Marketing strategy selection, marketing metrics, and firm performance

Abstract

PurposeThis research aims to investigate the relationship between customer‐based performance measures (marketing measures of firm success) and business growth performance (strategy measures of firm success), in the context of strategic marketing positioning decisions and suggests customer‐based metrics may play a key role in measuring overall business achievements.Design/methodology/approachThis is an empirical survey of 209 business‐to‐business services firms.FindingsCustomer‐based performance (marketing measures) is associated with the choice of generic positioning and segmentation strategies, while strategic positioning choice (i.e. low‐cost vs differentiation) is indirectly, rather than directly, associated with business growth performance. The “both” strategy, where firms simultaneously pursue both low‐cost and differentiated strategies, leads to improved performance in these B2B services firms.Research limitations/implicationsThe study potentially has industry‐ and/or service‐specific limitations.Practical implicationsThis research suggests that firms that cannot measure performance at the customer level may be failing to understand the outcomes of successful marketing programs and decisions. In addition, this research suggests that both operational efficiency and differentiation are keys to growth in B2B services.Originality/valueThis study reinforces the continued applicability of Porter's generic positioning and segmentation strategies for B2B services but suggests that performance differences between strategies in this context are best captured using a customer‐based measure (share of wallet, lifetime value, retention rate and return on marketing investment) rather than a more general business growth measure.