How to Choose a Valuable Marketing Metric

For a metric to serve a positive purpose to a campaign it must be worth the time to analyse what it measures. There is not point having 50 metrics that measure the same data as ONE effective metric.

The Value of a Metric

Given the fact that there is literally a limitless number of potential metrics there comes a point where they are no longer adding value to the measurement or overall goal. A common identification is using the process of data –> information –> knowledge. If we ask “will this create knowledge” and the answer is no, we can safely say that the data that the metric is measuring is of no value to the bigger picture.

To make a metric valuable, the information that has been gathered from the data can often be transformed into visual forms that enable a better understanding of the information and therefore increasing the likelihood of converting that information into knowledge.

Metrics are of more value and use in markets of stability. Measuring sales as a means of predicting future sales is useful for an item like milk or other FMCGs. This metric has less value in terms of predicting when it comes to something like fashion that is very subjective and may experience high or low sales depending on the opinions of the audience that year.

Metrics can also have a complimentary relationship and increase their value when used in conjunction. This becomes more of the case when it is a complicated measurement being sought. Various metrics are more likely to give the valuable, big picture rather than a distorted single metric leading you in the wrong direction.

Summary

Like most things, the larger the test means more data and usually more accurate knowledge at the end of the process. To conclude, a clear definition must be decided on then data must be communicated effectively and can be more useful at predicting stable markets and enhanced further through the addition of complimentary metrics.

References:

Bendle, NT, PW Farris, PE Pfeifer & DJ Reibstein (2016) Marketing Metrics: The Manager’s Guide to Measuring Marketing Performance, 3rd edition. Pearson: New Jersey.