Tuesday, September 26, 2006

Marketing Metrics

Roy Young relates a story about Poland and metrics:

In the 1970s, the Polish government set out to make its furniture industry more competitive in the global economy. To that end, the government rewarded furniture factories based on the total weight of their products manufactured. As a result, the citizens of Poland now have the world's heaviest furniture
What you measure and reward is generally what you improve. So Young suggests we, as marketers, concentrate on metrics that are directly relevant to the bottom line (cash flow, revenue). He lays out a procedure for mapping marketing activities to outcomes and metrics.

A pitfall of this approach is that marketers can't control the bottom line. Imagine, for example, all the company's sales reps quit. Revenue will drop no matter what the marketers do. Should they be held accountable?

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