How do you personally define success? High income? Substantial net worth? A fine home? Peer recognition?

On a personal basis, there are likely almost as many definitions of success as there are people in the world.

In marketing, though, there are just four measurable elements of success:

Profitability, Market Share, Customer Satisfaction and Customer Retention.

Profitability requires little explanation. The very reason businesses exist is to make a profit, or generate more revenue than they pay out. Profitability may be increased by reducing overhead and the cost of goods soldier by increasing the price to the buyer.

However, prices can only be raised so much. Per the laws of price elasticity, as prices rise, unit sales tend to decline, as does Market Share; which brings us to our next measure of marketing success.

Market Share, as a measure of success, is essential to marketers since the higher the share, the more stable the brands performance is in the marketplace. A product with a 65% market share is a force with which to be reckoned. A product with 3% share is vulnerable to a variety of market factors such as competitive pricing, promotions, loyalty to better-known brands and more.

Financial managers understand the impact of Profitability and Market Share. However, concepts such as Customer Satisfaction and Customer Retention are softer items and tend to be treated as lesser by those managers. The long term success and growth of a brand is highly dependent on them.

Customer Satisfaction doesn’t appear on a balance sheet. It can’t be measured in dollars and cents. It’s measured by the customer’s feelings about a brand. Does the brand deliver its promise? Is it a good value? Does it bring status to the owner? Is the customer generally happy with the product? Customer Satisfaction begets repeat purchases, loyalty, word-of-mouth advertising and, of course, long-term profitability via Customer Retention.

Customer Retention, the final measure of marketing success, is closely tied to Customer Satisfaction, Profitability and Market Share. A satisfied customer is likely to remain loyal to a brand, thus enhancing market share over the long-term, as new customers are acquired. Retained customers increase the profitability of a brand. In the course of learning new customers, retained customer’s purchases can be counted on for continued profit performance.

It’s known that it’s five times more expensive to acquire a new customer than it is to keep an old one. Makes you wonder why marketers don’t generally invest more in Customer Retention, doesn’t it?

Few business organizations focus on all four elements of marketing success, probably because they’re challenging to balance and manage as separate items, yet they’re strongly interdependent.

The four elements of marketing success are reasons enough for financial managers and marketing managers to gain a better understanding of one another discipline and work toward the common good of their companies.

Author's Bio: 

Mark Lamplugh is a fourth-generation firefighter and former captain with the Lower Chichester (PA) Fire Company. Mark is President of the board for the Institute for Responder Wellness. Mark owns Influence Media Solutions (https://www.influencemediasolutions.com) which is his own Marketing, Public Relations, Digital Marketing, Branding, Business Development and Social Media company. He advises companies such as Fountain Hills Recovery & Lionrock Recovery about first responder programs.. He just published his first book “Beginners Guide to Digital & Social Media” which is available on Amazon. Mark is a professional advocate for the behavioral and mental health of firefighters and other first responders. He’s been involved in the creation of several responder specific treatment programs and is one of the leading experts in bringing these programs to responders. Lamplugh hosts his own talk show called "Firefighter Wellness Radio". He has published dozens of articles on responder wellness topics and is recognized by the American Acadamy of Experts in Traumatic Stress. He has helped hundreds of responders with getting help for behavioral & mental health issues. He can be reached for comment at ceo@influencemediasolutions.com