Martech’s Magicians: Microns, Micronbox and µniverse (Part 11)


How can marketers measure success in the Martech 2.0 era? The Martech 1.0 had the Net Promoter Score (NPS). What are similar metrics for Martech 2.0? There are three metrics we can consider: hooked score, reacquisition ratio, and earned growth rate.

Hooked score: As we discussed earlier, one of the key objectives is to win the transaction upstream game. This means focusing on attention, engagement and habits. A simple way to measure this is to track all the actions that a customer does with the brand communications and properties. Add 1 point for every open and click done by customers over the past 30 days to arrive at the Hooked score. The higher the score, the greater the attention. This can then be correlated with transactions and the forward-looking customer lifetime value (CLV). The Hooked score is a simple metric and easy to track. The software for doing it already exists. Email opens and clicks are already tracked, SMS and push notifications clicks can be tracked via custom links. Code on the website and in the app can track the actions. What’s missing is the scoring. Brands can then even test if offering low or high atomic rewards changes user behaviour.

Reacquisition ratio: My belief is that a third of all acquisition is actually reacquisition. No brand that I have spoken to is actually tracking this. It is not difficult to track. For every new paid acquisition, a brand needs to simply look at its database and see if that email ID or mobile number was in the customer database. The reacquisition ratio is the number of reacquired churned customers to the total acquisitions being done. The higher the number, the greater the waste. Brands should then use reactivation techniques as an alternative to reacquisition via ad platforms.

Earned growth rate: This is an idea that combines the power of retention and referrals. It is mathematically represented as Net Revenue Retention + Earned New Customers (ENC) – 100. Reichheld, Darnell and Burns discuss this in a recent article in Harvard Business Review: “Once you have organized revenues by customer, you can determine your NRR. Simply tally this year’s revenues from customers who were with you last year, divide that amount by last year’s total revenues, and express that figure as a percentage. ENC is the percentage of spending from new customers you’ve earned through referrals (as opposed to bought through promotional channels).” They offer an example: “Company A’s revenues grew from $100 in 2020 to $130 during 2021, or 30%. In 2021 customers who were on the books in 2020 accounted for $85 of revenues. Some of them expanded their purchases by a total of $5, but that growth was more than offset by other customers who reduced purchases by a total of $20, resulting in an NRR of 85%. New customers accounted for $45 in revenues—$25 from earned new customers (referrals) and $20 from bought new customers. Adding the NRR (85%) and ENC (25%) and then subtracting 100% results in a 10% earned growth rate.”

Taken together, these three metrics are at the core of Martech 2.0 – they measure attention, retention, reactivation (or non-reacquisition), and referrals.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.