Why Measurement Alone Will Not Lead to Better Marketing

A Look at the Top Performance Success Factors

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Companies that have strong performance-driven cultures support the classic adage that "You can't manage (or improve) what you can't measure." We recently interviewed 400 companies and found the important corollary: Measurement alone will not lead to results.

Over the last decade, the science of marketing has grown in importance as marketing departments have come under increasing pressure to defend budgets and more clearly articulate the value they are creating for the organization. In the last few years alone, advances in the science of marketing measurement as well as significant changes in communications mediums have transformed the function of marketing and the measurement of its impact on the business. Yet it was our sense, from working on the front lines of marketing, that few companies were reaping the benefits of these advances. We wondered, what's the disconnect?

To delve deeper, we launched a comprehensive study of 400 CEOs, CFOs, CMOs and lead marketers that was designed to better understand how companies are practicing marketing measurement and managing their marketing initiatives today. Confirming our intuition, only a quarter of companies reported that they are managing their marketing effectively today.

Those who are succeeding, however, are embracing what we call marketing-performance management, the practice of systematically measuring, learning from and improving on marketing strategies and tactics over time.

According to our study, those organizations that measured and managed have seen a positive impact on their top (and bottom) lines and are more likely to be market leaders. By studying these top-performing companies, we were able to uncover common success factors in improving marketing's impact on the business. These practices offer a road map around which marketers can construct successful marketing-performance improvement initiatives.

1. Foster senior-level buy-in.
Senior level buy-in is at the core of any successful marketing-performance program. Senior executives must believe in the importance of marketing, and corresponding marketing leadership must be able to drive their agenda and deliver tangible results throughout all areas of the company.

We found that 71% of those companies reporting that they excel in the area of managing and measuring their marketing effectively also reported having strong senior level buy-in. While among all of the companies we surveyed, just 42% reported strong senior level buy-in for measuring marketing effectively.

2. Seek strategic alignment.
Aligning measures with corporate, not just marketing, objectives and strategic goals can be viewed almost like a compass as it relates to marketing-performance management, ensuring that resources are being marshaled in the right direction. With strategic alignment, marketing organizations are able to develop measurement architectures or strategies that not only answer the question of "Was this tactic successful?" but also "How impactful was it to our overall business objectives?"

In fact, 80% of companies that excel at marketing-performance management also align their marketing activities and measures with corporate strategy.

3. Make targeted investments in people, technology and data systems.
Technology today offers an abundance of ways to track, measure and evaluate the success of ongoing marketing programs. It's no surprise then that making targeted investments in people, technology and data systems are prerequisites to excelling with marketing-performance management. The key is understanding which elements are required versus which are just "nice to have," and then building skill sets that can optimize their use.

We found that companies with strong systems and technology, the data they need for analysis and the skill sets to support their analysis requirements are twice as likely to be excelling with marketing performance compared to the norm.

Just as important, these companies are hiring and developing talent with the necessary skill sets to execute on marketing-performance initiatives, acquiring any missing experience and expertise, and investing in continuous training and education to build on their existing talent base.

4. Develop strong processes.
Processes serve as the mechanism to close the cycle of measuring, learning and improving -- ultimately ensuring that learning is translated into actions. In many cases, these companies have strong marketing leadership that has placed an emphasis on process; strong collaboration and teamwork across functions; prevalent discipline and accountability; and they strive for continuous improvement. Toward this end, we found that 60% of participants who have strong marketing-performance processes in place are seeing a positive business impact from their practices versus just 24% of the entire survey population.

Marketing performance is not an initiative or a one-time event; rather, it is a new way to manage marketing. This approach to marketing requires commitment and diligence to the core values and benefits of marketing-performance management to ultimately be successful. This commitment must be embodied by marketing leadership, bought into and reinforced by the senior-level business managers and the executive team and fully embraced by the marketing organization.

Ultimately this commitment manifests itself in successful marketing organizations' cultures and the philosophies of entire companies -- an insatiable thirst to continuously improve. As the research results show, those who embrace the marketing-performance-management approach to continuous improvement reap the benefits in terms of superior business results over time.

ABOUT THE AUTHORS
Karl Gustafson is a senior manager at CMG Partners, a marketing consulting firm based in Durham, N.C. Karl can be reached at karl.gustafson@cmgpartners.com.
Rich Schreuer is senior VP of Chadwick Martin Bailey, a full-service market research firm based in Boston. Rich can be reached at rschreuer@cmbinfo.com.
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