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The writing on the wall, sometimes referred to as the handwriting on the wall, is an expression of doom or misfortune. This expression originated out of the biblical book of Daniel where the supernatural writing foretold the demise of the Babylonian Empire. This phrase is widely used when warnings are clear, but one fails to take action. For example, when a company tracks the market size, market growth, market potential, and market coverage to determine what lead generation avenues should take place and then fails to track lead conversions and measure – they should beware! The writing may be on the wall! This does not have to happen if key marketing indicators have been put in place and measured along every marketing journey step.

Getting Started is About the Process

A great way to look at the key marketing indicators is to understand whether your marketing strategy is working or not. Evaluate the sales revenue in relation to the key marketing indicators listed below. If sales are up, it is working. If sales are down, it is not.

These indicators are the financial and non-financial measures or metrics used to help a business define and evaluate how successful it is. These are great indicators to measure the long-term company goals. Performance indicators such as these differ from business drivers and goals. While a school may consider the failure rate of its students as a key marketing indicator that
may help the school understand its position in the educational community, a business may consider the percentage of income from return customers as a potential key marketing indicator to measure. When putting something like this in place, it is necessary for a company at least to identify the key environments for the key strategic indicators, which are:

1.   Having a predefined business plan or process

2.   Knowing the requirements for the business plan or processes

3.   Having a quantitative and qualitative measurement of the results and comparing with
set goals

4.   Investigating variances and tweaking processes or resources to achieve short-term goals

Some example key marketing indicators could be:

•     Customer-related numbers:
               - New customers acquired
               - Status of existing customers
               - Customer attrition
•     Turnover generated by known and evaluated marketing segments of the customers – these could also be demographic filters
•     Outstanding balances held by marketing segments of customers and established terms of payment – these could be demographic filters
•     Collection of bad debts within value-based customer relationships
•     Demographic analysis of individuals (potential customers) filling out applications to become customers, and levels of approval, rejections, and pending numbers
•     Delinquency analysis of account receivables
•     Profitability of customers by demographic segments – segmentation of customers by profitability

Categorizing key marketing indicators (also known as key performance indicators) can prove expensive or difficult for some companies. For example, staff morale is difficult or near impossible to quantify. Often a business will research another business with a similar background and use the information as a benchmark to compare targets or standards to measure against. Some well-defined indicators listed on the previous page may be then summarized and put into subcategories.

•     Quantitative indicators – presented as a number or statistic

•     Practical indicators – interface with existing company plans and processes

•     Directional indicators – specify if the company is getting better or not

•     Actionable indicators – the ability of a company to control or affect change

•     Financial indicators – performance measurements used when looking at financial data

Another example of some more defined key marketing indicators:

Market Size: Target market population
Market Growth: Target market changes
Market Potential: Business available from the Target Market with a maximum dollar value.
Market Coverage: Effective marketing activites that reach the Target Market.
Lead Generation: Quantity of motivated potential buying customers and the % of Target Market.
Lead Conversion: Quantity and the % of leads converted to sales.
Market Share: Market share of business in the Target Market.
Average Sales: The dollar amount of each average sale.
 
To be effective in the marketing strategy research, measure this information monthly and commit to consistency. Doing this more often may skew the information. There are too many daily variances to get a clear picture and understanding of the underlying dynamics of your market and business practices if you look at the information on a daily or weekly basis.

Monitoring the information above will tell you what is and is not working in the marketing strategy. You will know if the market is growing or decreasing and discover how much business is out there for you and the competitors. You will know if the advertising and other integrated marketing communications are bringing in sufficient numbers of qualified leads for potential buying customers. You will be able to determine if the market coverage needs to be increased or not and if your salespeople are effectively converting leads into customers. You will understand the trends of the business and will be able to spot areas that need more attention.

DJ Heckes, Author & CEO
EXHIB-IT! Tradeshow Marketing Experts
www.exhib-it.com
Full BRAIN Marketing
www.fullbrainmarketing.com