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Tektronix wins for best practices

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Tektronix, Portland, Ore., which provides test and measurement equipment and services to communications and computer companies, has its own, award-winning process for testing the effectiveness of its marketing programs.

Last month, IDC awarded Tektronix a CMO Best Practices Award in recognition of the work it has done in developing a set of marketing metrics-a so-called marketing dashboard. IDC noted how the company had inolved various departments in the initiative.

The marketing dashboard development effort was led by Martyn Etherington, VP-worldwide marketing at Tektronix, who joined the company in 2002 from IBM Corp. with a mission to improve the marketing investment ROI.

"We needed to move from activity-based marketing to outcome-based marketing," Etherington said. "We needed to determine the outcome and tie the outcome back to strategic objectives."

To define the marketing outcomes, Etherington and his dashboard team met with executives in sales, product line development and senior management. "Basically we asked, `What would I and my team need to do to obtain a grade A from you and your constituencies?' " he said.

For example, one of the outcomes desired by the sales department was more qualified leads flowing from the marketing department. "We had to define what is a `qualified lead,' and if it is a qualified lead, what would be the right amount of leads," he said.

To determine the number of qualified leads the marketing department ought to be delivering to each sales rep each month, the dashboard development team looked at variables such as the average number of selling days each month (between 15 and 17) and the ratio of deals closed each month from sales or marketing leads (70/30, with 70% of deals coming from sales-generated leads).

Once these metrics had been defined, the team determined the number of qualified leads the marketing department should be providing to each account manager per month. The group also determined efficiency metrics, to monitor the efficiency of the marketing activity. Among the efficiency metrics were cost per lead, promotional spend ratio, results per employee and forecast accuracy.

Tektronix also developed effectiveness metrics, which included lead-to-opportunity conversion, sales funnel reporting and lead quality. On the marketing ROI side, the team created a set of metrics including lead-to-order conversion, response to order and order dollar per market dollar.

The company uses these metrics throughout its marketing activities, including advertising, online marketing, direct mail, e-mail, seminars, trade shows and sales calls.

Tektronix has had remarkable results since the dashboard was first launched in 2003. It has achieved a 125% increase in responses to marketing programs and has seen a 90% increase in qualified sales leads, Etherington said. In addition, the company has reduced its cost per lead by 70%. Moreover, the company's marketing forecast accuracy now has a variance of 3%, down from a variance of 50% before the dashboard was developed.

"By having some basic metrics, we are placing ownership on the accountability within the organization," Etherington said.

While technology-including Microsoft Excel and Macromedia Flash-supports the dashboard, it is not the driving force behind the program. "The way we put this in place was predominately a manual or semimanual process," Etherington said. "Unless you have basic principles in place and the discipline to hold yourself accountable, regardless of what software you put in place, you will never be successful."

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