Question

You have just been hired as the marketing manager at a small retail clothing store. In the past, the store has done all the inventory purchasing, marketing and sales promotions based on intuition. Of course, as a marketing professional, you know that this is not the best strategy. You must convince your new boss to use a more empirical approach based on marketing metrics. Write a few organized paragraphs explaining to your boss what marketing metrics should be used and how they can help make decisions.

Answer 1

In recent years, data-based marketing has swept through the business world. In its wake, measurable performance and accountability have become the keys to marketing success. However, few managers appreciate the range of metrics by which they can evaluate marketing strategies and dynamics. marketers must understand their addressable markets quantitatively. They must measure new opportunities and the investment needed to realize them. Marketers must quantify the value of products, customers, and distribution channels––all under various pricing and promotional scenarios.AS a marketing manager i would suggest my manager to apply following marketing metrics:1.Customer Acquisition Cost (CAC) --> CAC is the metric that matters the most if you are in the early stages of your startup growth because if you want to survive you need users. But it costs money to acquire customers. To calculate your CAC cost, divide your sales and marketing costs, including overhead expenses in these departments, for a given period by the number of customers you picked up during that period 2.Retention --> Cost of acquiring a new customer is 6 7 times than to keep the current client.In addition, it costs me 4 times more to close a deal with new customers than it does to upsell a current one. That means you cannot neglect your current clients. 3.Churn --> Churn, or attrition, is another really important metric you should keep your eye on. This is a measure of how many customers stop paying you for your product. 4.Life Time Value (LTV) --> It’s how much you expect to earn from a customer during the time they are with your company. 5. Product Metabolism --> Product metabolism is a metric created by Dustin Dolginow, and it basically measures the speed at which you and your company move and make decisions. 6.Viral Coefficient --> This metric measures the organic growth of your company. 7.Revenue --> Revenue is the income that your company brings in. It’s usually reported as “sales” or “sales revenue” that comes when customers purchase your product, but revenue can also include other income like interest or late fees. 8.Activation --> Activation is a measurement of the conversion rate from when a visitor or prospect moves to becoming an active user, the signal being some kind of sign up or download. 9.Referral --> This metric is sort of a spin-off of your viral coefficient metric, but it’s truly too important not to measure as a standalone.