

109

62

Percentage Sales with Coupon

Q8.8#11

8

16%

99

109

88

90

98

96

89

93

105

86

Price per Statistical Unit

Q8.3#5

3

16%

102

91

102

90

104

83

65

104

94

79

Conjoint Utilities

Q8.4#11

4

14%

103

81

99

108

101

92

89

107

94

89

Residual Elasticity

Q8.8#6

7

14%

104

98

109

77

102

92

97

109

92

92

Percent Time on Deal

Q8.8#13

8

14%

105

102

96

95

105

96

89

97

102

104

Conjoint Utilities & Volume Projection

Q8.4#12

4

13%

106

87

99

108

103

92

89

103

105

89

Pass-Through

Q8.8#15

8

11%

107

102

107

100

108

83

97

102

108

100

Share of Requirements

Q8.1#9

2

10%

108

102

102

105

106

106

106

108

99

108

Average Deal Depth

Q8.8#14

8

10%

109

110

105

100

109

96

97

105

107

104

Heavy Usage Index

Q8.1#10

2

6%

110

101

110

107

110

96

110

110

110

104

Table 1.3. Ranking of Metrics by Category/Chapter (See Appendix A for complete survey)

Metric

Section in Survey

Question Number

Chapter in Book

% Saying Very Useful

Ranking in Survey Section

Dollar Market Share

1

Q8.1#1

2

67%

1

Unit Market Share

1

Q8.1#2

2

61%

2

Market Penetration

1

Q8.1#6

2

45%

3

Relative Market Share

1

Q8.1#3

2

44%

4

Brand Penetration

1

Q8.1#7

2

34%

5

Hierarchy of Effects

1

Q8.1#11

2

23%

6

Penetration Share

1

Q8.1#8

2

22%

7

Brand Development Index

1

Q8.1#4

2

21%

8

Category Development Index

1

Q8.1#5

2

18%

9

Share of Requirements

1

Q8.1#9

2

10%

10

Heavy Usage Index

1

Q8.1#10

2

6%

11

Customer Satisfaction

2

Q8.2#12

2

71%

1

Loyalty

2

Q8.2#8

2

69%

2

Brand Awareness

2

Q8.2#1

2

61%

3

Willingness to Recommend

2

Q8.2#10

2

57%

4

Top of Mind

2

Q8.2#2

2

50%

5

Consumer Beliefs

2

Q8.2#5

2

48%

6

Purchase Habits

2

Q8.2#7

2

43%

7

Likeability

2

Q8.2#9

2

43%

8

Consumer Knowledge

2

Q8.2#4

2

40%

9

Purchase Intentions

2

Q8.2#6

2

39%

10

Ad Awareness

2

Q8.2#3

2

23%

11

Willingness to Search

2

Q8.2#13

2

20%

12

Net Promoter Score

2

Q8.2#11

2

19%

13

Margin %

3

Q8.3#2

3

78%

1

Unit Margin

3

Q8.3#1

3

65%

2

Variable and Fixed Costs

3

Q8.3#6

3

60%

3

Marketing Spending

3

Q8.3#7

3

52%

4

Average Price per Unit

3

Q8.3#4

3

51%

5

Contribution Margin %

3

Q8.3#9

3

47%

6

Contribution per Unit

3

Q8.3#8

3

40%

7

Break-Even Sales

3

Q8.3#10

3

40%

8

Channel Margin

3

Q8.3#3

3

30%

9

Price per Statistical Unit

3

Q8.3#5

3

16%

10

Target Revenues

4

Q8.4#2

3

71%

1

Target Volumes

4

Q8.4#1

3

70%

2

Annual Growth %

4

Q8.4#7

4

69%

3

Volume Projections

4

Q8.4#6

4

56%

4

Penetration

4

Q8.4#5

4

50%

5

Growth CAGR

4

Q8.4#8

4

38%

6

Repeat Volume

4

Q8.4#4

4

36%

7

Brand Equity Metrics

4

Q8.4#10

4

26%

8

Cannibalization Rate

4

Q8.4#9

4

24%

9

Trial Volume

4

Q8.4#3

4

19%

10

Conjoint Utilities

4

Q8.4#11

4

14%

11

Conjoint Utilities & Volume Projection

4

Q8.4#12

4

13%

12

Customers

5

Q8.5#1

5

67%

1

Retention Rate

5

Q8.5#3

5

63%

2

Customer Profit

5

Q8.5#4

5

41%

3

Customer Lifetime Value

5

Q8.5#5

5

39%

4

Average Acquisition Cost

5

Q8.5#7

5

36%

5

Average Retention Cost

5

Q8.5#8

5

33%

6

Recency

5

Q8.5#2

5

29%

7

Prospect Lifetime Value

5

Q8.5#6

5

21%

8

Sales Total

6

Q8.6#3

6

70%

1

Sales Potential Forecast

6

Q8.6#2

6

62%

2

Sales Force Effective

6

Q8.6#4

6

54%

3

Compensation

6

Q8.6#5

6

49%

4

Sales Funnel, Sales Pipeline

6

Q8.6#7

6

44%

5

Workload

6

Q8.6#1

6

36%

6

Break-Even Number of Employees

6

Q8.6#6

6

23%

7

Inventories

7

Q8.7#7

6

43%

1

Total Distribution

7

Q8.7#4

6

34%

2

Out of Stock % (OOS)

7

Q8.7#6

6

33%

3

Product Category Volume (PCV)

7

Q8.7#3

6

33%

4

Direct Product Profitability (DPP)

7

Q8.7#9

6

30%

5

Markdowns

7

Q8.7#8

6

26%

6

Numeric Distribution %

7

Q8.7#1

6

22%

7

All Commodity Volume (ACV)

7

Q8.7#2

6

22%

8

Facings

7

Q8.7#5

6

19%

9

Gross Margin Return on Inventory Investment (GMROII)

7

Q8.7#10

6

16%

10

Price Premium

8

Q8.8#1

7

54%

1

Optimal Price

8

Q8.8#5

7

41%

2

Incremental Sales or Promotional Lift

8

Q8.8#8

8

41%

3

Price Elasticity

8

Q8.8#4

7

39%

4

Baseline Sales

8

Q8.8#7

8

34%

5

Percentage Sales on Deal

8

Q8.8#12

8

21%

6

Redemption Rates

8

Q8.8#9

8

19%

7

Cost of Coupons/Rebates

8

Q8.8#10

8

19%

8

Reservation Price

8

Q8.8#2

7

17%

9

Percent Good Value

8

Q8.8#3

7

16%

10

Percentage Sales with Coupon

8

Q8.8#11

8

16%

11

Residual Elasticity

8

Q8.8#6

7

14%

12

Percent Time on Deal

8

Q8.8#13

8

14%

13

Pass-Through

8

Q8.8#15

8

11%

14

Average Deal Depth

8

Q8.8#14

8

10%

15

Effective Reach

9

Q8.9#6

9

42%

1

Impressions

9

Q8.9#1

9

41%

2

Effective Frequency

9

Q8.9#7

9

37%

3

Visitors

9

Q8.9#15

9

37%

4

Share of Voice

9

Q8.9#8

9

36%

5

Visits

9

Q8.9#14

9

36%

6

Clickthrough Rate

9

Q8.9#10

9

35%

7

Net Reach

9

Q8.9#4

9

34%

8

Cost per Customer Acquired

9

Q8.9#13

9

32%

9

Average Frequency

9

Q8.9#5

9

31%

10

Cost per Thousand

Impression (CPM)

9

Q8.9#3

9

28%

11

Pageview

9

Q8.9#9

9

28%

12

Cost per Click (CPC)

9

Q8.9#11

9

27%

13

Abandonment Rate

9

Q8.9#16

9

24%

14

Cost per Order

9

Q8.9#12

9

23%

15

Gross Rating Points

9

Q8.9#2

9

23%

16

Net Profit

10

Q8.10#1

10

91%

1

Return on Investment (ROI)

10

Q8.10#3

10

77%

2

Return on Sales (ROS)

10

Q8.10#2

10

69%

3

Return on Marketing Investment (ROMI)

10

Q8.10#8

10

49%

4

Net Present Value (NPV)

10

Q8.10#6

10

46%

5

Economic Profit (EVA)

10

Q8.10#4

10

41%

6

Payback

10

Q8.10#5

10

41%

7

Internal Rate of Return (IRR)

10

Q8.10#7

10

38%

8

Survey Sample

Our survey was completed by 194 senior marketing managers and executives. More than 100 held the title of Vice President/Director/Manager or "Head" of Marketing, some with global responsibility. Most held titles such as VP of Marketing, Marketing Director, and Director Sales and Marketing. There were 10 presidents and C-level managers with heavy marketing responsibilities, and the remaining respondents included product/project/category managers, trade marketing managers, pricing managers, key account managers, development managers, and assistant/associate vice presidents.

Industries represented in our survey are too diverse to easily summarize. No more than 10 responses from a single industry were recorded, and the respondents listed their markets as aerospace, automobiles, banking, chemicals, consumer goods, construction, computers, consulting, education, industrial distribution, investments, government, health care, housing, insurance, information technology, manufacturing, materials, medical devices, paints, pharmaceuticals, retailing, software, telecommunications, and transportation. Roughly 20% of respondents did not provide a specific industry.

Survey questions asked respondents to rate the usefulness of particular metrics in monitoring and managing their businesses. Note that this survey asks managers to give ratings with respect to how these metrics are actually used but does not inquire about the reason. Nor did the survey offer guidance concerning the meaning of "useful"—that was left as a matter of interpretation for survey participants.

Financial metrics are generally rated very high in usefulness compared to any true marketing metrics. This is not surprising given that financial metrics are common to almost every business.

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