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KPI's & Metrics

Measuring your Marketing Activity through KPIs and Metrics

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A strategic question that all effective business leaders ask themselves is, “How can we be sure that we are running the business in ways which actually enhance its value?”

Well-defined and regularly reviewed KPIs (key performance indicators) are critical measures for all businesses no matter the size, because they ultimately determine profitability and shareholder/owner value. KPIs are based on business objectives, which are high-level quantifiable, measurable and results-oriented goals.

Indicators vary from business to business and are usually defined by business stakeholders. As a business progresses towards its strategic goals, its success is measured through the movement of its KPIs.


Successful KPIs are SMART:

Specific - pertaining to the goal of the organization

Measurable - for the organization to assess its progress

Attainable - achievable in terms of the business environment Realistic - directly linking the business and metrics

Time-bound - placing goal achievement in a certain time frame to ensure productivity.

KPIs for Marketing

KPIs, in terms of marketing, help marketing professionals describe the measured efficiency of their marketing activities and processes against business objectives. Performance against set KPIs or metrics are traditionally presented in a marketing balanced scorecard. The benefit of the scorecard is that it clearly identifies the gaps in your reach or your scope of marketing, and provides management with information about how marketing is performing. The establishment of marketing KPIs is important and should be done with some expert advice. KPIs should be contemplated with marketing metrics. In many respects, KPIs in their isolated form measure your marketing performance on activities that have already taken place.

Marketing metrics, through analysis of relevant data, provide a balance to your marketing measurement by providing an insight into future marketing and business performance.

Building effective marketing metrics takes a period of time, as you need historical, financial and KPI performance data from five key areas of the marketing function (products, brand, channels, customer segments and markets). Once metrics are established, management can track, slice and dice comparable marketing data in forecasting future performance and ROI (return on investment). In order to effectively measure marketing, you must be able to demonstrate the links between marketing spending, customer satisfaction/retention, financial outcomes on ROI, and performance against business objectives. It is also important to differentiate marketing performance across the business operational and tactical activities. For example, measuring hit rates on your website or the number of people who attended an event is not measuring marketing performance. This is 'nice to have’ data that means very little until that data is measured against the number of sales versus the number of website visitors. You can then go into further analysis around the cost of securing a customer versus the cost of retaining a customer, customer buying trends and so on. It is important to experiment with your marketing KPIs and metrics to help identify which types of marketing expenditures yield results.

Example of Marketing KPIs

•Revenue generation based on brand recognition

•Number of tenders invited versus tenders won

•Growth of sales revenue versus marketing activity.


Like all businesses, we are tryins to minimize our expenses given the current economic climate. One of the areas we normally cut back
on is marketing. However, I am no longer sure if this is such a good idea.What do you think?
Advertising at this time is essential provided that it is targeted, talks directly to your audience and is very closely measured. Before you
advertise, review your approach to the market and what products and services need to be adjusted or emphasized more prominently in
line with the needs of your market, Your advertising budget is going to be tight, but your expectations for return on investment should be
high. Remember, many businesses will be pulling back on advertising, so this is an opportunistic time for businesses that have identified the
needs of their changing market and are creating effective advertising campaigns that talk directly to their  markets.
Do not be afraid to change your campaigns to suit the current situation. Keep the offer realistic and make sure you are not on such a shoestring personnel budget that you are unable to deliver on your offer - reputation counts in this environment - do not bite off more than you can chew.

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