Metrics for Linking Marketing to Financial Performance

Abstract

Marketers have been inundated with performance measures that reflect the impact of their marketing expenditures. These measures often reflect impact with the customer
\nor the channel, such as awareness, preference, purchase intent, customer satisfaction and loyalty, share of requirements, shelf space, ACV (all commodity volume), and the like.
\nUnfortunately, these tend to be interim measures and do not reflect the financial impact on the firm. Marketers are being asked to translate marketing performance
\nmeasures into financial consequences. For example, what is a point of customer satisfaction worth? Pressure is being placed on marketing to justify expenditures and to
\ntranslate their measures into financial outcomes, which is the language used by the rest of the firm.
\nThis paper will explore methods to better link marketing expenditures to financial outcomes. In the process, we discuss both what we know about the linkage between
\nmarketing and financial outcomes as well as what remains to be uncovered.