Question

1. Briefly critique the measures the company Mekanism use to assess their success. What are their limitations?

Answer 1

Mekanism is a San Francisco-based creative agency that specializes in the development and production of marketing campaigns, commercials and branded entertainment for multinational companies. Mekanism focuses its work on "Storytelling for Emerging Media", a line the company has trademarked.

To Measure its success in their business, company uses following metrices-

Net profit margin metric indicates how efficient your company is at generating profit compared to its revenue.Basically, this number tells you how big a sum of? each dollar earned translates into profits.

Gross margin metric in which The higher your Gross Margin, the more your company earns by each sales dollar. You’ll be able to invest it in other operations. This metric is especially important for starting companies as it reflects on improved processes and production.

Cost of Customer Acquisition.Have you ever thought about how many small things contribute to acquiring a customer?

The Cost of Customer Acquisition (CAC) is calculated by dividing all the costs spent on acquiring new customers (marketing expenses) by the number of new clients acquired in a specific time frame. If you spent $8000 on marketing in September and acquired 40 customers in this time frame, your CAC is $200.

the Limitations that they give only outer and long term picture of success but they do not tell about short term picture of business. Mekanism has to face issue of deal with changing customer trend and financial resources which affect the performance of these metric. the technology changes and changes in marketing trend also affect the performance of these KPI of success.