The most popular metric to help determine marketing strategy is satisfaction, according to research from the University of Technology Sydney (UTS) Business School.
The research team analyzed over 4384 managerial decisions from 1637 firms in 16 countries, including the US, UK, Australia, Russia, India and China.
Over half (53%) of the marketing mix decisions analyzed were based on customer satisfaction levels.
On average, managers used around nine metrics per marketing decision.
‘Awareness’ and ‘Return on Investment (ROI)’ were the other two most popular metrics – used in 45% and 43% of plans respectively.
‘Target Volume’, ‘Likeability’, and ‘Net Profit’ were other popular metrics.
UTS Business School lead researcher Dr Ofer Mintz said:
“Despite trillions spent on marketing globally, managers have said consistently over the last couple of decades that one of the most difficult activities is demonstrating the impact of their marketing actions.
“We wanted to know what metrics managers are using globally, what drives metric use, including cultural influences, and how many metrics managers are using. In today’s digital technology-intensive and data-rich environment, it is important for managers to know which metrics count.”
The researchers also found a significant and positive relationship between a company’s total metric and its marketing performance.
“We found the greater a manager’s overall use of quantitative information or metrics when making decisions, the better the performance, accuracy, and overall quality of decisions. It also leads to greater CEO satisfaction, and increased profits and shareholder value,” said Dr Mintz.
“Metrics provide information to help managers diagnose, coordinate, and monitor their actions. They also quantify trends or outcomes, reveal current relationships, and help predict the results of future actions,” he added.
The study identified differences in managerial metric use across different countries and organizational cultures.
“Rigid organisational cultures were less effective than more organic, free-flowing cultures where there was flexibility for managers to exchange ideas and choose their own metrics, rather than focusing on a strict set of instructions,” said Dr Mintz.
“It’s important for managers to understand the different drivers for metric use, both cultural and organisational. It is also useful to know what metrics other managers are using, and how many they are using, as it provides a benchmark for their own marketing-mix.”