Taking measure: the link between metrics and marketing’s exploitative and explorative capabilities

Abstract

Purpose

While metrics are becoming increasingly important for marketing’s relevance, there is also a need to understand how they, as enablers of learning, affect marketing’s adaptive capabilities that ensure its long-term success. Therefore, this study aims to test the association of marketing and financial metrics use and the metric-based orientations of training and compensation, with two key marketing routines – exploitation, i.e. the perfecting of existing activities while allowing for incremental adaptations and exploration or experimentation accompanied by radical adaptation.

Design/methodology/approach

The study gathers data from 205 managers and uses partial least squares structural equation modeling to test the hypothesized relationships.

Findings

Marketing metrics encourage both forms of marketing adaptation. Financial metrics use discourages exploration. Market orientation and long-term orientation strengthen (weaken) the positive (negative) relationship between marketing (financial) metrics use and marketing exploration. Metric-based training is more positively associated with both adaptive capabilities than a metric-based compensation orientation, albeit weakly.

Research limitations/implications

The study’s central proposition – that different metrics or metric orientations are associated with distinct types of knowledge, interpretations, mindsets, motivations and cultural contexts – provides a deeper theoretical understanding of the pathways by which a metric emphasis affects marketing adaptation.

Practical implications

Marketing managers should emphasize marketing metrics and training more than compensation, to promote marketing exploitation/exploration, while exercising caution in overstressing financial metrics given their negative association with exploration. This latter negative relationship can be weakened (as can the positive one between marketing metrics and exploration be strengthened) with increased market orientation and long-term orientation.

Originality/value

This study addresses the research gap regarding the relationship between metrics as a configurational element of marketing organization and marketing adaptation.

Citation

Nath, P. (2020), "Taking measure: the link between metrics and marketing’s exploitative and explorative capabilities", European Journal of Marketing, Vol. 54 No. 7, pp. 1549-1580. https://doi.org/10.1108/EJM-01-2018-0050