How do you measure engagement?

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Presentation at the ARF Engagement Council.

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How do you measure engagement?

  1. 1. © 2008 MarketingNPV LLC. All Rights Reserved. How Do You Measure Engagement? The Behavioralist’s Perspective ARF Engagement Committee Meeting May 22, 2008
  2. 2. 2 © 2008 MarketingNPV LLC. All Rights Reserved. Who We Are Specialized Advisory Firm – No Conflicts of Interest Exclusive focus on marketing measurement Publishers of the MarketingNPV Journal Advisors to Global 1000 clients including: Qwest
  3. 3. 3 © 2008 MarketingNPV LLC. All Rights Reserved. Pat LaPointe Managing Partner Dave Reibstein Managing Partner Professor of Marketing Wharton School, University of Pennsylvania On The Record… Our work has been published and recommended by: Marketing Leadership Council
  4. 4. 4 © 2008 MarketingNPV LLC. All Rights Reserved. What We Do We deliver skills, tools, and processes to continuously improve marketing effectiveness and efficiency; establishing clear links between marketing investments and financial value creation. Strategic Resource Allocation Tactical Resource Optimization Performance Measurement Setting & Allocating Budgets How much should we spend? Where do we spend our available $’s by Product/Geo/Segment? Which non-cash currencies are crucial? - Brand Equity - Customer Value Shorter term, how do we get the most impact from each Marketing $ spent? By Mix/Campaign/Initiative Insight Dashboards Metric Selection Benchmarks & Forecasts Navigation & Design Analysis Process Data Structures What if ? • Cross-functional alignment with finance, sales, and other business units • Internal alignment in marketing • Planning process integration • Knowledge acquisition priorities • Decision rights evolution • Training for users and managers • Internal communications • Recognition, rewards, and incentives for adoption Change Management
  5. 5. 5 © 2008 MarketingNPV LLC. All Rights Reserved. Problems In Measuring Engagement Research Pray for correlation on self-reported behavior See an Ad Feel Differently Buy Something
  6. 6. 6 © 2008 MarketingNPV LLC. All Rights Reserved. The Behavioralist’s View of Engagement $ Advertising Direct Mktg. Public Relations Promotions Merchandising Sponsorships Thought Leadership Community Relations Customer Service Etc.
  7. 7. 7 © 2008 MarketingNPV LLC. All Rights Reserved. Challenge #1: Engagement is Non-Linear Channels, tactics, and points-of-contact/influence overlap in a highly complex ecosystem.
  8. 8. 8 © 2008 MarketingNPV LLC. All Rights Reserved. Challenge #2: Value Is Not Always Transactional $ These people create tangible financial value, even if they never actually buy anything.
  9. 9. 9 © 2008 MarketingNPV LLC. All Rights Reserved. A New Definition For a Transaction Transaction: An act which directly or indirectly leads to a purchase or re-purchase event.
  10. 10. 10 © 2008 MarketingNPV LLC. All Rights Reserved. Transaction Scoring 1 1 3 1 3 3 3 9 3 9 9 9 3 9 Transaction Type Score Non-linear scoring model (1,3,9) Scores linked to correlation to value (relevance, proximity, magnitude) Actual transaction can be positive or negative (-1,-3,-9) Assess effectiveness and take required action based on: -Score -Directionality -Velocity
  11. 11. 11 © 2008 MarketingNPV LLC. All Rights Reserved. Monitor Motivate Inquire Measuring Engagement Intervene Nurture Focus - Engagement + Direction Engagement -Velocity+ Inspire Accelerate Model & Replicate Marketing Effectiveness = ∆ (Direction*Velocity)t+1 vs. expectation What is the impact of marketing tactics on direction and velocity of behavioral engagement. Does advertising influence “transactional” behavior? Which types of low-value transactions are leading indicators of higher-value transactions?
  12. 12. 12 © 2008 MarketingNPV LLC. All Rights Reserved. Measuring Engagement in 4 “Simple” Steps 1. Develop a vision a. What are your business objectives (hint: awareness is not an objective)? b. What are the behavioral pathways? c. How are you attempting to influence them? d. So what? 2. Create a methodical testing process a. Break the big problems down into smaller component parts b. Apply experimental design 3. Look for leading indicators of eventual purchase behavior a. Score the “drivers” of value creation as described earlier 4. Develop/refine action plans to leverage “drivers”.
  13. 13. 13 © 2008 MarketingNPV LLC. All Rights Reserved. Comprehensive Measurement Framework Comprehensive Measurement Framework ObjectivityObjectivity Account- ability Account- abilityAlignmentAlignment Credibility Protect and Defend the Credibility Chain
  14. 14. © 2008 MarketingNPV LLC. All Rights Reserved. www.MarketingNPV.com Pat.LaPointe@MarketingNPV.com

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