10 factors to successful Marketing Performance Measurement
Today's combination of data and technology supports increasing methods for marketing measurement. However, traditionally marketing hasn't been measured to the detail it can be today.
Performance Management
The CFO (and CEO, COO) have typically driven initiatives like Business Performance Management that spans across all departments. However, when it comes to marketing, what gets measured, how, and by whom?
Business Performance Management (BPM), known by most in the C-suite, is defined by Wikipedia as having "a selection of goals, consolidation of measurement information relevant to an organizations progress against these goals, and interventions made by managers in light of this information with a view to improving future performance against these goals."
Marketing Performance Management (MPM) Wikipedia says, it "focuses on measuring, managing, and analyzing marketing performance to maximize effectiveness and optimize the return of investment (ROI) of marketing ... it involves the creation of a metrics framework to monitor marketing performance, and then develop and utilize marketing dashboards to manage marketing performance."
Challenges with Marketing Measurement
Marketing isn't a transaction. Marketing has a variety of complex components. At what level do we measure our marketing effectiveness? High level metrics like revenue and expenses are definitely being measured by all organizations. But, let's drill down a few levels to individual marketing investments like a campaign, a TV commercial, a sponsorship, an event (ie tradeshow), a coupon, or a flyer. Were there external factors like weather, competition, interest rates, gas prices that affected our performance? Gain insights into performance for an event by a product or a region or a store- are these being measured? Are they measured in a silo or in combination or both?
Challenges:
- Not all marketing activities are directly attributed to performance.
- Marketing activities happen in silos (email campaigns versus media) making it difficult to see the impact of multiple activities - Was it the Super Bowl TV spot or my email campaign or both that drove revenue?
- Lack of organizational commitment to marketing measurement
- We have all heard, "Marketing is an "art" not a science."
- Social media cannot be or should not be measured. You may have heard the saying, "what's the ROI of your Mom?"
- Fear that measurement and transparency will show negative performance
- Data. Data. Data. Marketing data, although plentiful, is located in many disparate systems both inside the organization and outside (agencies, AC Neilson, web hosting, call centre partners, etc..) Bringing this data together takes time and resources.
10 factors to successful marketing measurement
- Organizational Commitment - Use metrics the C-Suite agrees on like marketing event ROI, number of leads, conversions, approvals, sign-ups, response rates, market share, customer profitability, product profitability. Marketing must have a focus on improving marketing effectiveness - in all areas.
- Having all your marketing activity spend and performance data on a single platform with interactive dashboards will make it easier to track, measure, and plan ahead for marketing performance. In addition, you will see both attributed and unattributed marketing events. Download a free marketing data model whitepaper.
- Leverage your data and insights to drive business cases for spending.
- Have a process and platform in place to test "what-if" scenarios and optimize marketing ROI
- Forecast your metrics and communicate to stakeholders the forecast, how you are tracking (updates), and actuals to forecast.
- Focus on methods to set, track, and measure ROI (return on investment) or ROMI (return on marketing investment). For more information check out the Lenskold group's Marketing ROI and Measurement Study. 65% of the respondents say they need to improve marketing effectiveness.
- Social Media ROI is a contraversial topic and a separate blog post. Radian 6 has put out a free ebook "measure and analyze your social media efforts". Scott Stratton of Unmarketing wrote and an article on "the things we should ask ROI question about before social media". Again, it's about having agreed upon metrics, measure them, and communicate results. These can include web hits, subscribes, "likes," or "follows and mentions."
- Involve your agency and other external partners with your measurement goals.
- Negative performance will happen. Put in processes that measure quickly, enable you to fail faster, and demonstrate changes for
improvement.
- Invest in measuring - it pays. Marketing Performance Management can improve marketing effectiveness by 40%. CMO Council reported that spending between 1-5% of your budget on MPM see a return on this investment. Download the Kneebone Marketing Performance Management ROI calculator
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