2014 ITSMA/VEM Marketing Performance Management Survey The Link Between Marketing Performance Management and Value Creation
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2014 ITSMA/VEM Marketing Performance Management Survey The Link Between Marketing Performance Management and Value Creation

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Marketing organizations are under more pressure than ever to create business value. Yet only ¼ of marketers say they are able to measure and report the contribution of its programs to the business. ...

Marketing organizations are under more pressure than ever to create business value. Yet only ¼ of marketers say they are able to measure and report the contribution of its programs to the business. What separates the “A” marketers from the rest? The “A”s have the right mindset, believe it’s possible, and make measurement a priority. In addition to the right mindset, the “A”s have nailed the five fundamentals of aligning marketing activities to business results.
1. They get clarity around the business outcomes that matter the most by speaking the language of the business and having regular two-way dialogue with senior executives.
2. They track and report outcome metrics that measure impact, not just metrics that track activity, output, and marketing efficiency.
3. They set quantifiable performance targets for every program and activity.
4. They use data chains to create clear lines of sight between marketing investments and business outcomes.
5. Finally, the “A”s use marketing dashboards to track its effectiveness but also to communicate impact on business outcomes, allowing them to justify additional budget.

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    2014 ITSMA/VEM Marketing Performance Management Survey The Link Between Marketing Performance Management and Value Creation 2014 ITSMA/VEM Marketing Performance Management Survey The Link Between Marketing Performance Management and Value Creation Presentation Transcript

    • Note: This Abbreviated Summary highlights some of the significant findings from 2014 ITSMA/VEM Marketing Performance Management Survey: The Link Between Marketing Performance Management and Value Creation A more in-depth analysis can be found in the full report available for purchase at: http://www.itsma.com/research/2014-itsma-vem-marketing-performance-management-survey/ Abbreviated Summary | May 2014 The Link Between Marketing Performance Management and Value Creation 2014 ITSMA/VEM Marketing Performance Management Survey Julie Schwartz, Senior Vice President, Research and Thought Leadership, ITSMA Laura Patterson, President, VisionEdge Marketing Dianne Kim, Research Associate, ITSMA
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. Study Highlights The Situation Despite marketers’ perceptions that they are improving, the percentage of “A” marketers has remained relatively constant. Marketers must move from campaign producers and sales enablers and seize the role of business value creators. Until marketers speak the language of the business and demonstrate value, they will be viewed as overhead. The Right Mindset 1. The “A’s” believe they can measure marketing’s value and make it a priority 2. The “A’s” hold themselves accountable, even if senior leadership does not 3. The “A’s” have a plan for continuously improving marketing performance management Nailing the Fundamentals In addition to the right mindset, the “A’s” have nailed the 5 fundamentals for aligning marketing activities to business results The value creators:  Get clarity around the business outcomes that matter by engaging in regular two-way dialog with senior executives  Select outcome metrics, in addition to activity, output, and efficiency metrics  Set and track quantifiable performance targets  Establish clear data chains to link marketing investments and activities with business outcomes  Build actionable dashboards to communicate impact on business outcomes and secure additional budget
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. Marketing organizations are under more pressure than ever to create business value % of Respondents (N=380) | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014 How do you see the pressure on marketing to measure its value and contribution to the business? 1% | Decreasing 85% Increasing Staying the Same14%
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. 90–100 Marketing was able to measure and report the contribution of its programs to the business 80–89 Marketing programs made a difference but the contribution to the business goals were not measured and reported 70–79 Marketing appears to have made some impact on the business, but it is not clear if the impact was material, nor is it measured 69 or lower Marketing programs didn’t make a difference—there is no clarity as to how marketing is contributing to the business Still, only 1/4 of marketers can answer the question, “What is marketing’s impact on the business?” % of Respondents (N=379) | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014 26% 40% 28% 6% For 2013, using a 100 point scale, please select what grade the CEO/Division GM would give your marketing organization for its ability to demonstrate its value and contribution to the business.
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. Where are you on the Marketing Performance Management Journey? What do you need to do to be best-in-class? Campaign Producers Sales Enablers Business Value Creators The “A’s” Middle of the Pack Laggards Track Marketing Activity and Output Contribute to Business Outcomes Improve and Manage Marketing Performance Activity Outcomes
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. Two things distinguish “A” marketers from the rest of their peers The Right Mindset Nailing the fundamentals of aligning marketing activities to business results & Sooner or later, those who win are those who think they can. Paul Tournier 1. Get Clarity Around the Business Outcomes 2. Select the Right Metrics 3. Set Quantifiable Performance Targets 4. Establish Clear Data Chains 5. Build Actionable Dashboards What needles does marketing have to move? Outcome-based, leading indicators, and predictive Well-defined and documented for each marketing program Between marketing activities, marketing objectives, and business outcomes Regularly presented to and reviewed with senior leadership
    • The “A’s” believe they can measure marketing’s contribution to the business and hold themselves accountable Note: Differences are statistically significant. | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014 In your organization or company, how important is it that marketing is able to measure its value and contribution to the business?  Believe It’s Possible 16% 37% 59% It is difficult, and perhaps even impossible, to measure marketing’s contribution to business outcomes The “A’s” (N=98) Middle of the Pack (N=151) Laggards (N=127) % of Respondents that Agree or Strongly Agree Does your marketing organization have a revenue goal? 65% 41% 38% The “A’s” (N=83) Middle of the Pack (N=120) Laggards (N=104)  Hold Themselves Accountable % of Respondents with a Revenue Goal ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. 71%71%The majority of the marketing staff has business acumen 1. Get Clarity Around the Business Outcomes % of Respondents that Agree or Strongly Agree The “A’s” (N=97) Middle of the Pack (N=148) Laggards (N=122) The “A’s” speak the language of the business and regularly engage in two-way dialog with senior executives Note: Differences are statistically significant. | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014 58%58% 41%41%
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. Activity Outcomes Effort Counting Efficiency Impact Likelihood of Outcomes Expected Outcomes The “A’s” (N=81) 78 82 83 90 47 47 Middle of the Pack (N=116) 75 81 69 61 37 28 Laggards (N=99) 70 68 57 48 24 20 Output- Based* Operational* Outcome- Based* Leading- Indicators* Predictive* Activity Metrics % of Respondents Tracking Metric Category * Indicates a statistically significant difference. | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014 The “A’s” track and report outcome metrics in addition to activity, output, and efficiency 2. Select the Right Metrics
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. The “A’s” not only set quantifiable performance targets, but they track their performance against those targets % of Respondents (N=303) | *Differences are statistically significant. | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014 32 52 10 5 1 6 34 35 20 5 Nearly every marketing program has well defined and documented performance targets and we measure our performance against those targets Many, but not all, marketing programs have well defined and documented performance targets Few marketing programs have well defined and documented performance targets We do not usually set qualtifiable performance targets for our marketing programs Don't know The "A's" Everyone Else 3. Set Quantifiable Performance Targets To what extent does your marketing organization set quantifiable performance targets for marketing programs and objectives?
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. The “A’s” are using data chains to create clear lines of sight between marketing investments and business outcomes Note: Differences are statistically significant. Source: ITSMA and VisionEdge Marketing, 2014 Business Outcomes Market Share Grow revenue for cloud/mobile offerings in NA Tier One Accounts by 15%, secure 17% market share Marketing Objectives Pilot projects Increase new pilot projects among NA Tier One Accounts by 35% resulting in 5 full RFQs Marketing Programs Seminars Conduct 15 seminars in major NA cities, resulting in 20 meeting requests to explore pilot projects Marketing Tactics Digital Marketing Initiate email campaign to promote cloud/mobile thought leadership assets to 5,000 NA contacts at Tier One Accounts, resulting in 300 seminar RSVPs 4. Establish Clear Data Chains
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. The “A’s” use their marketing dashboards to boost marketing’s effectiveness, communicate impact on business outcomes, and secure additional budget % of Respondents | Note: Differences are statistically significant. | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014 Does your marketing organization currently produce a marketing dashboard? 45%61%73% 5. Build Actionable Dashboards
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. Methodology Source: ITSMA/VEM Marketing Performance Management Survey, May 2014 Web-based Survey Survey invitations were emailed during April 2014 to the ITSMA and VEM communities. In addition, survey invitations were extended via social media channels such as Twitter and LinkedIn. 380 people completed the survey The Data Was Analyzed by: A’s: Marketing demonstrates contribution to the business (Grade: A) Middle of the Pack: Marketing makes a difference, but contribution not measured (Grade: B) Laggards: Marketing may have an impact, but not known if impact is material (Grade: C/D) Marketing Performance Grade
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. Respondent Demographics 42% 40% 18% Type of Company % of Respondents (N=380) | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014 Job Title Industry Software solutions IT professional services/consulting Marketing services/advertising agency Other services Telecommunications and network systems and solutions Other business services Other product manufacturing Other technology hardware systems and solutions Computer systems and solutions Financial services Management consulting Outsourcing (technology/business process) Other 15 13 12 8 7 7 6 6 6 5 5 5 6 Size of Company 32 6 10 6 17 8 22 Less than $50M $50M up to $99M $100M up to $499M $500M up to $999M $1B up to $4.9B $5B up to $9.9B $10B or more 33% 28% 25% 14% Sell both products and servicesPrimarily sell services Primarily sell products C-level/VP Director Manager Individual contributor
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. Table of Contents for For More Information Julie Schwartz Senior Vice President Research and Thought Leadership ITSMA jschwartz@itsma.com | +1-407-788-8220 2014 Marketing Performance Management Survey: Increasing Marketing’s Relevance to the Business Laura Patterson President VisionEdge Marketing laurap@visionedgemarketing.com +1-512-681-8800, Ext. 12 Slide Executive Summary 3 Methodology and Respondent Demographics 32 Detailed Findings 45 Marketing Contribution to the Business 45 Use of Data and Metrics 72 The Marketing Dashboard 87 Appendix: Study Definitions 107
    • ©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission. About ITSMA ITSMA is a research-based membership organization that helps B2B companies market and sell services and solutions more effectively. They work with the world’s leading professional services, technology, and communications providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. About VisionEdge Marketing VisionEdge Marketing provides proven expertise to help companies improve marketing accountability, measurement and analytics; create outcome- based marketing metrics; develop dashboards; leverage processes, data, systems, and use data and analytics to make strategic market, customer and product decisions.