Monday, December 27, 2004
Developing Methods and Benchmarks (Part I)
— W. Edwards Deming
According to the CMO Council's July 2, 2004 report "Measures and Metrics: The Marketing Performance Measurement Audit," the measurement of marketing performance and marketing's return on investment is a high priority. But few companies — less than 20% to date — have developed meaningful, comprehensive measures and metrics for their marketing organizations. And over 80% of the companies surveyed expressed dissatisfaction with their ability to benchmark their marketing programs' business impact and value. Scary stuff indeed. Yet those companies who have established a formal, comprehensive measurement program are said to achieve superior financial returns and have higher CEO confidence in the marketing function.
Corporate accountability and fiscal responsibility are impossible without developing processes and methods for capturing marketing effectiveness data, creating benchmarks over time to guide future efforts, and having a clear understanding between sales and marketing what’s being measured and why. There is power in knowing which efforts have been most effective and this can only be accomplished through a strong focus on measurement at all levels of the company.
The ability to measure the performance of marketing initiatives is critical. Measurement allows the Corporate Marketing group to:
- Ensure that the marketing strategy laid out in the annual Marketing Plan is on target
- Track and improve the lead generating effectiveness of individual marketing tactics
- To examine how the greater sum total of marketing tactics is a contributory factor to the revenue growth of the business
- To ensure a steady “lead pipeline” is maintained to Business Development/Sales, thereby buoying the organization with new business wins in good times and insulating it from falloffs in difficult times with a more diverse and deep customer pool
A Case Study for Real-Time Marketing Measurement
In my own experience, on more than one occasion, having measurement strategies in place has not only allowed us to examine a troubled marketing initiative while still underway, but enabled us to work with media partners to redirect the campaign mid-stream and realize an almost 190% increase in leads — a strong argument for the value of "real-time" marketing measurement. Of course this was only possible because of our measurement-driven internal marketing and design team who understood the issues, the needs of the brand and was skilled enough to address the technical and creative challenges. Multiply this over all of the ongoing marketing initiatives of the company and you can begin to see the kind of unparalleled return on marketing investment that is possible and the flexibility to turn on a dime to meet business opportunities or competitive challenges.