When we talk about business productivity and its quantification, regardless of the area of business activity, the term “productivity indicators” comes to light as a key element to optimize the entire system. In this post we will explain what exactly they are and how they are used in the field of marketing.
What are the productivity indicators in a company?
They are indicators, through which you can measure the level of productivity that a company has in general or in more specific fields such as by person, department, area or line of business in particular. Each indicator has its own characteristics that make it behave in a unique way, so it is important to know how to appreciate and value each of them properly in terms of growth, optimal levels, possible stagnations and optimization limits. In addition, on many occasions, and especially in large corporations, the same indicator can be affected by the activity of different work groups or people, so that in the face of any change, a real analysis of causes and consequences will be necessary to detect the precise reason for the change. change, whether for the better or for the worse.
Therefore, the main reasons to use productivity indicators in a company are:
- Measurement of productivity of employees, teams and processes.
- Acquisition of the intelligence and information necessary for greater effectiveness in decision-making.
- Verification that the work carried out is aligned with the strategic objectives of the organization.
- Review of the profitability of workers and work teams as they are arranged.
- Quick action to correct any ups and downs and optimize the daily work of a company.
- Research on internal work processes to improve them, replicate them, introduce changes and measure the results of implementing said modifications.
- Management of people and teams more effectively, balancing workloads.
- Find out if a project or product is profitable or not by comparing salaries, investment of time and price of the product or project budget.
In recent times there has been a long talk about the KPI (key performance indicator) which is another term with which reference is made to the measurement of the performance, availability, yield and quality of the productive process of the companies, as well as the equipment and resources, with the ultimate goal of controlling their efficiency.
KPIs must be SMART, that is:
- Specific (specific)
- measurable (measurable)
- achievable (attainable)
- Relevant (relevant)
- Timely (temporary)
What are the most common productivity indicators in the field of marketing?
Depending on what type of company we are in (agency or brand), if we have external collaborators (marketing consultants), the type of product we sell (product or service), the distribution system (our own physical or online store, other distributors…), and above all, the marketing team that we have (more or less extensive), the productivity indicators to take into account will be different.
Still, below we show you examples of productivity indicators that can be taken into account in a marketing project or in a department in this area:
- ROI: Discover how to calculate it in our post entitled What is ROI in marketing?
- PRODUCTIVITY: When the objective is to measure a process with respect to time and labor invested, it can be calculated by dividing the production by the hours invested, obtaining as a result the amount of product produced per hour invested.
- CUSTOMER SATISFACTION: To measure the relationship between the number of customers expressing some disagreement and the total number of customers served in a period of time, we will have to calculate it by dividing the total number of customers with complaints by the total number of customers served and multiplying it by 100 to obtain the percentage of complaints compared to simple queries.
- RETENTION RATE: Number of retained clients divided by number of clients in the period.
- MARKET SHARE: It is the proportion of the market that consumes the products or services of a certain company. For example, if your company sells soft drinks, it would be the percentage of people who buy your brand of soft drinks instead of the competition’s. To calculate it, you must divide the total sales made by your company in a period of time between the total sales of the market and multiply it by 100.
- ACQUISITION RATE: It is used to know the number of new customers in a given period of time. It is calculated by dividing the number of new customers in a period by the number of total customers in that same period and multiplying it by 100 to determine the percentage.
- CONVERSION RATE: It consists of knowing what number of customers who were interested in the product at first, finally ended up buying it. It is calculated by multiplying the number of new customers between the requests for product information and multiplying it by 100.
- BRAND RECOGNITION: There are different models and methods for assessing brand recognition by the market (Interbrand Model, Brand Asset Valuator (BAV) Model, Branddoctors Model and Value Sales Ratio Model), but if what you are looking for is a clear and We recommend that you divide the units sold of the brand by the units sold of that category and multiply it by 100.
- EFFICIENCY PER CLIENT: Previous expenses per client between final and real expenses for customer acquisition.
- EFFICIENCY PER CUSTOMER: Expected benefit per customer and actual benefit after customer acquisition.
- PROFITABILITY PER CLIENT: Profit obtained per client divided by investment for customer acquisition.
- MARKETING DEPARTMENT PROFITABILITY: Department maintenance costs (salaries, equipment, facilities…) plus the investment made among the results obtained. Taking these factors into account, the ideal is to achieve the equilibrium point from which there is a team that gets the maximum return on investment to obtain the best results.
- AGENCY SUBCONTRACTING PROFITABILITY: We multiply the agency’s monthly feed by the 12 months (or as applicable) of contracting, to which we will add other investments that may be requested (for example, for advertising) and divide it by the results obtained.
- EFFICIENCY OF MARKETING ACTIONS: We add all the costs associated with the action and divide them between the results obtained to find out what its profitability has been and to be able to compare it with other actions.
These are just some of the productivity indicators in a company applied to the marketing area. There are many others, and even more since a large part of the marketing strategy is focused on the online environment where the metrics multiply to unsuspected limits. In Google Analytics and in each of the social networks where a brand is present, we have endless metrics to consider. The important thing is to properly analyze which are those that fit the goal we pursue and specific objectives to take them into consideration.
The ideal is to create a dashboard with all these metrics and not lose sight of them to be able to adapt the investment and marketing strategy at the moment, and in this way, optimize the results that we can obtain.