What’s Your Company’s
Measurable Marketing IQ?

As you read the following 10 questions, count the number of times you can answer “yes” versus “no,” then evaluate your “Measurable Marketing IQ.”

 

1. Do you know how much an average customer is worth the first time they purchase from you?
   
2. Do you know the retention percentage rate and average order of customers from their future purchases?
   
3. Do you know how many times each customer purchases from you during a one year period?
   
4. Do you know the sales value of your average customer after one year?
   
5. When determining customer value, do you include sales from related products, including products which may be sold from a different division or product group within your company?
   
6. Do you know your required response levels, by individual media, to meet your profit objectives?
   
7. Do you base decisions on the success of media or lists based on the long term value of the customer after one or more years?
   
8. Have you calculated every imaginable cost into your P&L? Costs like order processing, credit card fees, premiums, customer service, returns processing and overhead?
   
9. Do you “back-in” to your numbers by 1) assuming long-term value sales volume, 2) calculating every imaginable cost, 3) establishing profit requirements, 4) calculating your allowable marketing cost to acquire or retain a new customer, and 5) determining the required response rate percentage needed to “make your numbers”?
   
10. Do you convert your allowable marketing cost to acquire a new customer into the maximum cost per thousand for a direct mail, print, telemarketing or other media?

 

If you answered “Yes” to all 10, you are thoroughly measuring your marketing efforts.

 

If you answered “Yes” to 8 or 9, you are doing well, and with some fine tuning will remain competitive.

 

If you answered “Yes” to 6 or 7, you need to make additions to how you’re measuring your marketing activity.

 

If you answered “Yes” to 5 or fewer, you need to make measurable marketing mathematics a high priority and implement new approaches now to evaluate your marketing activity and maximize profitability.