The process includes the conceptual linking of marketing activities to intermediate marketing outcome metrics to cash flow drivers of the business, as well as the validation and causality characteristics of an ideal metric.
Cash flow both short-term and over time is the ultimate metric to which all activities of a business enterprise, including marketing, should be causally linked through the validation of intermediate marketing measures.
The process of validating the intermediate outcome measures against short-term and/or long-term cash flow drivers is necessary to facilitate forecasting and improvement in return. “Intermediate marketing outcomes” refer to measures such as sales volume, price premium, and market share.
MMAP Metric Catalog
The MMAP Metric Catalog is a listing of marketing metrics that provide detailed documentation regarding the psychometric properties of the measures and specific information with respect to reliability, validity, range of use, sensitivity – particularly in terms of validity and sensitivity with respect to financial criteria.
Most commercial providers offer little detail about their measures. Most of the publicly available information focuses on integrated suites of products and services with little technical information or reference to characteristics of specific measures that would allow profiling according to MMAP.
MASB has identified ten characteristics of an “ideal metric”:
- Relevant – addresses and specific pending action
- Predictive – accurately predicts outcome of pending action
- Objective – not subject to personal interpretation
- Calibrated – means the same across conditions, categories, and cultures
- Reliable – dependable and stable over time
- Sensitive – identifies meaningful differences in outcomes
- Simple – uncomplicated meaning and clear implications
- Causal – course of action leads to improvement
- Transparent – subject to independent audit
- Quality assured – formal and on-going processes to assure 1–9