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Friday August 4, 2006

Metrics: Getting rid of Voodoo in Marketing

It’s time for marketing to get out of the realm of voodoo and spin, to create a more defensible position for budget dollars and develop a more secure “seat at the table” by demonstrating the business champion skills they have.

Sound too good to be true? I think not. The high-tech industry is finally catching up with more established consumer businesses in the area of metrics and accountability. This is not a marketing trend per se, but a marketing “practice” trend, which is just as important. This is a must-have going forward. I believe marketing can be a data-driven, metrics focused art.

When high-tech marketing becomes more metrics based, it does a few critical things: - Drives the demand for stronger campaigns and programs that deliver results, and - Ties the discipline more closely to the revenue generation of a company. - Up-levels the conversation from “what did we do” to what did we learn - Enables the tracking of indicators of the healthy of the franchise - Give the CMO, BU lead and Sales lead to agree on what matters early on.

The rigor that metrics bring is a craving in business today. Through metrics, high-tech firms can move away from just doing something because you think it will work, to building a platform where you understand the parts, how they are integrated, and the effect of each. Fundamentally, it enables a leadership opportunity.

Knowing what to measure and what context matters is key to metrics. We’re working on a project for a client today on this. They’ve already hired one vendor and have found that what they ended up with is measuring what could be measured, and not what needed to be measured.

The downfall for companies is in defining what needs to be measured, what is truly measurable, and putting the necessary systems in place to capture and analyze data. Too often the dashboard is either too simplistic (10,000 foot level where you are measuring program results) or too sophisticated (90,000 foot level things you see at the end of the quarter) for both the needs of the company and the ability of the internal organization to adjust.

Critical factors of driving metrics into an organization:

A marketing organization first needs to understand what it impacts.

If it is an Enterprise focused company, the ultimate ‘deliverable’ might just be creating leads that drives revenue for the company. If there are larger objectives of expanding the footprint, the corporate goals are could also include positive impressions in the market of CEOs, where its impact is most critical.

Secondly, it needs to define what should/will be measured.

Insights and metrics are needed at all levels of the organization. But different levels and lenses need to be crated. For example the CMO/VP will need fewer and more targeted metrics than the program manager. But what’s also important is that data in absense of norming data is not actionable. Thus, metrics need to also include interpretive views. In other words, developing the grounding norms that makes the metrics measures relevant. This could be things like doing comparisons y/y or qtr/qtr for relevant spend or revenue.

Third, all marketing organizations needs IS tools.

Marketers need to get CIO support to spend the dollars to build systems that allow for easy measurement and analysis. 1 system for all the members of the organization needs to be created.

And fourth, build programs and initiatives that are built around clear measurable results.

What needs to happen is defining measures that will clearly align the business objective expectations with program status. An evaluation of effectiveness made needs to happen so a ‘”grade” can be assigned, and recommendations done from there.

Looking Forward has to have a Baseline
When companies first start out on a metrics migration, I’ve seen the predominant focus is on inquiries, leads, PR placements, and number of seminars. This is normal when a high-tech company is first introducing metrics; it focuses first on what can be measured. Think about the reality of this: leads and inquiries is relatively easier to control — you design a campaign, and you estimate the number of leads desired within that short (3-month, 6-month) timeframe and with the budget already allocated. For the large part, these metrics measure activity. The drawback of these metrics is that they’re not predictive of what will happen down the road and it still focuses on the conversation on “we did what we said we would do”.

While all of this is a good start, it is not going to help the organization to see and predict future trends, and therefore make decisive moves to lead. And that’s what metrics can do. When designing a dashboard system at Autodesk, I can honestly say the baseline was difficult and valuable, but it was the predictive trending that created better strategy and thus a longer impact on the business.

To do that, you’ve got to design and architect the right measures that will allow you to answer some critical questions every business has:

Strategy:
- What % of the targeted market have we penetrated? How is that up/down from last year?
- Profile customers and prospects by current and potential value
- Is there a region or segment that is underpenetrated that represents “low hanging fruit”?

Product:
- Are we spending money with the right go-to-market mix of activities?
- What is the spend mix and performance by vehicle for the initiative?
- What is the spend mix and performance by functional group or BU?

Brand:
- What AR/PR/CR efforts were incorporated into this Campaign?
- What movement have we seen on the Brand index and are perceptions in line with goals?
- Movement of brand index in key target segment?

Demand Generation:
- You are x% of the way through the quarter and y% way achivement on leads generation.
- What is the spend for this Campaign? How does that compare to plan?
- How many leads has the Campaign produced? How does that compare to plan and other campaigns?

ROI:
- Of all the programs focused on a particular segment, is any 1 message resonating better and causing higher yields than other campaigns?
- What is the cost/lead for this program?
- What is the average deal size?
- What deliverables were produced for this campaign?
- What is the customer satisfaction rating overall?
- What is the conversion rate from click to opportunity?
- What Sales Tools/Involvement were a part of this Campaign?
- What is the revenue for this group of products?
- Is one channel or region more efficient than others?

Customer Experience:
- Measuring customer satisfaction
- Measure repeat business to reflect loyalty
- Measuring % referrals from existing clients to prospects

Technorati Tags:
metrics, Strategic Planning, Autodesk