Increasing Marketing’s Relevance to the Business
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Increasing Marketing’s Relevance to the Business

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2013 ITSMA/VEM/Forrester Marketing Performance Management Survey. To be relevant to the business, marketers need to measure and communicate the right metrics. They have a long way to go. Less than ...

2013 ITSMA/VEM/Forrester Marketing Performance Management Survey. To be relevant to the business, marketers need to measure and communicate the right metrics. They have a long way to go. Less than half think that measuring marketing’s contribution to the business is very important or critical. And only a small percentage of CEOs and CFOs use marketing’s metrics in decision-making. The reasons: marketers fail to report on business outcomes; they focus on efficiency rather than effectiveness; and they don’t provide predictive insights. The C-suite wants marketing to paint a picture of how marketing contributes to the business. Marketers need to create clear line of sight between marketing investments with business performance–to select the right metrics, set numerical targets, and show how marketing activity is linked to business outcomes.

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Increasing Marketing’s Relevance to the Business Increasing Marketing’s Relevance to the Business Presentation Transcript

  • Note: This Abbreviated Summary highlights some of the significant findings from 2013 ITSMA/VEM/Forrester Marketing Performance Management Survey: Increasing Marketing’s Relevance to the Business A more in-depth analysis can be found in the full report available for purchase at: http://www.itsma.com/2013-marketing-performance-management-survey-summary/ Abbreviated Summary | June 2013 Increasing Marketing’s Relevance to the Business 2013 ITSMA/VEM/Forrester Marketing Performance Management Survey Matt Kerwick, PhD, Senior Analyst, VisionEdge Marketing Dianne Kim, Research Associate, ITSMA Laura Patterson, President, VisionEdge Marketing Laura Ramos, Vice President, Principal Analyst Serving CMOs, Forrester Julie Schwartz, Senior Vice President, Research and Thought Leadership, ITSMA ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • Key Takeaways The Situation Only a handful of senior executives are relying on marketing data to make decisions. Furthermore, more than half of marketers are not confident that they know which metrics and outcomes its key stakeholders care about. What’s going on? Marketers are reporting: 1. Marketing activity, not business outcomes 2. Operational efficiency, not effectiveness 3. Past performance, not predictive insight The Solution To capture the C-suite’s attention, marketers need to create a clear line of sight between marketing activities with business outcomes. The best-in-class marketers: • Speak the language of the business • Understand how the business leaders evaluate marketing effectiveness • Connect marketing activities to business results • Produce actionable marketing dashboards • Present marketing’s dashboard to the executive team • Use data and analytics to report past history and as a predictive tool • Employ analytics talent • Invest in analytical tools • Build analytical models ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • Remarkably, just 40% of marketers today believe that measuring marketing’s value and contribution to the business is very important or critical In your organization or company, how important is it that marketing is able to measure its value and contribution to the business? Mean Rating (N~396) . Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013 Very Important or Critical 40% ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • And only a handful of senior executives are relying on marketing data to make decisions To what extent are your key stakeholders using the data, metrics, and/or analyses developed by marketing? % of Respondents (N~383) Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013 Relies on marketing data to make decisions BU or Division Leaders CEO 16 13 9 Sales CFO/Finance 6 ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • 9 12 24 18 12 10 6 5 2 2 Extremely Confident = 10 9 8 7 6 5 4 3 2 Not at all Confident = 1 55% Most marketers don’t know which metrics and outcomes its key stakeholders care about How confident are you that you know which metrics/business outcomes your key stakeholders (e.g., CEO/CFO/BU leaders) care about? Mean Rating (N=394) Note: Mean Rating based on a 10-point scale where 1=Not at all confident and 10=Extremely confident. Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013 Mean Rating=6.8 ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • Marketers are reporting on marketing activity and associated costs, rather than reporting on metrics executives use to set direction Which performance metric categories are included on marketing’s dashboard? % of Respondents (N=163) Note: Multiple responses allowed. Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013 77 62 53 44 33 31 24 21 19 18 6 Sales pipeline (leads, conversion rates, win rates) Marketing spend ROI (e.g., campaign ROI, event ROI, lead ROI) Brand awareness/equity Customer satisfaction/loyalty On-time delivery of marketing programs Marketing contribution to customer retention/loyalty Marketing contribution to market share Marketing contribution to category ownership Other Marketing Activity and Efficiency Business Outcomes Marketing contribution to customer penetration/expansion/share of wallet ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • Most marketers use data and analytics to report on past performance rather than provide predictive insight Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013 Are data and analytics being used as a predictive tool or to report past performance? % of Respondents (N=342) To report past performance As a predictive tool Not applicable, we don’t use analytics 11% 25% 64% ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • A few exceptional marketers are able to demonstrate value and contribution to the business 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 For 2012, using a 100 point scale, please select what grade the CEO (or you, if you are the CEO) would give your marketing organization for its ability to demonstrate its value and contribution to the business. % of Respondents (N=424) Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013 27% 38% 29% 6% ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • The “A” marketers align their marketing activities to business metrics that executives care about Speak the language of the business Understand how the business leaders evaluate marketing effectiveness Connect marketing activities to business results Output- Based Operational Outcome- Based Leading Indicators Predictive  Media Mentions  Trade Show Leads  Click Through Rates  Lead/Rep  Lead Aging  Campaign ROI  Market Share  Category Ownership  Lifetime Value  Share of Wallet  Rate of Growth: Market  Share of Preference  Campaign Lift Modeling  Predisposition to Purchase  Likelihood to Defect ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • Produce actionable marketing dashboards Present marketing’s dashboard to the executive team “A” marketers establish clear data chains between marketing activities, objectives, and business outcomes to produce actionable dashboards Business Outcomes Marketing Objectives Marketing Programs Marketing Tactics ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • “A” marketers use analytics to inform future decisions Use data and analytics to report past history and as a predictive tool Employ analytics talent Invest in analytical tools Build analytical models How well does your marketing organization use data and analytics to enable the following? Mean Rating 7.5ab 7.0ab 6.0ab 6.3a 5.7a 4.7a 5.7b 5.0b 4.2b Make tactical marketing recommendations Make strategic business recommendations Predict customer/ market behavior The “A’s” (N=76) Middle of the Pack (N=105) Laggards (N=101) Note: Mean Rating based on a 10-point scale where 1=Poorly and 10=Extremely well. ab indicate a statistically significant difference. Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013 ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013 Web-based Survey Survey invitations were emailed during March and April 2013 to the ITSMA, VEM, and Forrester communities. In addition, survey invitations were extended via social media outlets such as Twitter and LinkedIn. 424 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 Study Methodology ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • Type of Company % of Respondents (N=424) 43% 36% 21% Primarily sell services Sell both products and services Size of Company % of Respondents (N=424) Industry Subsector % of Respondents (N=424) Primarily sell products Manager Director Member of the functional or LOB leadership team Individual contributor 34 6 7 4 16 8 25 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 Software solutions IT professional services/consulting Telecommunications and network systems and solutions Computer systems and solutions Marketing services/ advertising agency Management consulting Other services Other product manufacturing Other technology hardware systems and solutions Outsourcing Architecture/engineering/ construction Other 20 17 12 9 6 5 5 4 3 3 3 13 34% 29% 28% 9% Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013 Study Methodology Respondent Titles % of Respondents (N=294) ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.
  • Table of Contents for 2013 MPM Survey For More Information Julie Schwartz Senior Vice President Research and Thought Leadership ITSMA jschwartz@itsma.com | +1-407-788-8220 Increasing Marketing’s Laura Patterson President VisionEdge Marketing laurap@visionedgemarketing.com +1-512-681-8800, Ext. 12 Laura Ramos Vice President Principal Analyst Serving CMOs Forrester lramos@forrester.com | +1-650-581-3812 Slide Executive Summary 3 Methodology and Respondent Demographics 30 Detailed Findings 43 Marketing Performance Management 43 Data and Analytics 64 Dashboards and Models 90 Business Outcome and Sales Metrics Performance 110 Appendix: Study Definitions 117 Relevance to the Business ©ITSMA/VEM/Forrester 2013 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.