Marketing and Innovation Metrics
Introduction
Metrics are a crucial levers of innovation which assist in evaluating the results of a specified approach or initiative while assisting in the implementation of a desired behavior. Companies such as Google have had innovation metrics for decades with the most noteworthy being that Google’s employees can take ten percent of their time to carry out personal experimentations. In essence, the contemporary market place encompasses a dynamic and a competitive environment hence necessitating the need for organizations to go an extra mile in their operations so as to ensure that they have a competitive advantage over their competitors. One such approach entails implementing effective performance metrics that can be used to evaluate the success of innovation and marketing (Kim, 2014). Such metrics are discussed as follows.
Discussion
The importance of metrics
Metrics refer to numbers or relevant information that shows crucial information about a process. They give accurate measurements on the process’s development and provides a base for suggestion of improvements. Metrics encompass several benefits for an organization. First, they make an organization’s process to be objective. In this case, processes are designed with respect to quality requirements with metrics being used to transform vague requirements into numbers that can be used to accurately measure process efficiency. Secondly, metrics help in improving goals. For the goals improvement to be objective, it is imperative that they be measured in numbers. For this point, metrics play a crucial role in transforming both operational performance and customer requirements to numbers for effective comparison, an aspect which gives the management an opportunity to ascertain whether goals are being met objectively (Morris & InnovationLabs, 2008). Lastly, metrics can be used to accurately describe a desired condition. In this case, metrics help in describing a condition in a given process. For example, in a mobile phone manufacturing factory, the number of phones being manufactured per day can be perceived as a measure of how efficient the manufacturing line is.
Five metrics to measure innovation
Number of ideas generated. This is a metric which encompasses counting the number of relevant ideas which have been generated over a given period of time. Innovation encompasses coming up with ground breaking ideas and implementing them effectively. As such, idea generation should be taken with absolute seriousness hence the necessity of counting the ideas which are generated at a given period of time as shown by Sabadka, (2012). This gives a quantifiable aspect of the idea-generation and can be used for comparison purposes to check the direction taken by an organization.
Resources allocated to innovation. This metric takes into consideration the various resources which are used for innovation purposes. Resources in this case entail both the human resources and the funds that are utilized for innovation purposes. In scenarios whereby there is high utilization of resources, then the company can be said to be involved in innovation activities (Oman et al, 2013). The converse is also true since less utilization of resources shows that the company is not involved in innovation activities.
The number of ideas that are approved and implemented. Since a metric system is concerned about numbers, taking into consideration the number of the ideas that are implemented is an effective measurement approach (Kim, 2014). High implemented ideas shows that a company is experiencing positive growth in innovation. On the other hand, a low number of the ideas that have been implemented for a given time should be a point of concern for an organization.
Number of new products/services launched. Implemented ideas should result in a new way of doing things or an introduction of services or products. In a situation whereby there is a high success rate of turning ideas into end products, then it can be said that there is positive innovation. Therefore, counting the number of products launched as a result of an organization’s innovations is an effective metric. As such, having numerous ideas but getting to launch very few new products/services should be a point of concern for an organization.
ROI on innovation spend. This is an efficient metric which measures the returns brought by the innovation activities. It’s a calculation which asses the amount spend on innovation activities and the amounts gotten from the products of the innovation. A positive ROI shows that the proceedings from the innovation activities are more than the cost of innovation. On the other hand, a negative ROI shows that the cost of implementation outweighs the benefits.
Five metrics to measure marketing strategy
Resources allocated to marketing. This metric takes into consideration the various resources which are used for marketing purposes. Resources in this case entail both the human resources and the funds that are utilized for marketing. The more the resources, the more the marketing magnitude.
Traffic metric. This is a metric which measures the amount of traffic that is brought about by the marketing. The metric is mostly used for internet based marketing which encompasses bringing more activity to a certain page (Hassini, Surti & Searcy, 2012). The more the number of visitors, the higher the chances of making more sales.
ROI on marketing expenditure. This is an efficient metric which measures the returns brought by the marketing activities. It’s a calculation which asses the amount spend on marketing activities and the amounts gotten from sales as a result of the marketing activities (Khang, Ki & Ye, 2012). A positive ROI shows that the proceedings from the marketing activities are more than the cost incurred.
Conversion metric. This is a metric which takes into consideration the number of responses that a marketing campaign elicits and the number of the responses that are converted into actual sales. In this case, the objectivity of a marketing activities encompasses measuring the actual sales that it brings.
Sales metrics. In most cases, the main objective of engaging in marketing activities is to increase the number of sales (Gopal & Thakkar, 2012). As such, measuring the sales meant after a marketing campaign can be used as metric to measure the effectiveness of the campaign.
Conclusion
Utilizing a metric system is a sure way of ascertaining the direction in which an organization is moving. Both marketing and innovation activities encompass the use of funds for them to be implemented. As such, it is prudent to measure whether their implementation satisfies the goals of the concerned organization. For my organization’s innovation metrics, I would recommend using number of new products/services launched and ROI on innovation spend since they show whether the company is gaining from the innovation or not. For marketing metrics, I would recommend the use of ROI on marketing expenditure conversion metric since they show the effectiveness of marketing campaigns.
References
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Hassini, E., Surti, C., & Searcy, C. (2012). A literature review and a case study of sustainable supply chains with a focus on metrics. International Journal of Production Economics, 140(1), 69-82. http://www.sciencedirect.com/science/article/pii/S0925527312000576
Khang, H., Ki, E. J., & Ye, L. (2012). Social media research in advertising, communication, marketing, and public relations, 1997–2010. Journalism & Mass Communication Quarterly, 89(2), 279-298. http://journals.sagepub.com/doi/abs/10.1177/1077699012439853
Oman, S. K., Tumer, I. Y., Wood, K., & Seepersad, C. (2013). A comparison of creativity and innovation metrics and sample validation through in-class design projects. Research in Engineering Design, 24(1), 65-92. https://link.springer.com/article/10.1007/s00163-012-0138-9
Morris, L., & InnovationLabs, L. L. C. (2008). Innovation metrics. The Innovation Process and How to Measure it. An InnovationLabs LLC, 2. http://www.innovationlabs.com/Measuring_Innovation.pdf
Sabadka, D. (2012). Innovation potential metrics. Annals of the Faculty of Engineering Hunedoara, 10(3), 449. https://search.proquest.com/openview/30d77f77b7e0906357c4379fdfd3df50/1?pq-origsite=gscholar&cbl=616472
Kim, S. K. (2014). Explicit design of innovation performance metrics by using analytic hierarchy process expansion. International Journal of Mathematics and Mathematical Sciences, 2014. https://www.hindawi.com/journals/ijmms/2014/125950/abs/