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Unformatted text preview: Marketing Accounting Metrics The Balanced Scorecard Approach to Performance Evaluation 3. Customer outcome measures Customers image of company Customer satisfaction Customer retention Customer acquisition Customer profitability 1. Learning and change measures Corporate culture Change management Employee morale Employee retention 2. Key Internal Business process measures Process output/costs/waste/speed Process benchmarking Process mapping 4. Owner outcome measures Valuation of company Return on capital Cash flow Sales and profit growth , Rather than just focus on cost reduction and profits, management accounting best practice recommends control systems that measure all of the above drivers of customer satisfaction and shareholder value, and then set objectives, targets and planned initiatives for each measure. Very few companies employ such a comprehensive performance evaluation system but most are moving in the right direction. Source: Robert S. Kaplan and David P. Norton, The Balanced Scorecard , Harvard University Press, Boston, MA, 1996. Marketing is about customers, processes and profits. Marketing accounting is about measuring customer outcome metrics, key business processes metrics and key profitability metrics and then managing them all together with the help of a suite of Marketing Accounting metrics (MAmetrics) spreadsheets. The better the measurement, the better the management. The better the spreadsheet analysis, the better the management. The better the skill in measuring and managing marketing metrics, the better the manager. Peter R. Dickson Backbone Press 2009 Better measurement, better management 1. Marketing Accounting Metrics Marketing accounting metrics are measures of marketing performance such as customer satisfaction, customer acquisition, customer loyalty and retention, customer profitability, sales, costs, cash-flow, return on investment (ROI), return on assets employed (ROA) and shareholder value. They are measures that all managers should know about and be able to think about. The long established way of thinking about a competitive market in economics is a demand curve that intersects with a supply curve at an equilibrium price and quantity sold. This is all well and good, but it is just a little too simple and abstract for practicing managers. For instance, there are market demand metrics that determine the demand curve such as customer income, customer awareness, customer satisfaction, customer preferences, customer loyalty and customer purchases. There are also important metrics that determine supply such as number of suppliers, capacity, costs, productivity and profitability. Price equilibrates demand and supply and is therefore both a demand and a supply metric....
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