Tag Archives: Metrics

Why ROI Is Often Wrong For Measuring Marketing Impact

ROI is seductively simple. But is it what you really want? Marketers beware, this might hurt:  Using ROI to gauge impact can severely distort the true value marketing is delivering for your organization. Oh-Oh! Sure, it’s hard to have a marketing conversation these days without hearing ROI-this and ROI-that. It is, after all, one of today’s most beloved business buzz terms. And of course top management wants the “bottom line” on marketing’s contribution to business goals, and ROI is a handy yardstick.

It’s not that the notion of ROI is evil or anything. After all, linking marketing to financial performance is absolutely critical. It’s just that most people who use ROI in a marketing context probably aren’t applying it correctly, or really mean something else, says Dominique Hanssens, professor of marketing at UCLA Anderson School of Management. ROI’s roots are in evaluating one-time capital projects. “But is marketing a one-time capital project?” asks Hanssens. Clearly not.

We might (and indeed do) talk about marketing “investments” all the time. But marketing expenditures are technically an expense, as opposed to an investment, and that’s an issue here. In finance-speak, marketing costs are a P&L item, not a balance sheet item.

In the video above, Prof. Hanssens discusses how marketing measurement is adapting to a changing world.

 

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Across people, platforms, channels, screens, processes…

Big data, smart data, little data. Data is everywhere; it powers our daily lives. As consumer media consumption continues to shift digitally, marketers are faced with a new set of challenges in reaching their audiences with the right message, at the right time, and through the right channels. Marketers’ ability to collect and analyze data — big, small, social and otherwise — is needed to help create great customer experiences. This discussion will take a look at the ways marketing is adapting across people, platforms, processes, screens, and channels because of this surge of available data.

 

CIO Technology Priorities for 2013

Recent research by Gartner, Inc. shows that the priorities of Chief Information Officers (CIOs) for 2013 are shifting toward customer-oriented and other externally-focused technology initiatives. The Gartner report, Hunting and Harvesting in a Digital World: The 2013 CIO Agenda, was based on a worldwide survey of over 2,000 CIOs working in 36 industries in 41 countries.

Here are the top 10 CIO technology priorities for 2013 identified in the Gartner research:

  1. Analytics and business intelligence
  2. Mobile technologies
  3. Cloud computing (SaaS, IaaS, PaaS)
  4. Collaboration technologies (workflow)
  5. Legacy modernization
  6. IT management
  7. CRM
  8. Virtualization
  9. Security
  10. ERP applications

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We all need a growth hacker

Marketing automation company Ifbyphone recently published their 2013 State of Marketing Measurement Survey. “It’s one of the most exciting research studies we have conducted in this rapidly changing sector”, says Ifbyphone CEO Irv Shapiro. “I am fascinated by many of the results that reflect the innovation that is occurring in marketing measurement.”

So, what are the results?

A primary trend from the 2013 research is the level of support, and scrutiny, that marketers are receiving from their CEO’s around marketing measurement as a growth engine. Two thirds of CEO’s surveyed have significant influence in marketing decisions and half receive regular marketing measurements. In fact, one in ten CEO’s seek marketing measurements daily (9.2 percent) while one in five (19.7 percent) are receiving updates weekly.

How often marketing metrics are reported

 (graph by Ifbyphone ’2013: State of Marketing Measurement Survey Report’)

What is being measured?

Marketing teams are being asked to measure a wider range of marketing metrics with a greater focus on revenue and tracking of customer interactions from both offline and online sources. Tracking new customer sources is the highest rated marketing metric utilized (by 49 percent of all respondents), with measuring increases in sales/revenue across marketing channels a very close second (48 percent).

Given the dominance of the sales-related metrics already being measured by the marketing team, it is not unreasonable to conclude that marketing measurement innovation, which enables marketers to better track and monetize engagements with customers and sales prospects, will be a high priority in coming years.

Use of marketing metrics

 (graph by Ifbyphone ’2013: State of Marketing Measurement Survey Report’)

Marketing enjoys budget growth

Investment in an emerging generation of marketing measurement tools is needed to satisfy the CEO’s increasing demand for tracking data. In order to facilitate this, budget growth and additional marketing resources are being provided.

Possibly as a result of the increased focus from the CEO and the growing role marketing has as a growth engine, almost half of respondents (45 percent) reported an increase in their marketing budgets in the past year while only 12 percent are working with a tighter marketing budget.

Respondents were asked what their marketing personnel priorities would be for 2013/14 and a significant majority were focused on proactive and growth related strategies. Almost a third (32 percent) plan to add more full-time marketing resources, one in five respondents (19 percent) plan to invest in more contingent marketing workers, while one in 10 (10 percent) will hire a new marketing agency.

One in 10 respondents (10 percent) will also share resources with other departments, such as IT, reflecting the highly technical nature of twenty-first century marketing analytics. A much smaller percentage of respondents are planning to downsize their investment in marketing personnel in 2013/14.

The emergence of the Growth Hacker

In line with increasing marketing budgets, more marketing people are being hired. Growth hackers, marketers who combine marketing knowledge with a strong technical background to drive growth, are having an impact on improvements in marketing measurement. One quarter of respondents (25 percent) now have a Growth Hacker on their marketing team, the same percentage that have Product Managers.

Marketing teams with Growth Hackers are prioritizing investments in emerging marketing measurement technology, across both online and offline channels. Almost three quarters of marketing teams with a Growth Hacker engaged (72 percent) are experimenting with Voice-Based Marketing Automation (VBMA), 19 percent more than marketing teams generally. Meanwhile, 44 percent of marketing teams with Growth Hackers are using marketing automation software compared to only 26 percent of marketing teams generally.

Over a third of Growth Hacker-backed marketing teams (34 percent) are utilizing heat map tools compared with only 20 percent of the average marketing teams. Almost twice as many marketing teams with Growth Hackers (28 percent) are experimenting with emerging workflow automation tools, compared to 15 percent generally.

Across every category of marketing measurement technology, it is the Growth Hackers who are leading the charge in experimenting and innovating with emerging tools that will give them, their CEO, and their marketing colleagues the edge in tracking where the best results are being achieved for marketing investments.

See the complete survey at Ifbyphone.com

Bridging Finance & Marketing Using Metrics

Finance departments often criticize marketing’s inability to present a tangible ROI and use financial measures. It’s a common lament and one we’ve all heard. Rob Stuart, Executive Vice President & Publisher at CFO Publishing, in a recent conversation reminds us that CFOs expect marketers to come prepared to describe what their ROI is going to be for marketing investments. CFOs want to know how marketing is going to measure success, the key performance indicators for a conference and the ROI targets. CFOs are looking at the big picture and the organization’s overall investments.

If we want the CFOs support we need forge a stronger partnership with our finance colleagues. The perception or reality of an antagonistic relationship needs to be replaced with collaboration. And one of the best way to begin to build this relationship is to work from the CFOs comfort zone: data, analytics and metrics.

You may think that you already do.  But here’s an example of how easy it is to throw things off kilter. A key source of the friction is derived from using the words with double meanings. For example, consider “brand equity”. The marketing professional uses the term to describe the health of the brand’s franchise with its key audiences; the financial professional uses it to characterize the brand as an economic asset. Whatever their differences, marketing and finance professionals need to find common ground.

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Big Data: Who owns customer and budget?

Though frequently at odds, marketing and IT executives agree that harnessing Big Data is imperative to building a customer-centric corporate culture, according to a study by the CMO Council, in partnership with SAS.

They also agree that a lack of CMO/CIO alignment, rigid silos, unclear responsibilities, and a lack of leadership impede an organization from using Big Data to its full potential, the survey of CMOs and CIOs found.

Big Data is important to achieving a customer-centric culture, according to the study:

  • 40% of marketers and 51% of IT executives said it’s critical for improved decision making.
  • 36% of marketers and 23% of IT execs said data drives the ability to personalize customer experiences.

Below, additional findings from the CMO Council study, titled Big Data’s Biggest Role, Aligning the CMO & CIO.

Access to in-depth data, and the ability to translate it into insights, is a competitive advantage according to 70% of marketers: 30% say it is critical, and 40% say it is part of the overall picture.

However, most respondents view the flood of incoming data as part obstacle and part opportunity: 61% of CMOs and 60% of CIOs say so, admitting they have a long way to go still in using Big Data properly.

The main challenge, according to 52% of marketers (and 45% of IT professionals), is that functional silos block aggregation of data from across the organization, making it difficult to truly achieve customer-centricity:

Moreover, 39% of CMOs say the corporate culture is not aligned around the needs of customers.

A likely explanation for the lack of total customer focus is that no clear ownership of the customer exists. Among marketing executives, 18% say that ownership rests with the CEO, 17% say the CMO, and 19% say sales. IT professionals assign ownership to the CEO (20%), CMO (19%), and sales (17%).

Organizations that report they have achieved total partnership between CMO and CIO also have clearer ownership of the customer.

In such organizations, marketers (24%) and IT professionals (30%) say the CEO owns the customer. Furthermore, marketers and IT executives in “total partnership” organizations are highly satisfied with their company’s ability to engage the customer (42% of marketers, 31% of IT execs).

Read more: http://www.marketingprofs.com/charts/2013/10574/marketing-and-it-big-data-an-obstacle-an-opportunity-and-key-to-customer-centricity#ixzz2RHLYXuwe

 

Getting the Most from Your Marketing Dollars

You know you need to market your practice, but how effective are your current methods? Marketing metrics give us the best information about what’s working — and what is not — and will help you make better investment decisions. Learn how to measure the impact of your efforts and refine your approach in this webinar, “Marketing Metrics — Getting the Most from Your Marketing Dollars” with Cheryl Whitman, CEO of Beautiful Forever Consulting.

Cheryl Whitman is an internationally-recognized pioneer in medical spa and aesthetic medical business consulting. She is a published author, speaker, and cosmetic marketing specialist, and spearheads a successful team of aesthetic business consultants and business professionals as founder and CEO of Beautiful Forever. Don’t miss the opportunity to learn how you can get more out of your marketing dollars!

 

What’s it worth?

In business the value of something is what most things are about. You deliver a service, wich is valued by another, they pay you for this service. It’s the key of doing business. In Marketing Operations (MO) companies that evolve toward higher and more sophisticated Marketing Operations are reaping a higher value. In Journey to Marketing Operations Maturity one can read that high-value MO goes beyond automation, measurement and administration to include higher value-add tools such as cross-functional collaboration, change management, metrics alignment, competency development, predictive analytics, and the like.

According to the survey, companies showed clear tendencies to extend the scope of MO. Thus, the scope of MO typically includes fundamental, expanded, and sophisticated elements:

  • Fundamental MO Scope — Includes budget management, customer relationship management (CRM), vendor management, marketing outcomes measurement, and marketing services (e.g., bill of materials, licensing, pricing, creative, production management).
  • Expanded MO Scope — Expands beyond the “Fundamental MO Scope” to comprise marketing campaign automation, process mapping and design, best practices and knowledge management, cross-functional and behavior-rewards alignment, marketing operations management (MOM), marketing resource management (MRM), digital asset management (DAM), and marketing process metrics.
  • Sophisticated MO Scope — Evolves to higher sophistication than the “Expanded MO Scope” to include advanced processes (e.g., LEAN Enterprise, Six Sigma, and supply chain management), marketing governance, portfolio management, customer profitability, change management, competency development, shared vision and strategic management, enterprise marketing management, metrics alignment, and predictive analytics.

The graph shows the progression over time from “Fundamental” to “Expanded” to “Sophisticated” practices

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Spirits are up

In times of crisis it’s always hard to find a light at the end of the tunnel, but just as good times, hard times also come to an end! According to annual Decision Dynamics Survey by the Financial Times and Doremus optimism is rising among global executives around the world.

Across four key metrics—global economic conditions, local economic conditions, industry economic conditions, and corporate outlook—more senior-level executives project improvements over the next six months vs. the same period a year earlier some 41 percent are expecting global economic conditions to improve over the next six months, up from the 25% who did so a year earlier.  No more then 52 percent expect improvements in their own businesses over the next six months, up from the 39% who did so in 2011.

The outlook differs by geography: North Americans were the most optimistic overall, particularly about economic conditions locally and within their own industries. By contrast, Europeans were the most pessimistic, particularly regarding local economic conditions.

For the first time in nine years, senior execs ranked “improving market share/competitive position” (47%) as their top goal for the year. That shift pushed “cost cutting” into the No. 2 spot (43%), while developing/marketing new products/services (39%) ranked No. 3

Read more: http://www.marketingprofs.com/charts/2013/10470/worldwide-business-optimism-reaches-two-year-high#ixzz2PtMwzPdS

Leaner, faster and better marketing

Dr. Robert Shaw is a renowned businesswriter on marketing. He also is a consultant on the field of marketing, particularly Marketing performance measurement and management and Database marketing.

In his work two key elements come forward.

  1. Marketing automation: the idea that the marketing function should embrace IT to improve its efficiency and effectiveness. Shaw has tracked the uses and abuses of IT in marketing for over 20 years and defined best practice in this field.
  2. Marketing performance measurement and management. Shaw identified the need for marketing to become more measurable and accountable and his researches continue to define best practice in this field.

In this ten minute interview, conducted by Mayer Becker, Shaw sheds his light on ‘Leaner, faster and better marketing’.