• Theoretical Base
Marketing accountability and the measurement of marketing performance have long been reported as a significant challenge for marketing managers and management teams globally (Frosen et al., 2013). For instance, it has been reported that 80% of marketing executives surveyed are dissatisfied with their current ability to measure marketing performance (Chief Marketing Officer Survey, 2009) and 73% of companies surveyed have no key marketing metrics in place (Deloitte, 2014). Published in 2007, a survey from 209 marketing managers across Ireland indicated that Irish firms had even less well developed marketing performance assessment practices than those reported in Spain or UK (O’Sullivan, 2007). Marketing performance measurement has become even challenging due to the growing intensity in global competition and the increasing dynamics in business environment.
In addition, studies show that the use of multiple marketing metrics in management processes is beneficial to companies because marketing metrics provide information that is useful for organisational learning, inter-departmental collaboration, and decision making (Ahn, 2001; Verhoef & Leeflang, 2009). Therefore, an investigation into how firms should use different measures to monitor their marketing performance is warranted.
• Research Questions & method
By re-examining the marketing performance measurement practices in the Irish context, this paper aims to provide insights into
1) what key marketing metrics have been used by Irish firms,
2) how marketing performance measurement practices have changed in Irish firms from 2007 to 2015,
3) If marketing performance measurement practices influence marketing performance in Irish firms.
A quantitative research method was applied to address the research questions. A survey entitled “Marketing Performance Measurement Practices in Irish Firms” was sent to marketing managers all across Ireland in 2015. All the measures used in the survey were adopted from existing studies (e.g., Homburg et al., 2012; O’Sullivan, 2007). Tailored Research Method was used to collect survey data (Dillman, 2011). In addition, this paper applied a secondary research approach to investigate the trends in marketing performance measurement practices in Irish firms by comparing the current study with O’Sullivan (2007).
• Findings
Based on a survey of more than 200 marketers across different industries in Ireland, this study finds that the top ten most commonly used metrics include sales, profit/profitability, consumer satisfaction, brand awareness, market share, visitors, loyalty/retention, revenue of new products, return on investment and conversions (leads to sales). Moreover, a comparison between data collected in 2015 and that collected in 2007 shows that management teams still tend to attach more importance to financial metrics as reported in 2007, while the frequency of marketing performance tracking has been surprisingly reduced.
In addition, the independent T-test results show that firms that adopt comprehensive marketing performance measurement practices tend to perform better with regard to marketing capabilities, i.e., market-linking capability, marketing planning capability, implementation capability, market-linking capability, adaptive marketing capability, relationally focused organizational learning capability, and market focused organizational learning capability, and firm performance.
• Implications
Based on these findings, this paper argues that better performed firms tend to have more comprehensive marketing performance measurement practices in place (i.e., using a number of key marketing metrics that link with organisation strategy). Therefore, firms are recommended to use different set of marketing metrics (i.e., customer attitude metrics, customer behaviour metrics, trade customer metrics, competition metrics, financial metrics, innovation metrics, and digital metrics) to monitor the performance of their marketing activities. In addition, management teams can use comprehensive marketing performance information to enhance their firms’ marketing capabilities and skills. For instance, if firms use marketing performance information to identify problems and provide timely feedback regarding their customers, suppliers and partners, firms will react to the changing environment more quickly and even better than their competitors.
• Importance and Key Contributions
First, using secondary data collected in 2007 and primary data collected in 2015, this paper provides insights into how marketing performance measurement practices in Irish firms have changed from 2007 to 2015. Second, the positive associations between comprehensive marketing performance measurement practices and firm performance empirically support the argument that “the development of performance measurement practices should be included in any comprehensive program to improve marketing performance on the part of Irish firms” (O’Sullivan, 2007, p. 26). In addition, the results further provide insights into the ongoing discussion on how to develop the marketing performance of Irish firms by showing the positive role of marketing measurement practices in building up marketing capabilities and skills.
• References
Ahn, H. (2001). Applying the balanced scorecard concept: An experience report. Long Range Planning, 34(4), 441-461.
CMO Council (2009). Marketing outlook 2009: Setting the course for marketing strategy and spend. Available at http://www.cmocouncil.org.
Deloitte (2014). Survey on marketing effectiveness among Luxembourg companies: Room for reinforcement. Available at https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/strategy/lu-en-
marketingeffectivenesssurvey-08112013.pdf.
Dillman, D. A. (2011). Mail and Internet surveys: The tailored design method-2007 update with new Internet, visual, and mixed-mode guide. John Wiley & Sons.
Frösén, J., Henrikki, T., Matti J., & Antti, V. (2013). Marketing performance assessment systems and the business context. European Journal of Marketing, 47 (5/6): 715–737.
Homburg, C., Artz, M., & Wieseke, J. (2012). Marketing performance measurement systems: Does comprehensiveness really improve performance? Journal of Marketing, 76(3), 56-77.
O’Sullivan, D. (2007). The measurement of marketing performance in Irish Firms. Irish Marketing Review, 19(1&2), 26–36.
Verhoef, P. C, & Leeflang, P. (2009). Understanding the marketing department’s influence within the firm. Journal of Marketing Research, 73: 14–37.
