4.10 customer management(2)
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LectureMARK30143114MarketingMetricsFeb20241.pptxAndy Towse
Metrics for
Customer Management
Mark 3014/3114
Customer Management
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Introduction to metrics
Exploring metrics for CW2
Considerations for organisation’s
Today – metrics for Customer Management
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Why metrics – CW2 question
Required Structure:
Title Page (title of the report, student number, module name & code, tutor name, submission date, word count) (Title page is not weighted.)
1) THREE SMART Objectives, Digital Strategies and Marketing Metrics (1,300 words; 85 marks)
Based on your research and analysis in Coursework 1, you will identify THREE SMART objectives and recommend THREE digital strategies that will help your company build and develop profitable long-term relationships with their target customers. Then you will propose
ONE marketing metric for each objective to monitor and measure the success of your objectives (a total of THREE marketing metrics).
Each proposed digital strategy should be justified clearly with references to the business, industry, the chosen customer segment, the competition and market trends (such as evolving consumer behaviour and emerging technologies).
Excellent answers will propose digital strategies with references to owned, earned and paid media in the context of customer acquisition, retention, development, experience and engagement.
Having identified your marketing metrics, you should explain why that particular metric you have selected. You should also consider any drawbacks that your organisation may face in using those metrics in measuring their performance.
Each sub-section should be titled in relation to one customer lifecycle area, such as customer acquisition, retention, development, engagement etc.
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What is a ‘metric’ ?
‘Measuring system that quantifies a trend, dynamic or characteristic’ *
‘A number that measures something ; or multiple numbers that come together in one metrics ‘equation’ **
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* Farris, Bendle, Pfeifer, Reibstein (2010)
* * Hatcher (2015)
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What might ‘metrics’ tell us ?
‘Measuring system that quantifies a trend, dynamic or characteristic’ *
What’s going on … to manage performance (some call KPI’s) **
Count, track, monitor, communicate, take action **
Metrics enable effective performance management systems (objectives – strategy – plan – check – adjust) **
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* Farris, Bendle, Pfeifer, Reibstein (2010)
* * Hatcher (2015)
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What are customer management metrics ?
'Creating & keeping customers profitably’
(Kotler, 1997)
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‘CRM is a disciplined approach to managing the customer journey from the initial acquisition of a customer, so that customers becoming high - spending, profitable advocates, and that technology may or may not have a role in journey management’
Buttle, Francis, and Stan Maklan (2019)
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At its simplest level …
Metrics provide insight
What’s happening now (past & today)
Where is it heading
Is it going to plan (versus objectives)
What might the future scenario’s be
… taking the insight and asking ‘so what ?’
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Think forward - it’s the year 2026 You are the ‘Customer Manager’ for a brand, responsible for the customer lifecycle acquisition, retention and development. What will you be measuring at your monthly checkpoint session with your team ?
2 minutes
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(5) Customer Satisfaction Score CSAT
(1) Net Promoter Score NPS
‘Customer satisfaction is the customer’s fulfillment response to a customer experience, or some
part thereof’
‘How likely is it that you would recommend
[the brand]
to a friend or colleague’
CSAT
NPS
Typical CM Metrics
Buttle, Francis, and Stan Maklan (2019)
From core Buttle text
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(5) CSAT
‘’Customer satisfaction is the customer’s fulfillment response to a customer experience, or some part thereof’’
Overall CSAT measured at points in time, for your organization (email, online survey tool, social media)
Overall CSAT measured at points in time, for your organization compared to your competitors (syndicated/panel research, use external provider i.e. Ipsos)
CSAT for a touchpoint/experience, following that experience
Buttle, Francis, and Stan Maklan (2019)
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(1) Net Promoter Score NPS (advocacy)
“On a scale of 0-10, how likely is it that you would recommend a friend or colleague to our company?”
The Net Promoter Score (NPS) is the percentage of promoters minus the percentage of detractors. It’s a useful guide to how satisfied customers are – but not necessarily how loyal they are. It can also help to know how many fit into each category to give an indication of the depth of feeling.
| 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| Detractors | Neutral | Promoters |
https://hbr.org/2003/12/the-one-number-you-need-to-grow
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https://www.marketingweek.com/brands-excel-customer-experience-nps/
✅
❌
(1) Net Promoter Score NPS (industry categories)
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https://www.comparably.com/brands
| Brand | NPS Score | Trend (12m) |
| Apple | 52 | ? |
| 46 | ? | |
| Microsoft | 40 | ? |
| ….. | ||
| ….. | ||
| ….. |
Tech industry average
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https://www.qualtrics.com/uk/experience-management/customer/good-net-promoter-score/
Further NPS explanations:
(1) Net Promoter Score NPS (versus competitors)
(2) Customer acquisition cost +
(3) Customer lifetime value +
(4) CAC to CLV
CRM practitioners are concerned
with three performance indicators
for customer acquisition activities
How many customers are acquired
What is the cost per acquired customer
What is the value of the acquired customer over the longer term
‘Acquisition £ spending (marketing costs), divided by the number of customers acquired in a period of time’
’The present value of the future cash flows attributed to the customer relationship’
(2) Customer acquisition cost
(3) Customer lifetime value
Typical CM Metrics
Buttle and Maklan (2019)
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A supermarket could take the value of an average weekly shop and multiply that by the number of weeks / years – that the customer purchases for.
A family of four may spend £150 per week for 25-30 years until the children leave home.
Then they may continue to buy at a lower amount for another 20-30 years.
It is not unusual for this to work out at more than £500,000 over the lifetime of the family.
’The present value of the future cash flows attributed to the customer relationship’
(3) Customer lifetime value
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(7) Customer retention rate +
(8) Revenue churn
‘Customer retention is the number of customers doing business with a firm at the end of a financial year, expressed as a percentage of those who were active customers at the beginning of the year’
‘Value of revenue achieved from retained customers expressed as a percentage of the revenue achieved from all customers who were active customers at the beginning of the year’
Customer retention rate
Revenue churn
Typical CM Metrics
Buttle and Maklan (2019)
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(6) Customer effort score +
(9) First contact resolution +
(10) Average ticket time
‘Question/query or issue resolved at the first contact point with the service provided’
(10) Average ticket time
(9) First contact resolution
(6) Customer effort score
Typical CM Metrics
‘Customer effort score (CES) is a metric to show how much effort was required from customers to solve a problem and/or find information they're looking for’
‘Average ticket time looks at how long it takes for a customer's complaint, request, or question to be addressed accordingly’
https://offers.hubspot.com/thank-you/customer-service-metrics
Buttle and Maklan (2019)
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Metrics linked to customer lifecycle
Acquisition
Development
Retention
(2) Customer acquisition cost
(4) CAC to CLV
(3) Customer lifetime value
(5) Customer Satisfaction Score CSAT
(7) Customer retention rate
(8) Revenue churn
(6) Customer effort score
(9) First contact resolution
(10) Average ticket time
(1) Net Promoter Score NPS
Example overlay of CW2 metrics onto customer lifecycle
Typical CM Metrics
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For CW2, choose three metrics, one for each digital objective/strategy,
then explain why
Typical CM Metrics
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Organisations tend to choose metrics carefully …
‘Great news everyone, our Customer Lifetime Value trend is upwards … for customers recruited in January, their lifetime value score was £28,486 per customer, that’s up 7% on previous month’
‘Let me explain …’
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Choosing metrics often feels like peeling an onion
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Metrics linked to each customer engagement activity
Acquisition
Development
Retention
Example overlay of CW2 metrics onto customer lifecycle
A range of engagement channels are used, depending on the objectives and stage of the customer lifecycle
For example …
Search Engine Optimization (SEO)
Content Marketing
Social Media Marketing (paid and organic)
Paid Advertising
Email Marketing
Video Marketing
….
Each of these engagement channels will have metrics aligned to their activity to track effectiveness
… see next pages for examples
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Digital metrics – paid media, the organisations pays to reach customers …
| Activity examples | Metric/s examples* |
| Email (push) | Reach ; open rate ; click through ; enquire ; buy |
| SMS | Reach ; open rate ; direct response ; or click through ; buy |
| In app push notification | Reach ; open rate ; direct response ; click through ; buy |
| Paid advert (banner, display, web, in app, social media) | Reach, frequency of reach ; impressions ; share of voice ; ad to enquiry ratio ; ad to sales ratio |
| Paid search | Impressions on search engine page ; average position on search engine page ; user clicks ; click through rate (clicks/impressions) ; sales per click ; clicks per adword ; sales per adword |
| Organic search (no spend) | Average search position ; known keywords ; user click through ; click through by keyword ; sales per click |
| Overarching Metric/s* |
| Cost per click ; cost per thousand impressions ; cost per advertising generated sale ; cost per customer acquired |
| Advertising to sales ratio |
| Frequency (volume of times audience see’s your message over a given time period) |
| Share of voice (but tends to be across all advertising spend) |
* Hemann, C . and Burbary, K. (2014) ; Hatcher, A. [2015] ; Farris, P.W., Bendle, N.T., Pfeifer, P.E., and Reibstein, D.J. [2010]
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Digital metrics – owned media, organisation owns platform to reach customers
| Activity examples* | Metric/s examples* |
| Web pages/content | Page visits ; unique page visits ; bounce rates (single page view) ; time on page ; click through’s ; page exit rate (versus other pages) ; View or downloads (PDF, ebook etc) ; blog visits ; click on service functionality (Virtual assistants ; Q&A ; Webchat ; scan a QR code ; leave a message/contact us) ; cart abandonment rate ; enquiries generated ; sales ; cost per impression ; cost per click ; cost per sale |
| Mobile enabled web pages | |
| App | (In addition to above) views ; downloads ; app service usage ; usage frequency ; upsell |
| You Tube | Views, subscribers ; likes/dislikes |
| (Your) Facebook | Total likes ; reach for viewing posts ; reach for paid ad’s ; engaged users ; plus combination metrics |
| (Your) Twitter | Followers ; retweets ; replies ; click through on links |
| Organic search | On search engines - average ranking/position ; impressions ; clicks ; known keywords ; clicks by keywords ; sales enquiries by search engine ; sales enquiries by keywords |
* Hemann, C . and Burbary, K. (2014) ; Hatcher, A. [2015] ; Farris, P.W., Bendle, N.T., Pfeifer, P.E., and Reibstein, D.J. [2010]
Digital metrics – earned media, digital platform conversations that are taking place, that may be talking about your organisation
| Activity examples* | Metric/s examples* |
| Conversation volume Share of voice (one brand versus another) in total and voice tracks Share of conversation (% of conversation about your brand versus the industry or key competitors) Sentiment – positive ; neutral ; or negative ‘chatter’ about your brand Identified sentiment keywords (what are people saying …) Split by geography | |
| Flickr | |
| Customer feedback social sites (i.e. Reevoo) | Volume of reviews ; comparative review performance ; verbatim comments |
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Developing a framework for ‘metrics’ – key questions for organisations
What measures are appropriate to track the impact of customer management related activity ?
What key gaps are there in the information currently collected that prevent the measurement of customer management related activity, how should these gaps be filled, what is the priority ?
Which metrics are essential to tracking performance within core target segments/markets ?
Can the needs of consumers in the market be defined and prioritised, together with the metrics that will be appropriate to tracking performance against competitors in meeting these needs ?
Which key resources are necessary if customer management strategies are to be successful and how should the results of deploying them be measured ?
What are the appropriate actions that should be invested in to achieve objectives ?
Where can efficiencies be identified that will contribute towards improving the competitive position of the organisation, and how can the impact of these be measured ?
What should be an appropriate budget to achieve the goals set for customer management , and can we measure the benefit of investing in different activities ?
….. overall, what metrics would be appropriate in measuring the impact on achieving the business goals of the organisation ?
McDonald, M., Mouncey, P. and Maklan, S. (2014)
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References & further reading …
Farris, P.W., Bendle, N.T., Pfeifer, P.E., and Reibstein, D.J. [2010] Key marketing metrics: the 50+ metrics every manager needs to know. Harlow, Pearson
Hatcher, A. [2015] Metrics for Marketers. Cambs, Cambridge Marketing Press
Hemann, C . and Burbary, K. [2014] Digital marketing analytics: making sense of consumer data in a digital world . Indianapolis, QUE
Kotler, P. [1997] Marketing Management. Prentice Hall, New Jersey
McDonald, M., Mouncey, P. and Maklan, S. (2014) Marketing Value Metrics. 2nd Edition. London, Kogan Page
Buttle, F. and Maklan, S. [2019] Customer Relationship Management. Oxon, Routledge.
https://hbr.org/2003/12/the-one-number-you-need-to-grow (accessed 16 January 2023)
https://www.marketingweek.com/brands-excel-customer-experience-nps/. (accessed 16 January 2023)
https://www.comparably.com/brands (accessed 16 January 2023)
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