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Measuring Marketing: 110+ Key Metrics Every Marketer Needs, 2nd Edition

ISBN: 978-1-118-15374-1
320 pages
February 2013
Measuring Marketing: 110+ Key Metrics Every Marketer Needs, 2nd Edition (111815374X) cover image


Evaluating marketing performance and decision making more fairly

Marketing has long been considered an art and not a science, but that perception is beginning to change as increasingly sophisticated methods of quantifying marketing success are developed. In Measuring Marketing: 103 Key Metrics Every Marketer Needs, Second Edition, one of the world's leading experts in the field presents the key marketing ratios and metrics. Applying these metrics will enable marketers to make better decisions and increase their accountability for their strategies and activities.

This fully revised and updated new edition discusses the key marketing metrics needed for successfully measuring the performance of an organization's marketing investments. CEOs and CFOs regularly ask for one simple way to assess the efficacy of marketing campaigns, but the fact is that there isn't one single measure of performance. Measuring Marketing helps marketers figure out what they can and should be measuring and when.

  • Marketers are increasingly being held accountable for the corporate bottom line, and this book helps both marketers, as well as the business leaders who employ them, to measure performance fairly and accurately
  • Measuring marketing success is difficult, but this book shows what and when to assess
  • Designed to increase accountability and improve everyday decisions, the book includes ratios illustrated with actual marketing cases from leading companies

The first book to address growing demands that marketers be accountable for their strategies and decisions, Measuring Marketing explains how to assess marketing success in more meaningful ways.

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Table of Contents

Acknowledgments xiii

Introduction xv


CHAPTER 1 Revenue 3

CHAPTER 2 Gross Profit 5

CHAPTER 3 Value-to-Volume Ratio 7

CHAPTER 4 Net Profit 9

CHAPTER 5 Earnings-Based Value 13

CHAPTER 6 Return on Sales 17

CHAPTER 7 Return on Assets 19

CHAPTER 8 Return on Equity 21


CHAPTER 9 Market Share 27

CHAPTER 10 Relative Market Share 29

CHAPTER 11 Market Growth 31

CHAPTER 12 Market Demand 33

CHAPTER 13 Market Penetration 35

CHAPTER 14 Program/Non-Program Ratio 41

CHAPTER 15 Program/Payroll Ratio 43

CHAPTER 16 Causal Forecast 45

CHAPTER 17 Time-Series Analysis 49


CHAPTER 18 Brand Equity 57

CHAPTER 19 Brand Scorecards 61

CHAPTER 20 Brand Premium 65

CHAPTER 21 Brand Contribution and Review Analysis 71


CHAPTER 22 Net Sales Contribution 79

CHAPTER 23 Time-Driven Activity-Based Costing 81

CHAPTER 24 Segment Profitability 83

CHAPTER 25 Customer Profitability 87

CHAPTER 26 Share of Customer 89

CHAPTER 27 Return on CustomerSM 91

CHAPTER 28 New Customer Gains 93

CHAPTER 29 Customer Acquisition Costs 95

CHAPTER 30 Cost per Lead 99

CHAPTER 31 Retention Rate 103

CHAPTER 32 Churn Rate 107

CHAPTER 33 Customer Losses 109

CHAPTER 34 Consumer Franchise 111

CHAPTER 35 Customer Equity and Customer Lifetime Value (CLTV) 115

CHAPTER 36 Customer Brand Value 119


CHAPTER 37 Usage 123

CHAPTER 38 New Product Purchase Rate 125

CHAPTER 39 Marketing Cost per Unit 129


CHAPTER 40 Price 133

CHAPTER 41 Markup Price 137

CHAPTER 42 Target Return Price 141

CHAPTER 43 Sales Price Variance 143

CHAPTER 44 Markdown Goods Percentage 147

CHAPTER 45 Profit Impact 149


CHAPTER 46 Share of Voice 155

CHAPTER 47 Recall 157

CHAPTER 48 Recognition 161

CHAPTER 49 Reach 163

CHAPTER 50 Frequency 165

CHAPTER 51 Gross Rating Points (GRP) 167

CHAPTER 52 Cost per Gross Rating Point (CPP) 171

CHAPTER 53 Response Rate 173

CHAPTER 54 Conversion Rate 175

CHAPTER 55 Advertising-to-Sales Ratio 177

CHAPTER 56 Promotion Profit 181


CHAPTER 57 Direct Marketing Revenue Goals 187

CHAPTER 58 Direct Marketing Profit Goals 191

CHAPTER 59 Direct Marketing Gross Profit 193

CHAPTER 60 Direct Marketing Net Profit 195

CHAPTER 61 Direct Marketing ROI 197


CHAPTER 62 Gross Page Impressions (or Gross Page Requests) 201

CHAPTER 63 Word of Mouth (WOM) 203

CHAPTER 64 Total Clicks 205

CHAPTER 65 Click-Through Rate (CTR) 207

CHAPTER 66 Cost per Click 209

CHAPTER 67 Cost per Action 211

CHAPTER 68 Pay per Lead 213

CHAPTER 69 Activity Ratio for Social Media 215

CHAPTER 70 Deductive Social Media ROI 217

CHAPTER 71 Resolution Time 219

CHAPTER 72 Social Media Profitability 221


CHAPTER 73 Cost per Sales Dollar 225

CHAPTER 74 Transactions per Customer 227

CHAPTER 75 Transactions per Hour 229

CHAPTER 76 Average Transaction Size 231

CHAPTER 77 Average Items per Transaction 233

CHAPTER 78 Hourly Customer Traffic 237

CHAPTER 79 Returns to Net Sales 239

CHAPTER 80 Inventory Turnover 241

CHAPTER 81 Percent Inventory Carrying Costs 243

CHAPTER 82 Gross Margin Return on Inventory Investment 245

CHAPTER 83 Sales per Square Foot 247

CHAPTER 84 Sales/Profits per Employee 249

CHAPTER 85 Retail Close Ratio 251

CHAPTER 86 Retailer’s Margin Percentage 253

CHAPTER 87 Percent Utilization of Discounts 255

CHAPTER 88 Shrinkage to Net Sales 257


CHAPTER 89 Net Sales Contribution 263

CHAPTER 90 Absolute Index (AI) 265

CHAPTER 91 Relative Index 267

CHAPTER 92 Percent of Sales 269

CHAPTER 93 Independent Sales Representative Analysis 273

CHAPTER 94 Turnover Rate 275

CHAPTER 95 Recruiting 279

CHAPTER 96 Breakdown Approach 281

CHAPTER 97 Workload Approach 285

CHAPTER 98 Sales Performance Quotas 289

CHAPTER 99 Average Sales per Call 295

CHAPTER 100 Close Process and Close Ratio 297

CHAPTER 101 Cost per Call 301

CHAPTER 102 Break-Even Sales Volume 303

CHAPTER 103 Sales Productivity 305

CHAPTER 104 Four Factor Model 307

CHAPTER 105 Sales Variance Analysis 309

CHAPTER 106 Sales Volume Variance 313

CHAPTER 107 Straight Salary 315

CHAPTER 108 Straight Commission Plans 319

CHAPTER 109 Profit-Based Commission 321

CHAPTER 110 Salary Plus Commission or Bonus 323

CHAPTER 111 Salary Plus Commission and Bonus 327

CHAPTER 112 Commission Plus Bonus 329

CHAPTER 113 Team Selling Compensation 331

About the Author 335

Index 337

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Author Information

John A. Davis is the author of several acclaimed marketing books: the first edition of this book; the first and second editions of The Olympic Games Effect; Competitive Success; Magic Numbers for Sales Management; and Magic Numbers for Consumer Marketing. He is a member of the marketing faculty at the Lundquist College of Business, University of Oregon, where he received the BAC Outstanding Teaching Award in 2012, and Chairman of Brand New View, an executive education and professional services firm. Previously, he was Dean of the Global MBA Program and Professor of Marketing at SP Jain, with campuses in Singapore, Dubai, and Sydney. In 2010, he was the recipient of the "Best Professor in Marketing" honor, awarded by CMO Asia and Asia's Best Business School Awards. Before SP Jain, he was department chair and professor of marketing at Emerson College, and professor of marketing practice at Singapore Management University, where he received the "Most Inspiring Teacher" award and Dean's Teaching Honors. John regularly consults with leading global companies and is a sought-after conference speaker. He has also founded two award-winning companies and has led marketing teams at Nike, Informix, and Transamerica. He received his MBA from Columbia University and his BA from Stanford University.

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