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The Metrics That Marketers Muddle

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market share, net promoter score, the value of a "like,"customer lifetime value, and return on investment. They conducted interviews with marketers and administered formal surveys to managers. They found that popular marketing metrics are regularly misunderstood and misused. The authors'goal is to encourage appropriate and consistent use of popular marketing metrics. Market Share: If the aim is to maximize the returns to shareholders, the authors argue, increased market share offers no benefit unless it eventually generates profits. Still, in a survey the authors conducted, they found that more marketing managers prioritized maximizing market share than prioritized maximizing profitability. Although, they note, companies with superior products tend to have high market share and high profitability, this does not necessarily mean that increasing market share will increase profits. Using market share as a metric of success simply because other marketers do it can be counterproductive. Net Promoter Score: Companies in a variety of industries have embraced net promoter score as a way to monitor their customer service operations. One of NPS's strongest selling points, the authors write, is its simplicity: It's easy for managers and employees to understand the goal of having more promoters and fewer detractors. However, they note weaknesses in how the theory has been presented to managers. Value of a "Like"The authors caution that managers shouldn't automatically assume that differences in value between social media fans and nonfans are caused by social media marketing activity. When there are differences, managers need to investigate 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 campaigns.
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