For the last 25 years I have been blessed with having access to huge volumes of consumer data. It has meant I have been identifying gaps in marketing KPIs for a very long time and so the use of these KPIs comes naturally to me. I have also been lucky to work mainly with actual usage or purchase panel data; meaning I see what actually happens with the same people over time rather than snapshots of data, giving the ability to see trends and changes based on marketing stimulus.
Having recently started looking at the metrics being used in Digital Channels, it's clear that this is not true in the Digital space. Targeting is still very similar to the 1980's concepts of demographic and geographic segments despite, in theory, there being a significant increase in data.
The key to sharfe growth is, and always will be, penetration. The question is, how can I grow penetration?
More importantly the question is WHO can i grow penetration with? Who do I need to reach to grow Physical Availability in store and Mental availability via advertising?
Below is my take on a flow to get you from Share analysis to Campaign development. Remember, penetration as a metric (like all others) is somewhat determined by the time period you select. if it is reasonable to assume that your category is used 4 times a month (like Food Delivery), then a month is good place to start. However if you are a daily app, this would not make sense. Others might need a year to get real insight (Like Travel?)
1. Market Share KPIs - Where are you now?
- Category Market Share: The share of the category held by the brand, expressed as a percentage of the total usage Sessions or volume of Transactions in the category. Look at this today and vs last quarter or the same month last year
- Change in Market Share: Percentage point increase or decrease in market share compared to the previous week/month, highlighting growth or decline against competitors.
- Potential Market Share: What is the relationship between penetration and share? If you increase penetration by 3 % points, what would the impact on share be based on the current market? If you are being asked to increase by 10% points, is this realistic vs the NBD-Dirichlet curve of penetration? (Ask me about this!)
2. Penetration KPIs - Who drives this share?
- Category Penetration Rate: Percentage of the total subscriber base engaging with a category (e.g., social media apps). If eCommerce has a 80% penetration rate then increasing it is unlikely! Food delivery meanwhile has a low penetration rate at around 6% - but is this flat across consumer groups (hint - no it is not, it ranges from 47% down to 2%)
- Brand Penetration Rate: Percentage of the total subscriber base engaging with a specific brand within the category. This is similar to market share, but based on consumers, who by definition can use many brands (and do). So how many of the available market shoppers actually use you (and later, how many are solus vs dual?)
- Regional Penetration Rate: Brand/category penetration segmented by regions (e.g., city, state, or country level). This is where we start to get interesting - is you penetration the same across a country? Why?
- User Group Penetration: Penetration of brand/category within specific user groups (e.g., age, gender, income levels). One level deeper and we can look at segment and sub-segment penetration. If Food Delivery penetration is 6% on average, how does it look within Socio Economic Group A? With Students? How is this different by region?
- Targets: What is your potential penetration improvement?
3. Usage and Engagement KPIs - Who is light and who is frequent?
- Average Usage Frequency: Average number of times users engage with the brand/category per week/month. This is correlated to penetration (and therefore share). Big brands that have more users, also have more frequent users. What is a realistic KPI Increase if you are planning a big increase in penetration?
- Usage Duration: Average time spent per session within the brand or category.
- High-Engagement User Ratio: Percentage of users engaging with the brand/category frequently (e.g., daily or several times per week). The pareto ratio generally applies to consumer data though it is more like 80% of sales volume comes from 50% of consumers. Light users/buyers are the majority of most categories
- Engagement by User Group: Breakdown of engagement frequency across user groups, identifying high-engagement or low-engagement segments.
- Duplication KPIs: How many of your users also use your competitor? Remember, consumers generally do not love your brand and will use your competitor at the slightest encouragement - especially light category users. That applies to your competitors too though
- Dual Usage KPIs: Find out how many of your users are accidentally Solus loyal to you or your competitor and how many are actually loyal (ie multiple usage occasions) never using anyone else.
4. Growth Opportunity KPIs - Who can you grow realistically?
- Low-Penetration High-Potential Segments: Identification and count of user segments with low current penetration but positive growth trends in the category or related categories.
- Emerging Audience Growth Rate: Rate of increase in new user groups adopting the category or brand, which could signal future growth potential.
- User Retention Rate: Percentage of users who consistently engage with the brand over multiple periods (indicating loyalty or stickiness).
- Opportunity Matrix: Identify your targets. They should generally be 1) Light Category users 2)
5. Targeted Audience and Campaign-Readiness KPIs
- Conversion-Ready Segment Size: Number of users within low-engagement groups who show potential for conversion (e.g., occasional users or users of competitor brands).
- Campaign Effectiveness KPIs (monthly): Click-through rate (CTR), conversion rate, and cost per acquisition (CPA) for segments targeted in previous campaigns, providing insight into targeting accuracy and campaign ROI.
- High-Value User Group Size: Count of users who are high-frequency, high-duration users and can be targeted for upselling or engagement campaigns.
6. Social Media and WhatsApp Campaign KPIs
- Campaign Reach Potential by Segment: Potential audience reach for top-targeted segments within social media or WhatsApp based on penetration and engagement.
- Engagement Rate of Targeted Segments: Rate of engagement (views, clicks, interactions) within the segments identified for social media and WhatsApp campaigns.
- Weekly and Monthly Segment Performance Trends: Comparative trends for key segments targeted in past campaigns, tracking which segments continue to engage or grow after exposure to advertising.
These KPIs serve as a comprehensive foundation for understanding market dynamics, user engagement, and the effectiveness of brand-specific and segment-specific marketing initiatives. By tracking these KPIs, brands can make informed decisions, iteratively optimise their advertising efforts, and capture growth opportunities within their target digital markets.
