Question

Marketing Metrics. Identify and discuss at least one financial metric and three performance metrics that would be important to monitor Tesla Model S or X’s strategic marketing planning for the marketing efforts you identified for your new marketing mix strategies.

Answer 1

The financial metric that will be important for monitoring Tesla Model S or X’s strategic marketing planning will be the metric called ‘ROI’ or return on investment. Marketing efforts and marketing mix strategies of Tesla towards its S or X model will entail an investment. From this marketing investment the company will expect tangible benefits to accrue to it in the form of revenues. Thus ROI will be measured, using the formula, ROI = (revenue – marketing investment)/marketing investment. The company can calculate the ROI of its marketing efforts and if the percentage is a negative figure then clearly its marketing efforts are not yielding the desired result.

Three performance metrics that can be used by Tesla to monitor its marketing efforts towards model S or X are:

(i) Cost of customer acquisition (COCA): This performance metric will determine Tesla’s cost that will be incurred to acquire a customer. This will then be divided by the number of customers that Tesla has acquired in the given time period.

(ii) Customer lifetime value (CLV): This performance metric will be calculated using the formula – monthly recurring revenue (MRR)*margin/churn. This metric will enable Tesla to determine whether it has been able to increase its MRR from models S or X from the marketing efforts put in by it.

(iii) Customer retention rate: This is calculated using the formula – (original number of customers – lost customers)/original number of customers. Ideally Tesla would want that its marketing efforts to reduce the number of lost customers and hence increase its customer retention rate.