The power of marketing metrics proving marketing's value to the organization vem aims 2011 event handout
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The power of marketing metrics proving marketing's value to the organization vem aims 2011 event handout

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During dmaDetroit's 15th annual AIMS event, Laura Patterson, co-founder and President of VisionEdge Marketing Inc., presented on "The Power of Marketing Metrics: Proving Marketing’s Value to the......

During dmaDetroit's 15th annual AIMS event, Laura Patterson, co-founder and President of VisionEdge Marketing Inc., presented on "The Power of Marketing Metrics: Proving Marketing’s Value to the Organization." This is her Presentation.

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  • 1. About VisionEdge Marketing – Experienced Practitioners The Power of Marketing Metrics: Founded in 1999 and headquartered in Proving Marketing’s Value to the Austin, TX, VisionEdge Marketing, Inc. serves more than 100 customers, and Organization counting. VisionEdge Marketing, Inc. is a data-driven and metrics-focused marketing firm that specializes in improving marketing performance and creating competitive advantage designed to attract, secure and retain profitable customers. Laura Patterson Services Include: President & Author  Marketing performance management laurap@visionedgemarketing.com  Marketing and sales alignment  Product and strategic marketing  Pipeline re-engineering  Professional development Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 2Page 1
  • 2. Introduction – Session Objectives The Economy Takes its Toll on Marketing $ 1. Review the value and  More emphasis being places on where companies invest and current state of measuring allocate marketing resources marketing “Need the math  According to B-to-B Magazine’s 2010 Outlook: Marketing 2. Identify best practices in marketing measurement, behind the Priorities and Plans survey, “…in 2009 nearly 60% of marketers accountability and creativity.” cut their marketing budgets in analytics response to the recession.” John Seifert, Chairman-  Forrester reported that less than 3. Offer practical steps to 20% of companies expected CEO of Ogilvy & Mather support the next steps of North America marketing budget increases  What’s ahead in 2011 for your journey while over 40% experienced marketing budgets? further reductions in 2010. Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 3 Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 4Page 2
  • 3. Our Current State Need Performance Management Improvements Made + Next Steps …the process of measuring  Better at linking activities  Lack of proper infrastructure – systems, tools, processes, skills to progress to business results, specifically revenue. support measurement toward “The top challenge for marketers hampering progress achieving key remains to better quantify and measure  Making progress on some the value of marketing programs," in metrics – mostly activity  Need move from metrics outcomes and management to performance objectives in spite of improvements in accountability and efficiency type of management over previous years. metrics order to  Challenged to develop and  We’re taking execute a systematic approach optimize measurement seriously to marketing performance individual, management (MPM) group or  Learn how to leverage insights organizational CMO Councils 2008 Marketing Outlook from metrics and dashboards to performance. steer their ship. Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 5 Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 6Page 3
  • 4. Best Practices Marketing Organizations Five Key MPM Best Practices  Audit – Benchmark, assess, and close gaps Have a set of measurable  Alignment – Direct Line of Sight performance standards, a pointed focus on outcomes,  Accountability – Metrics Framework and and clear lines of Metrics accountability.  Analytics – Data, Insights and Model They are performance-driven  Automation – Infrastructure (Process, outcome-based . Systems, and Tools Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 7 Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 8Page 4
  • 5. Align to Business Outcomes Our 3 Roles Enable Us to Move 3 Business Outcomes 1. The Starting Point - serve as the foundation for everything that follows Find/Secure Grow Keep A consequence, result, Profitable Customer  Customers effect Customers Value  How the organization will measure success 2. Start with the business Acquisition Penetration Monetization decisions that need to be made  Understand to what degree Marketing is expected to move the needle Market Share Lifetime Value Brand/ 3. Employ an alignment Customer Equity technique- such as Outcome- Based Mapping™ Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 9 Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 10Page 5
  • 6. Adopt a Metrics Framework Need Outcome-based Performance-Driven Outputs Outcomes Metrics that Tie Marketing to the Business Predictive Our Job Points the Way to the Metrics Likelihood Leading- of Outcome Indicators Share of Wallet Rate of Growth: Market Share of Preference Business Outcomes Outcome- Market Share 5 Market Share 4 Lifetime Value 5 Customer/Brand Based Category Ownership Indicators Indicators Equity Indicators Lifetime Value • Price Premium • Share of Preference • Purchase Frequency Adoption Rates • Share of Voice • Share of Wallet • Net Advocate Score • Share of Distribution • Advocacy/Loyalty • Customer Franchise Efficiency Value Operational Apps/branch • Rate of Customer • Tenure Campaign ROI Acquisition • New Product Program: People Ratio Acceptance/ • Rate of Growth:Market Cost/Billing Dollar Adoption Rates Program spend/headcount • Product Margins Counting Activity- Media Mentions Program/Total Spend Awareness: Demand Ratio Based Ctm visits Marketing Spend:Revenue Click Through Rates Site Visitors Demo Downloads 11 12 Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission.Page 6
  • 7. Analytics and Data Actionable Dashboards  The ability to drive actionable insight from data  Performance  Analytics are critical to: Management takes  Facilitating better and faster fact- reporting based decisions  Linking the results of marketing  Monitoring and programs to customer consideration, preference, loyalty, reporting results share of wallet and the financial enables fact-based results these outcomes produce. decisions  Establishing some degree of accuracy the outcomes that can  Metrics and KPIs (key be achieved from the relationships, products, services, performance indictors) and processes are the building blocks  Take DATA for creating a “Data is the new creative.” dashboard - Stephan Chase, Marriott Rewards Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 13 Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 14Page 7
  • 8. A Marketing Dashboard Automation: Systems, Tools and Processes Has all the necessary dials and gauges to tell Start Start Start you where you are, where you’re going and Categories for the Marketing Start at what speed – along with indicator lights Executive Dashboard Event that illuminate at the first sign of a problem Event Event Event Outcome Outcome Occurs Outcome 1. Customer Acquisition and Occurs Occurs Outcome Occurs  Enables organizations to measure, monitor Retention NO NO NO and manage business activity using both Event NO Event Event Event Decision Decision Occurs Decision Decision Occurs Occurs financial and non-financial measures Occurs 2. Customer Advocacy and YES YES YES YES  Provides an overview marketing objectives, Value (LTV, Margin, Loyalty, Event Event Event Event and real-time insight on progress toward Share of Wallet) Occurs Occurs Occurs Occurs each objective 3. Customer Equity  Shows how marketing is moving the End End End End needle 4. Product Innovation and  Assesses what is and isn’t working Adoption  Fosters decision making – 5. Competitive Alignment Data Collection Performance Monitoring is actionable Positioning/Market Value Metrics Analysis Target Setting Measurement  Provide sa unified view into marketing’s Index (share of preference, Reporting - value rate of growth) Dashboards  Enables better alignment between 6. Show me the Money marketing and the business Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 15 Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 16Page 8
  • 9. A New Kind of Audit Crossing the Finish Line  A focus on identify areas where an organization is weak or lacking and where they may be performing well in order to create a highly functional marketing organization.  An assessment that examines an organization’s alignment, processes, systems, tools, and skills related to marketing performance and the primary areas of the marketing workflow.  A regular auditing process manages the lifecycle of performance management reducing the risk of Marketing become disconnected from the business and focusing on things that don’t contribute to results or conflict with outcomes and ensure organizations optimize performance processes and systems changes that occur over the course of the year.  REQUIRES PERFORMANCE MANAGEMENT STANDARDS Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 17 Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 18Page 9
  • 10. Why Companies Invest in Marketing Need to Move from Talk to Walk Don’t make the grade: •Only 17% of CEOs would give Marketing a “A.” (VEM) Dissatisfaction With Understand the market and • 34.9% of CEOs give marketing a C grade, only 9.6% of CEOs give Metrics Continues: marketing an A grade, 8.4% give marketing a D grade. (CMO •96% of marketers tracking customers Council) 1-20 metrics and • 76% say metrics are not Still a Priority:  Develop and execute a strategy •59% consider measuring Marketing performance to be a top-three useful in decision making “The purpose of a (Mktg Leadership priority for their company. Roundtable) to create preference and CEOs reveal that "enhanced return on Marketing •Accountability top priority for 66% of senior Marketing executives (ANA) Top Priority Still: Can’t Get No Satisfaction: consideration that enables the business is to investment“ is a top priority for Marketing. (ARF) •Only 9% somewhat satisfied with their company’s ability to set and monitor Marketing Metrics (VEM) •CMOs under pressure to demonstrate value; ROI major issue in 2008 (B-B organization to create a •48% felt that CEOs believe that their organization’s ability to measure marketing performance was only marginally effective. (VEM MPM) Mag) Acquire more of something  customer.” 2000 2004 2005 2006 2007 2008 2009  Acquire it faster Still Don’t Make the Grade: - Peter Drucker Top Priority • only22% of CEOs give Marketing an Measurement  Acquire it cheaper •66% rank Accountability as Chief Concern (ANA) •Measuring effectiveness is second most important Measurement “A” (VEM MPM) Challenged: Challenged: •Fewer than 1 in 10 say their Marketers remain priority (ANA) organization is completely effective at  Otherwise, might as well just put •66% of business executives say marketing analytics •Marketing is only marginally or somewhat MPM (Lenskold) challenged to and metrics are marketing’s greatest need (Booz effective at measuring •Measurement Challenged: measure value and more feet on the street Allen) Effectiveness (Deloitte •30% of 200 CMOs rank MPM most ROI, <50% use Lack of Satisfaction: study of over 460 significant challenge (Aberdeen) marketing  Need to demonstrate we are •Only 21% of 319 respondents rate themselves executives) Top Priority Still: analytics (Alterian, "satisfied" or "very satisfied" with Metrics capabilities Still a Priority: •Connect Marketing to Financial n=1545 ) “getting the job done” (CMO Council) •54% of survey participants say Consequences (Aberdeen) •Proving ROI critical (Red Herring CMO Measurement Challenged: measuring marketing Summit) •Over half (51%) say that difficulty in measuring performance is one of •Need to show impact on purchasing performance a key reason for pressure on Marketing their top 3 priorities (B-B Outlook 2009) department (ANA and Booz Allen Hamilton) Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 19 Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 20Page 10
  • 11. Break the Never Ending Cycle Six Action Steps The Best-in-Class Employ Perhaps the greatest risk is that without a perception of accountability and value, CEOs and CFOs will make sweeping, arbitrary decisions about cutting Report expenditures which ignores the relationship between marketing Measure spending to effectiveness and produces a short-term focus Select Outcome—based leading to limited success. Performance Targets Adopt a Metrics Framework Need focus to go from outputs- Set Measurable Marketing Objectives focused to outcome-focused Align and Link to the Business Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 21 Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 22Page 11
  • 12. The Rewards of a Performance-Driven Marketing Organization Thank You and Questions  Better insight into customers – what they want and what messages will resonate Metrics in Action: Creating a  Greater message continuity Performance Driven Marketing  More effective allocation of resources Organization  Fewer underperformers on the sales team Workbook: Its More than Money on the  Higher win rates Line: Creating Metrics to Measure Marketing’s Effectiveness, Impact and  Improved customer acquisition and Value retention  Stronger customer loyalty and equity Both are available at www.visionedgemarketing.com  Greater customer share of wallet Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 23 Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2011 VisionEdge Marketing. VEM Proprietary. Not for reproduction or redistribution without written permission. 24Page 12