The Metrics That Marketers Muddle Harvard Case Solution & Analysis

A huge challenge for promotion is demonstrating its business value. Some see marketing's sway as dropping as the finance function becomes more strong within businesses. One important reason is the issue of measuring its impact. The writers assess five popular marketing metrics: market share, net promoter score, the value of a "like," customer lifetime value, and return on investment. They administered formal surveys to managers and ran interviews with marketers. They found that popular advertising metrics are often misunderstood and misused. The author’s goal is to support appropriate and consistent use of advertising metrics that are popular.

Market Share: The writers argue, if the objective is really to maximize the returns to shareholders, increased market share offers no benefit unless it eventually generates profits. However, in a survey the writers ran, they found that more marketing managers prioritized maximizing market share than maximizing profitability that was prioritized. Although, they note, businesses with exceptional products often have high market share and high profitability, this does not necessarily mean that increasing market share will increase gains. Net Promoter Score: Businesses in a variety of sectors have embraced net promoter score as a means to track their customer service businesses. One of NPS's strongest selling point, the authors write, is its straightforwardness: It's not difficult for employees and supervisors to understand the goal of having more promoters and fewer detractors. Nevertheless, they note weaknesses in the theory was presented to managers. Value of a "Like" the authors warn that managers should not automatically assume that differences in value between social media fans and nonfans are caused by societal media marketing activity. When there are differences, managers should inquire whether they existed prior to the social media marketing effort. Customer Lifetime Value: Marketers often use CLV to help them decide whom to target in acquisition efforts. The writers recommend basing CLV on the value of the customer relationship - not the value of the customer relationship minus the acquisition prices. Return on Investment: Though ROI may not be a metric that is perfect, the authors concede, it can facilitate communication with nonmarketing colleagues. In order to compute ROI, there must be a yield (gain associated with an investment) and an investment. You CAn't calculate ROI unless you've both.

The Metrics That Marketers Muddle case study solution

PUBLICATION DATE: April 01, 2016 PRODUCT #: SMR551-HCB-ENG

This is just an excerpt. This case is about SALES & MARKETING

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