In marketing, only three metrics matter.
Updated: Jul 3, 2020
A marketer today has a lot of metrics to keep an eye on. The number is so large that it's complicated to prioritize. And there are new ones every day: every new digital platform comes with its statistics. Moreover, it is difficult to compare them. And admit it, sometimes they aren't clear. And how they all contribute to that one, all-encompassing metric, the sales result, is not always clear either. So we have a lot of buttons to press. And it's not clear exactly what each button does and how you can find out how hard you have to push it.
Only three metrics are important
New insights from psychology and neuroscience give us increasingly more understanding of how consumers interact with brands. And for once, more means better. What we learn about consumers today makes it simpler, more transparent, and more manageable.
Recent research has shown that there are only three metrics that matter in marketing. Three parameters are enough to steer the most important one, the sales figure. That seems too good to be true. And yet it is. Because these three parameters strongly correlate with market share. The average correlation, across all sectors, is 0.85. That's very solid (in some sectors, the correlation is higher -Banking: 0.91-, in others the correlation is lower -Food retail: 0.83-). In other words, the better you score on these three criteria, the better your market share will look. Beautifully simple.
Which three metrics?
The three parameters can be understood as three shortcuts. I'm making it a bit too simple now, but if our brains have to choose between brands, then the selection process goes very fast. It assumes that a brand is the right choice if it meets these three criteria:
1. Availability heuristics:
the name of the brand comes up when you think of a product or a problem.
This is what we call mental availability. The higher your score on mental availability, the more you appear on the list of consumers and the higher the chance that you will eventually be chosen.
2. Effect heuristic:
you have a good feeling about the brand.
Suppose you have to change your mobile internet subscription tomorrow. Which brands are coming to you now? And what do you think of these brands? Positive, negative, or neutral? The feeling differs per brand. The brain prefers the brand you feel comfortable with. The brand that you think negatively about loses. Whether your mind retains the neutral brand depends on whether there is a brand with a strong positive feeling.
3. Fluent heuristics:
the degree to which your brand is recognized.
This is about the extent to which you stand out from the other brands. If you are recognisable, the consumer knows what you can do for him or her. The more recognizable you are, the more familiar you feel, the more you are a safe choice.
How do you make them work for you?
The first question you have to answer is how you score on the three parameters. The second question is how they relate to each other; in other words, which button should be pressed the hardest. And the third question is how you can have each marketing discipline work together to increase your scores. Every experience at every touchpoint defines the result for your brand. All marketing disciplines must work aligned.
Marketing is finally simple again. There are three metrics to manage. If you do that well, you will increase your market share. But what do you do with all your other measurement data? Look at it from a different perspective. Ask yourself how they can help you strengthen your scores on the three most important parameters. You'll see that all the pieces of the puzzle suddenly fall together nicely.