Today, many marketing managers measure marketing performance using marketing metrics and profitability analysis to interpret not only the company’s marketing performance but also to quantify, and compare, results against the marketing goals and objectives set forth by that particular firm. One effective method for achieving this feat is with the use of marketing dashboards that includes customer performance scorecards, along with stakeholder-performance scorecards. For those unaware, marketing dashboards are a set of relevant external and internal measures assembled for not only synthesis but also interpretation. Through the input provided by these scorecards, organizations could use marketing dashboards to reflect on the company’s performance and to provide possible early signs of trouble that may be on the horizon.
Please note that a customer performance scorecard records how well the company is doing year after year on such customer-based measures as the percentage of new customers to average number of customers and the percentage of target market customers who have brand awareness, recall, etc. By incorporating customer performance scorecards, companies would have an effective method for understanding customer perceptions for products or services offered.
Unfortunately, the items listed above does not take into account how stakeholders view the organization, hence the need for implementing stakeholder-performance scorecards. A stakeholder-performance scorecard determines if various stakeholders, such as employees and bankers, are satisfy with the company’s performance. With stakeholder-performance scorecards, organizations could understand how a variety of stakeholders perceive the firm, including the goods the company provides. This is a crucial marketing analysis tool because most organizations depend heavily on stakeholders for carrying out company goals and objectives.
Although both types of scorecards provides organizations with valuable information pertaining to the company’s reputation, it does not provide the firm with other critical information relating to sales, revenues, and market share. To gather this particular info, companies could use sales analysis, including sales-variance analysis to measure sales relative to company goals and objectives. With sales-variance analysis, management measures the relative contribution of different factors to a gap in sales performance. For instance, organizations could use sales-variance analysis to determine if factors, such as territories, are the main contributor to why the company is failing to achieve its expected sales levels.
In addition, organizations could also use profitability analysis for measuring the company’s performance relating to profits. Many companies use profitability analysis tools, such as activity-based accounting, to calculate profitability of the various activities within the organization. To improve on profitability, managers can examine ways to reduce the resources required to perform various activities, or make the resources more productive or acquire them at a lower cost. Alternatively, management may raise prices on products that consume heavy amounts of support resources. With a profitability analysis, companies could ensure optimal use of company resources in an effort to become more profitable.
Personally, I believe that the two most important analysis for any business is the communication market analysis and the S.W.O.T.T. analysis. Reason being that both types of analysis will provide organizations with a holistic view of the firm’s overall marketing performance. For those who are unaware, a communication market analysis is the process of discovering the organization’s strengths and weaknesses in the area of marketing communication and combining that information with an analysis of opportunities and threats present in the firm’s internal and external environment. Through an effective communication market analysis, organizations could gather crucial information pertaining to five key areas:
To be successful in marketing, it is vital that organizations understand who their competitors and customers are, along with the opportunities available in an effort to create an effective marketing mix that would aid with positioning the product at the right target markets. To ensure that the product is effectively position, organizations must conduct distribution-channel analysis in an effort to determine the most efficient route for getting the firm’s goods to target markets. Doing so would enable the company to use the most effective distribution channels for delivering products or services to consumers. Please note that although an organization may determine effective distribution channels for delivering goods to target markets, other factors may influence the delivery of those goods. For instance, competition, including other threats could also hinder a company’s distribution of products or services. To ensure that organizations conduct the necessary research to understand the threats and competition a firm faces, it would also behoove the company to conduct a thorough S.W.O.T.T. analysis.
With a S.W.O.T.T. (strengths, weaknesses, opportunities, threats, and trends) analysis, organizations could evaluate the internal and external aspects of the company. For example, companies could use a S.W.O.T.T. analysis to measure internal factors, such as leadership and management, structure, or even the strategies and tactics set forth by the organization. As for external factors, it includes the global, economic, and competitive environment. Although a S.W.O.T.T. analysis has several advantages, one pitfall with this particular approach is the lack of weight, or points, associated with each area that would highlight its significance to the organization. For example, the organization may conclude that a longer list of strengths versus a shorter list of threats means that the company is doing well. When in fact, the threats are more significant than its strengths and because of this, the company is performing poorly. With this in mind, the goal is to use a S.W.O.T.T. analysis to determine the most effective marketing mix to incorporate for products or services offered in an effort to remain competitive, and to maximize on any available opportunities while minimizing on competition and other threats. For additional info, please visit the “Freebies” page at Success Pen Pal.
Remember, successful organizations understand where their performance is in relation to the competition. Some useful marketing analysis tools that would aid with measuring how well the company is doing versus their competitors is with the use of the following market analysis:
Overall Market Share – Company sales expressed as a percentage of total market sales.
Relative Market Share – Expressed as market share in relation to its largest competitor.
Served Market Share – Sales expressed as a percentage of total sales to its served market.
Through these measurement methods, companies could obtain crucial data letting them know the amount of market share gain, loss, and the potential for future market share within a particular industry. The goal is to use marketing analysis, including communication market analysis to remain competitive and to maximize on the available opportunities.
Zora Neale Hurston, a renowned writer and anthropologist, wisely stated that “research is formalized curiosity that is poking and prying with a purpose.” By continually keeping score and knowing thy markets, organizations could gain crucial market research analysis data that would assist with achieving the firm’s goals and objectives. If needed, companies could adapt their marketing strategies accordingly in an effort to achieve those goals and remain successful for years to come.
In the end, if you treat your business like any other successful major league sports franchise, you’ll ultimately end up winning because both share very similar strategies and tactics. That business success also requires keeping score, knowing your markets and competition, along with having the ability to not only take large educated risks but also to quickly adapt when necessary to win the game.