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Identification Of Promotion KPI

Mar 24, 2008
Promotion KPI or promotion key performance indicators are determiners of promotion efforts effectiveness. These are usually pre-determined by managers prior to the implementation stage to help them assess the effectiveness of all promotional activities undertaken.

In order to understand the concept of promotion KPI better, KPIs should be clearly defined. Key performance indicators (KPIs) are critical success factors for an organization. These measurements are quantifiable and can be regularly monitored. Just by looking at these factors, company executives would be able to tell if what they implemented was successful or otherwise. KPIs are highly dependent on the nature of the organization or department where they are applied.

The concept of promotion, on the other hand, is synonymous to marketing. In fact, promotion is one of the many subjects under the broad concept of marketing. It focuses on the dissemination of information about a brand, product, product line or company. Along with pricing, placement or distribution, and product, they make up a marketing mix which is essential in the implementation of any marketing-related activity or technique.

Typically, promotion is categorized into two groups which are above the line promotion and below the line promotion. The first category includes all advertisements and promotions done through such media as radio, newspapers, Internet and TV. In these promotional efforts, companies usually hire a third-party advertising agency to place these ads. Below the line promotion, on the other hand, are marketing efforts that are subtle enough to the extent that consumer is not aware of any promotion being done. Common examples of this are endorsements, sponsorships, and trade shows.

A typical promotional plan identifies the length or extent of promotional exposure desired depending on the media selected. It also specifies the budget allocated for promotional activities. In addition, this may also contain objectives of the activities undertaken like increases in sales, acceptance of new product, brand equity creation and positioning. Usually, the KPIs identified for evaluation are closely associated to the objectives of the activity. After all, a project is deemed a success when all objectives are attained. Nevertheless, a promotion KPI may vary from one promotional activity to another. For example, promotion done through the Internet can be evaluated through click through rate. On the other hand, promotion done through direct mail is measured through the number of mail responses.

For better monitoring of promotion KPI, various KPI-monitoring software tools have emerged. These software programs help collect data that are relevant and related to the critical success factors identified. Moreover, these bring convenience when it comes to accessing data needed to evaluate the effectiveness of all promotional activities implemented. With the large number of software packages available, choosing the most appropriate application has become a challenge for marketers and marketing managers. Generally, the software package that offers the most flexibility and most number of user options is considered the most superior among all available applications. With the use of appropriate KPI-monitoring software, it should be easier for managers to establish the link between promotional efforts and profit margins.
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