Engineers have a maxim: “That which gets measured gets done.”
This is a significantly more sophisticated way of saying that when the cat’s present the mice work. From a management point of view, the application of metrics and testing can be an effective tool for keeping senior management in the workroom, even when they’re actually on the beach in Puerto Vallarta.
When metrics and testing are used this way, they lose their effectiveness as tools for quality, learning and improving. When they are used appropriately and are in the hands of the people who will learn the most from them, metrics and testing can enable a marketing team to zig when the market zags and, thereby, outpace the competition. “The Sales and Marketing teams determine the appropriate metrics that will be used to quantify the objectives or outcomes after executing the Marketing Strategy,” says Marketing Strategy, book one in the SMstudy® Guide series.
The goals and objectives of a product’s marketing strategy have already been decided by senior management, stakeholders and the marketing team before metrics are chosen. While senior management controls the big picture, whoever controls the metrics used in testing and measuring a process controls the process. When one sees the activities involved in getting a product launched, established and profitable in its market segment as a process, it becomes apparent that the best people to choose the appropriate metrics would be the marketing team.
The marketing team will not choose metrics in isolation, however, because the inputs for the determining metrics process include the positioning statement—which describes the value a product or brand offers to its target customers—the pricing strategy, the distribution strategy; industry benchmarks and key performance indicators (KPIs) and the goals that are defined at the corporate and/or business unit or geographic levels.
Metrics for measuring the effectiveness of sales and marketing activities can be broadly classified into four categories: customer reach, brand perception, product availability, and sales and profitability. In addition to these category metrics, a Product Life Cycle Analysis is an important tool in this process because it identifies the metrics that are important at each phase of the sales and marketing timeline. The metrics that the marketing team selects may depend on the size and complexity of the company, type of industry, their own preferences and other factors.
Although there are many possible metrics that can be used to measure the effectiveness of a Marketing Strategy, theSMstudy® Guide suggests that the marketing team should “select and prioritize only a few important metrics that can appropriately determine the success or failure of the objectives outlined in the Marketing Strategy.”
The tools the marketing team can use for determining metrics includes meetings and discussions, during which “various business units or departments within the company work together to ensure that their selected metrics are aligned.” Additional tools the team can use are Product Life Cycle Analysis, the SMART Framework, customer reach metrics, brand perception metrics, product availability metrics, and sales and profitability metrics. More detailed information on each of these tools can be found in Marketing Strategy.
Well-chosen metrics will keep you in control.
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