Marketing Metrics

MRMD

Group 1:
Karan Mirchandani – pg21karan.Mirchandani@isbm.ac.in
Vinti Maheshwari – pg21vinti.maheshwari@isbm.ac.in
Aditya Das – pg21aditya.das@isbm.ac.in
Aman Kumar Singh – pg21aman.singh@isbm.ac.in
Examples of the following are used to explain
the following metrics
• 1) Google
• 2) Vishal mart
• 3) Uncle cool
• 4) Classmate notebooks
Promotion
Metrics
Baseline Sales
• Purpose
 To determine sales of a company independent of marketing efforts in
a year

• Calculation
 Total Sales – Incremental Sales
Consider the following social media
marketing campaign as a basic project
example:
• Google have requested your business to design a social media campaign to
promote the release of a new product. You have a budget for the project,
and your objectives are to increase product sales and brand recognition.
Consequently, your project baseline might resemble this:
• Scope/deliverables: 500 direct sales
• Schedule: One month
• Cost: €1,000
• You must first list all the steps required in this project baseline example in
order to raise your conversion rate and reach the target of 500 sales. Plans
for social media posts on multiple platforms, including with copy and design
briefs, would be included.
• e.g., PPC fees for Facebook ads.
Incremental Sales
• Purpose
 To record the effectiveness of sales during marketing or promotional
events

• Calculation
 Total Sales – Baseline Sales
• Without using any advertising, a store- Vishal Mart anticipates selling
$50,000 worth of sports gear in a single month.
• The retailer conducts a $20,000 influencer campaign that generates
$80,000 in sales.
• The additional sales in this instance will total $30,000.
• Incremental sales = $80,000 – $50,000
= $30,000
Redemption Rates
• Purpose
 Highlights the usage of the coupon or rebate availed by consumers

• Calculation
 Coupon Redeemed/Coupon Distributed
Cost for Coupons & Rebates
• Purpose
 Necessary for budgeting of coupon expense

• Calculation
 Coupon Face Amount + Redemption Charges * Number of coupons
redeemed
• A small regional manufacturer of consumer packaged products- Uncle Cool
employs Yvette as its manager of analysis. In a small geographic area, her
product has a disproportionately large retail distribution. When her company
chooses to start a discount campaign, Yvette is tasked with monitoring its
progress. When her assistant examines the numbers, she discovers that only
5,000 of the 100,000 coupons published in the local newspaper were really
used to purchase goods. The assistant is thrilled to learn that this is a 5%
redemption rate, which is significantly greater than anything the business
has ever experienced.
• Yvette concludes that the vast majority of coupon use was by customers who
would have bought the product anyway. For most customers, the sole
impact of the coupon was to reduce the price of the product.
Pass-Through Rate
• Purpose
 Helps in recording the generation of consumer promotions through
trade promotions

• Calculation
 Promotional Discounts Provided by the Trade to Consumers /
Discounts Provided to the Trade by manufacturer * 100
Price Waterfall
• Purpose
 To access the actual price paid for a product, in comparison with the
list price

• Calculation
 List price – Discounts offered (each dis * probability of application)
• Each drop in price represents a drop in the “water level.” For example:
Classmate notebooks
Product & Portfolio Management
Metrics
Conjoint Utilities and Consumer
Preference
• Purpose
 To understand what customers want

• Calculation
 Conjoint Analysis:[Partworth of Attribute1 to Individual (I) * Attribute
Level (1)] [Partworth of Attribute2 to Individual (I) * Attribute Level
(2)] [Partworth of Attribute3 to Individual (I) * Attribute Level (3)]
etc.
Segmentation Using Conjoint Utilities
• Purpose
 To identify segments based on conjoint utilities.

• Calculation
 A technique that calculates the distances between customer and
forms groups by minimizing the differences within each group and
maximizing the differences between groups
Penetration
• Purpose
 Measuring the population who bought a product in the current period

• Calculation
 Users in the previous period*repeat rate for the current period + new
triers in the current period
(repeat rate = number of return customers / total number of
customers * 100)
Customer Profitability
Metrics
Customers, Recency, and Retention
• Purpose
 To monitor firm performance in attracting and retaining customers

• Calculation
 Recency: The length of time since a customer’s last purchase.
 Retention Rate: The ratio of the number of customers retained to the
number at risk
Customer Profit
• Purpose
 To identify the profitability of individual customers

• Calculation
 The difference between the revenues earned from and the costs
associated with the customer relationship during a specified period
Customer Lifetime Value
• Purpose
To assess the value of each customer

• Calculation
Retention Rate (%) / 1 + Discount Rate (%) – Retention Rate (%)
Prospect Lifetime Value Versus Customer
Value
• Purpose
 To account for the lifetime value of a newly acquired customer (CLV)
when making prospecting decisions

• Calculation
 Acquisition Rate (%) * {Initial Margin ($) + CLV ($)} – Acquisition
Spending
Average Acquisition Cost
• Purpose:
 To track the cost of acquiring new customers and to compare that
cost to the value of the newly acquired customers

• Calculation
 Ratio of acquisition spending to thr number of new customers
acquired
Average Retention Cost
• Purpose
 To monitor retention spending on a per-customer basis

• Calculation
 Ratio of retention spending to the number of customers retained