Evaluating Success- Key Performance Metrics for Innovation and Marketing Strategies

Evaluating Success- Key Performance Metrics for Innovation and Marketing Strategies

Metrics are the numbers that give out valuable information about a process of interest in the organization. They give accurate measurements of the functioning of a process and provide a basis for improvement. It is a common saying that the moment one can express understanding in terms of figures, then their understanding is meaningful and satisfactory (Junene, 2016). One metric cannot suffice as a strategy that is good enough. For the metrics to be effective, a combination must be used. Some of the important functions of metrics in an organization are as follows:

Helps in getting feedback and enforcing control

Through analytic, the ideal state of a process can be decided and expressed in terms of metrics. This is so because the measurements take place on a daily basis. The philosophy of management believes that anything that gets measured gets managed (Junene, 2016). The metrics, therefore, help an organization decide whether a process is in excellent condition or needs external input. Therefore metrics is a basis for managing an organization.

Gives objective to processes

The processes in an organization are arrived at due to the quality requirements of the customers. Metrics, therefore, helps in transforming the needs of the customers, that are sometimes vague, to meaningful numbers which can be used to map the efficiency of a process. Therefore the metrics give insight into whether or not the requirements of the customers need to be improved.

Goals of improvement

Improvement goals must be measured in terms of numbers to make them objective. Words such as “acceptable quality,” “bad quality,” and “good quality” are vague and can only depend on the varying personal opinions of people (Junene, 2016). The metrics, therefore, have an essential task because they transform the requirements of the customers and the operation performance to comparable numbers. Consequently, the management can state with certainty that the customer’s needs have been met.

Metrics for Measuring Innovation

To drive behavior and evaluate the results of a specific initiative, a metric can be an important innovation lever. Google, for example, has had metrics for innovation for many years. One of the most notable ones is that 10 percent of the employees’ time should be focused on new opportunity experimentation. There is no right answer for how to measure such things as innovation in an organization (Kaplan, n.d.). Creating metrics for innovation is does not end when the new measures are defined and communicated. It also requires an approach that is strategic and disciplined which starts with the growth strategy of the enterprise and goes to each business unit. Some of the approaches for managing innovation are as follows:

Planning

The key stakeholders must participate in the identification of the metrics to prevent the possibility of assumptions making the sources of value clear and explicit.

Monitoring

This involves tracking metrics against the goals of the business to determine whether or not there is progress. It also helps in proposing the adjustments that need to be made to the strategies and measures.

Learning

This is a feedback loop that is continuous and helps in the assessment of progress. It is also a major factor in the identification of stakeholders to identify new opportunities and implications for supporting the goals that are metric-driven.

The metrics that can be used to measure innovation are described below:

Return on Investment Metrics

This metric addresses two measures, the financial returns, and the resource investments. ROI metrics ensures an organization has discipline and enables the justification of the and the value of the investment in innovation (Kaplan, n.d.).

Organizational Capability Metrics

These metrics concentrate on the process and infrastructure of innovation. The measures of capability give a focus that has the aims for creating approaches that are sustainable and repeatable for invention and reinvention.

Leadership Metrics

These address the behavior of the senior most management and leadership. The top management must be able to show support for the culture of innovation (Kaplan, n.d.). This also includes the support of growth initiatives that are specific to a particular process.

Cost Savings

This metric measures the efficiency of innovation processes. The innovation should not strain more resource but should save the costs by introducing efficient ways of doing things.

Productivity Level

The productivity level of innovation must be measured to determine its feasibility. Some of the measures involve ideal volume, level of engagement and the number for projects launched (Husk, 2017). An innovation should be able to be more productive otherwise it will only use more resources without returns.

Metrics for Measuring Marketing

Revenue

This metric looks at how much each marketing channel has generated. It gives a more objective way of identifying the channels that are most effective. The benefit of this is the justification of continued investment in the successful channels and helps in rerouting funds from the other channels that are ineffective to try out different tactics.

Cost per lead

This should not be used as a general figure, instead, it should be filtered down to determine the cost per lead for each of the channels to fish out the ones that are most cost-effective. It is, however, unwise to cut back a channel just because it has more costs per lead. It might be that the customers from that channel spend more compared to the others that are less costly (Williams, 2016).

Website traffic and the lead ratio

The number of unique visitors and the page views might look informative in a report, but they do not give valuable information. The aspect of metrics should come up when looking to find out where the visitors are coming from, (for instance referrals, direct), what they do when they land on your website and the number of the visitors that are being converted to customers and leads.

Landing Page Conversion Rate.

These metrics help in the establishment of content on the landing page that is enticing to the customers. The content can be changed periodically to determine what clicks, perhaps something is wrong with the offer, or the layout and wording can be improved (Williams, 2016). Or maybe the download button needs to be more visible and obvious.

Customer lifetime value and churn rate

It is well and good to know the number of customers you have. But it is more important to know how often they buy and for how long they remain a customer. In the case that a business is losing customers or customers are only making single purchases, then the business needs to work on the post-purchase nurturing (Williams, 2016). Marketing is more than just giving customers information or leads.

Recommendation

For my organization I would recommend the following metrics:

ROI metrics, cost-saving metrics, productivity metrics, revenue, cost per lead and the customer lifetime value and churn rate. My reason for choosing these metrics is that they are exhaustive and significant for any organization, irrespective of size. These metrics measure the different categories of metrics, such as operational and financial metrics. Having business metrics gives accurate measurement of the functioning of a process and gives a basis for improvement

References

Junene, P. (2016). What are Metrics, and Why are they Important? Retrieved from https://www.managementstudyguide.com/need-for-operational-definition-of-metrics.htm

Kaplan, S. (n.d.) Measuring Innovation to Drive Business Growth.

Husk, S. (2017). The Four Types of Innovation Metrics. Retrieved from https://www.imaginatik.com/the-four-types-of-innovation-metrics/

Williams, R. (2016). 5 essential marketing metrics you should be measuring. Retrieved from https://www.articulatemarketing.com/blog/5-essential-marketing-metrics

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This assignment will assess the performance metrics that can be used to evaluate the success of innovation and marketing. The assessment must include:

Discuss the importance of metrics

Discuss/assess at least five metrics to measure innovation

Discuss/assess at least five metrics to measure marketing strategy

Recommend the appropriate metrics to use for your company