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The Ultimate Measure of Marketing Success

measure resultsWhile many metrics help marketers determine the success of things like messaging, lead campaigns, and brand awareness there is one all-important metric that I believe, if captured, is the key to unraveling every marketing challenge that you face.

The measurement that matters over all others is something I’ve begun calling the Customer Success Quotient (CSQ). In math, a quotient is derived through division. In this case the two numbers or concepts that I want to suggest we measure and divide are 1) the value you create over 2) the cost the charge. The hope or course is that the answer is always a positive one. In other words, you bring more in results than you charge to create them.

I think most people would initially say they do, but I wonder. If you’re not focused on quantifying the results you create with your customers, it’s hard to be certain they are actually receiving or appreciating them.

From a practical standpoint, I believe using and communicating the CSQ as a key marketing indicator in your business does some very powerful things long-term.

1) It helps your customers understand the value they are actually receiving. Nothing resells a customer and stimulates referrals like cold hard results. Sometimes our customers have short memories, by routinely demonstrating and quantifying the value they receive you keep results top of mind.

2) It helps you and your staff focus on the one thing that really matters – your customer’s results. If every transaction and engagement has a built in results meter, you can bet people will stay focused on driving the needle as high as possible.

3) It creates a wonderfully compelling marketing story (assuming results are high). When you can capture and communicate specific results achieved on behalf of your customers, you can offer prospects the kind of proof they need to purchase confidently.

4) It creates the case for dramatically increasing what your charge for your products and services. When you can align the true value of what you do with what you charge then you will unlock the secret to tremendous profits. In fact, this is the key to boldly exploring “fee for results” pricing that can open the door to an entirely new business model for you.

In Bob Burg’s wonderful book the Go-Giver he introduces several laws of business. The first is the Law of Value – Give more value than you cost. While I agree wholeheartedly with this notion there’s no reason that quotient can’t be a set percentage of 1:1

Every industry and business has to approach this measurement differently and there are certain types of businesses, such as consultants, that can more naturally dive into this way of thinking. The key is to create systems and processes that you know can deliver results, enter only into engagements with customers who value your approach, and set the expectation and process up front for measuring and reporting the results that are achieved and you will capture the ultimate measure of marketing success.

Photo credit: mason bryant

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  • http://www.facebook.com/people/James-Hipkin/582946443 James Hipkin

    I often tell clients and write about the importance of creating value beyond functional benefits. I call it relationship equity and it's what changes a product with a name into a brand.

    When relationship equity exists you have some degree of competitive insulation. All things being equal or even a little less than equal your customer still selects you. When something goes wrong, they give you a second chance.

    Important stuff CSQ.

  • http://www.business901.com Josep T. Dager

    I like the terminology, John and the way you derive the CSQ.

    Many people are always skeptical of starting something like this not seeing a “value” to it. But if you can establish a baseline and improve on the number that is the importance of doing it.

  • http://www.iangilyeat.com EH

    John, you always write quality posts. I agree with you. You need to provide *more* value to the customers than what they are paying for, but it doesn't always need to come in the actual product they receive. The value can be added by the customer service they receive while going through the buying process. I know that is the top reason for me to give a company repeat business. Once again, great post!

  • http://www.onesherpa.com Andee Sellman, One Sherpa

    Hi John,
    Thanks for another valuable tool in deciding if your marketing is working. I found it a really easy concept given I'm from a non marketing background

  • http://randallbeard.wordpress.com/ Randall Beard

    John, I'm a huge believer in changing organizational cultures from “marketing is a cost” to “marketing is an investment,” consistent with your CSQ metric idea. Having said this, I'm skeptical that there will ever be a single marketing metric that is above all others. In my experience, you need a combination of 3 metrics–marketing efficiency, brand image and customer satisfaction, and ROMI metrics. All three are applicable in different situations and for different initiatives. I can't imagine that a single metric will always work for everything. There are consumers today who are still buying Charmin because of Mr Whipple ads from 25 years ago–how do you measure this ? Probably with more than one metric.
    Randall Beard
    http://randallbeard.wordpress.com/

  • http://www.more-for-small-business.com/ Kris Bovay

    Hi John: Do you have any examples of companies measuring CSQ and the metrics they put in place? I like the sound of it – I'd just like to see/hear some live examples. Thanks.

  • http://www.vistasad.com/ atul chatterjee

    How do you measure value that a customer is receiving? Measuring the divisor is obvious not the numerator. An example or two would have clarified the argument to slow visitors like me. Thanks

  • arturocoto

    Good post John. The cost / price should be straightforward. What do you suggest one uses for value? It would seem that it would have to be sales / revenue? Also, how do you account for time? Is the quotient a rolling average?

    Lastly, how is this different from ROI (return on investment). It seems that ROI is the standard “value” measurement in business.

  • http://gadgettechblog.com/ Gadget_Blog

    Very very interesting post..I like this one. gotta bookmark this one.

    Cheers,
    gadgettechblog.com

  • http://gadgettechblog.com/ Gadget_Blog

    Very very interesting post..I like this one. gotta bookmark this one.

    Cheers,
    gadgettechblog.com