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The best technology marketers are well versed in MPM

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Marketers in the technology sector have made significant strides in developing and deploying marketing performance measurement (MPM) strategies. Most have moved beyond the unrealistic quest to establish the perfect return on investment (ROI) metric and have instead developed a solid marketing operations area that focuses on maintaining a set of pragmatic marketing performance objectives and metrics.

However, many companies remain behind the MPM development curve, with economic, marketplace and corporate pressures mounting.

What does it take to achieve a strong MPM foundation? Here are some key success factors to consider:

Executive support and a manager with direct MPM accountability. Marketing operations is typically the manager or team in this role.

Separation of responsibilities and accountability among the appropriate groups. Marketing operations typically owns the MPM strategy, data/metrics aggregation and governance at the global level. Business units and regions own data collection, quality and interpretation.

Consistency of definitions and data presentation, and active use of data as part of the decision-making process—using the data coupled with strategic insight to drive decisions. Ask yourself if your MPM process is driving action from a strategic and tactical perspective and demonstrating marketing's contribution to the organization.

Process first, then technology and automation. Many companies don't hesitate to do it manually first.

Collaboration with multiple groups. Teaming with sales operations (e.g., development and governance of the lead-management process from marketing to sales) is particularly important.

These key success factors will help you achieve a strong MPM foundation. But what are the best practice leaders doing today, and what does their next-generation MPM process look like?

IDC's CMO Advisory Practice recently completed a rigorous study of the MPM process of 15 top technology firms. Here are some highlights of what today's top marketers are doing from an MPM perspective:

  • IBM maintains MPM from a central marketing operations function, providing its global marketing board with an integrated view across all business units. This process is part of marketing's strategic planning and resource management process, ensuring that the marketing measurement and specific metrics line up with the company's strategic and business objectives. IBM said that "MPM is benefiting from a more direct linkage to business performance" and that "marketing priorities are better aligned to business priorities." Also, consistent use of common metrics under a common structure allows IBM to restructure programs, shift emphasis on particular offerings and move investments to higher-growth opportunities—in other words, to drive actionable results.
  • Nortel uses a cascading dashboard strategy as part of its MPM process. [An MPM dashboard is a tool used to communicate objectives, set goals, track performance, communicate progress, stimulate dialogue and identify areas for improvement.] Its dashboards include a CMO or executive-level dashboard as well as others at the business unit, function and regional levels. These dashboards are developed during annual planning meetings, where leaders from the various marketing organizations develop global marketing priorities for the coming year as well as the next two to three years. Then a team identifies specific marketing objectives that will flow from these priorities down through the organization.
  • Citrix has developed highly automated interactive dashboards that are used by its marketing areas rather than a marketing operations team. Currently, more than half the data in the dashboards is automated, and the company anticipates achieving full automation later this year. The dashboards incorporate .xml-based data from an internally developed archive for each functional area. As described by Linda Haury, senior director-marketing operations and planning, "By enabling these [and other] interactive capabilities, we've given business owners and key stakeholders the power to view and analyze key metrics in a user-friendly and personalized way. … Our internal business owners can now access these metrics quickly and easily—saving precious time and enabling them to make faster and better decisions about their piece of the business."
  • Intel is a good example of how to add an MPM process to existing planning and operations oversight. Each year, the company identifies four top-level strategies. Then Intel determines key business strategies, marketing metrics and targets (reported on the dashboard). These metrics are monitored quarterly or monthly and do not usually change radically throughout the year. Lastly, Intel drills down to the project level and identifies tasks and management by objectives (MBOs), which are measured by activity (completed or not) or results. Intel's dashboard increases visibility, reinforces accountability and facilitates execution of key marketing strategies. Another important result, according to Intel, is that "discussions driven by the dashboard have made the staff smarter and more cognizant about how we're contributing to Intel business success and why."
  • CA initiated its MPM process via a collaborative sales and marketing initiative. Targets, developed jointly and based upon estimated conversion rates, are set for each region and business unit. Marketing then determines the number of leads it must generate and the kind of procedures required to get those leads. CA's comprehensive customer information database tracks customer touch points, assesses lead conversion potential and initiates nurturing activities. Metrics include the number of inquiries generated from marketing activities, qualified by marketing and accepted by sales, as well as the amount of net new business. Monthly reports from each region go before a corporate group, which coordinates a final report to the CMO and other executives. Having a successful MPM process has enabled CA to reallocate campaign funds and online media spending, as well as conduct tradeoff assessments for various marketing categories.

The next level of MPM, MPM 3.0, will require further operational rigor across the organization. These changes will include developing a better understanding of established metrics, identifying their predictive capabilities and enhancing customer and prospect intelligence to improve a go-to-market strategy.

Every marketer that wants to catch up to MPM 2.0 or get ahead of the MPM curve needs to pay heed to these counsels:

1) If you don't have an MPM process yet, start now—and don't aim for perfection; 2) Use relevant metrics that drive action; 3) Include all marketing groups in your MPM process as well as sales; and 4) Add your MPM process to your weekly, monthly, quarterly and annual reporting as well as strategic planning process.

Michael Gerard is VP-research, CMO Advisory Practice and Executive Advisory Group at IDC. He can be reached at mgerard@idc.com.

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