Measuring results

Before you launch your marketing campaign, you need to set up key performance indicators, or KPIs, for short. Key performance indicators help you keep track of your overall strategy and your individual marketing programs. Each KPI should be quantifiable and measurable. You can have as many as you want but measure something only if you plan to take action from it. Each KPI should have a target of what you expect to happen plus a high and low number around that target. You and your planning team should agree in advance what action you’ll take if those thresholds are exceeded, high or low. Here’s an example. Assume you create a KPI about the number of new customers acquired each month. You set your target at 500 and you also specify a high and low threshold of 600 and 400, respectively. Now, if your actual customers per month are more than 600, you might consider taking action, such as reducing advertising spending. On the low end, if you’re below 400, you could consider increasing sales incentives. Now, each KPI should be linked to the key parts of your marketing plan, including your goal, segmentation, targeting and positioning, and of course your marketing tactics. For example, you want to measure changes in customer beliefs, such as importance and perception. You may also want to measure their behaviors, such as purchase habits, customer attrition, and retention profile. Now you need to carefully monitor whether you’re achieving the market positioning that you had hoped for. Now for marketing tactics, you could create a KPI for each of the four Ps, if needed. So for example, you might have measures around communications objectives, salesforce effectiveness, distributor activity, store promotions, search engine ratios, social media activity, pricing and discounting rates, product performance, waiting times, and service complaints. Good marketers not only reach their financial goals but they also know whether those goals were achieved the way they expected them to be achieved. They also take immediate action when they detect something is going in the wrong direction.