Making Marketing Relevant to the Business 2013 MPM Study Results Webinar

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ITSMA Web Briefing | June 4, 2013
Measuring and Communicating
Marketing Performance

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# MPM13
ITSMA Web Briefing | June 4, 2013
2013 ITSMA/VEM/Forrester | Marketing Performance Management Survey
Measuring and Communicating
Marketing Performance
Julie Schwartz
Senior Vice President, Research and
Thought Leadership | ITSMA
Laura Patterson
President | VisionEdge Marketing
Laura Ramos
Vice President, Principal Analyst serving
CMOs | Forrester

Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 3Tweet at #MPM13
The future of marketing is in your hands…
“The idea of having a
separate marketing department
is going to vanish.”
–Gerd, Leonhard, HBR, May 24, 2013
“In many cases, senior
business leaders must open
up their agendas and
recognize the importance of
supporting and even
undertaking initiatives
that may traditionally
have been left to
the chief marketing officer…
we’re all marketers now.”
–McKinsey Quarterly, April 2012

B2B Marketing is bifurcating
Marketers earning a seat
at the “table”
Marketers supporting
sales

Does your marketing
organization present its
dashboard to the
executive team?
% of Respondents
(N=170)
76
13
11 Don't know
No
Yes
Does your marketing organization currently produce a marketing dashboard?
% of Respondents (N=286)
Yes
60%
No
40%
Many, but not all, marketers are producing dashboards and
sharing them with the executive team
Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013

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)
Relies on
marketing data
to make
decisions
BU or Division Leaders
CEO
16
13
9
Sales
CFO/Finance 6

Why isn’t the executive team using the marketing data?
Three Reasons
1. Marketing activity,
not business outcomes
2. Operational efficiency,
not effectiveness
3. Past performance,
not predictive insight

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.
Mean Rating=6.8

Consequently, marketing dashboards typically report 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?
Note: Multiple responses allowed
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…
Marketing contribution to customer retention/loyalty
Marketing contribution to market share
Marketing contribution to category ownership
Other
Marketing
Activity
and
Efficiency
Business
Outcomes

Marketers use analytics to report on past performance
Are data analytics being used as a predictive tool or to report past performance?
Note: Multiple responses allowed
79
30
14
Not applicable,
we don't
use analytics
To report past
performance
As a
predictive
tool

This is what the C-suite cares about
Shareholder
Value
Customer
Value
Market
Share
Revenue
Profitability/
Margin

To capture the C-suite’s attention, marketers need to create clear
line of sight between marketing activities and investments with
business outcomes
Source: VisionEdge Marketing, 2013
Marketing’s Relationship to the Business
Shareholder Value Revenue Market Share
Investor Satisfaction
and Loyalty
Customer Satisfaction
and Loyalty
Business
Outcomes
Customer Acquisition Customer Retention Customer Growth Marketing
Objectives
Preference and Satisfaction Endorsement/AdvocacyConsideration and
Engagement
Marketing Effectiveness
Reliable/Trusted Channel Relevance Positioning
Marketing
Programs
Marketing
Activities

The C-suite wants marketing to paint a picture of how marketing
contributes to the business
Share of preference  Share of wallet  Propensity to purchase
Category growth rate  Product/service adoption rate
Innovation revenue rate  Price premium
Pipeline volume, value, and velocity
These are the things that demonstrate marketing’s business acumen and strategic contribution:

The C-suite can’t relate marketing activity-based metrics to
business outcomes
These are the things that marketers count:
Number of new leads
Number of sales accepted leads
Whitepaper downloads
Media mentions
Twitter followers
Click through rates
Site registrations
Demo downloads

The C-suite can’t relate operational metrics that gauge marketing
efficiency to impact and value
These are the things that show what you spend on the activities you count:
Campaign ROI | Cost per lead
Customer Acquisition Cost
Marketing influenced pipeline
Marketing influenced revenue
Leads per rep | Lead conversion rate
Program spend:headcount ratio
Cost per order dollar
Marketing spend:revenue ratio

Marketers need to tap the power of data and analytics to
advance the BUSINESS
What Marketing is currently doing:
 Measure and report marketing’s
performance
 Allocate the total marketing budget
 Justify the marketing budget
 Target specific campaigns and offers
to the segments most likely to respond
What Marketing isn’t doing,
but had better start:
Identify new or emerging customer
segments or markets
Drive innovation by developing new
offerings/solutions
Predict customer buying behavior
Analyze purchase patterns to prioritize
offers made/timing of offers (propensity
to buy models)

A few exceptional marketers have earned that seat at the
proverbial table
Marketing was able to measure and
report the contribution of its programs
to the business
Marketing programs made a
difference but the contribution to the
business goals were not measured
and reported
Marketing appears to have made
some impact on the business, but it is
not clear if the impact was material,
nor is it measured
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.
27%
38%
29%
6%

4
5
11
33
38
50
63
58
39
The "A's"
Middle of the Pack
Laggards
Worse (decreased by
5–20% or more)
About the same (decreased or
increased 5% or less)
Better (increased
by 5–20% or more)
These “A” marketers are actually moving two of the most
important business outcome needles
*Indicates a statistically significant difference.
In your last fiscal year compared to two years ago, how did your organization perform in the following areas:
% of Respondents
10
9
10
20
41
52
70
50
38
The "A's"
Middle of the Pack
Laggards
Market Share*
Customer
Satisfaction/
Loyalty*

What the “A”
Marketers do

What the “A” marketers do that the others don’t
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

But even the “A” marketers emphasize pipeline metrics over the
business outcomes the C-suite cares most about
Note: Multiple responses allowed. *Indicates a statistically significant difference.
Which performance metric categories are included on marketing’s dashboard? % of Respondents
81
74
58
33
32
26
23
23
26
Sales pipeline (leads, conversion rates, win rates)*
Marketing spend
Marketing contribution to share of wallet
Marketing contribution to customer retention
Marketing contribution to category ownership*
The “A’s”
(N=57)
83
57
43
48
32
22
14
17
19
Marketing spend
Middle of
the Pack
(N=63)
63
53
63
51
37
23
28
16
7
Marketing spend
Laggards
(N=43)

Despite the room for improvement, the “A” marketers are further
along in their journey
How well does your marketing dashboard
enable you to do the following?
Mean Rating
The ―A’s‖
Middle of
the Pack Laggards
N~58 N~65 N~44
Monitor and measure performance against
business outcomes and marketing objectives
7.2
ab
6.0
a
5.2
b
Track performance of core marketing strategies
and processes
7.3
ab
6.1
a
5.4
b
Analyze performance of campaigns or other
marketing activities
7.6
ab
6.3
a
6.0
b
Note: Mean rating based on a 10-point scale where 1=Not at all well and 10=Extremely well.
ab indicate a statistically significant difference.

The “A’s”
(N=100 )
Middle of
the Pack
(N=151)
Laggards
(N=143)
7.9ab
6.9ac
5.9bc
What is the starting point?
The “A” marketers know better what their 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
abc indicate a statistically significant difference.

Get clarity around the business outcomes:
There are three questions that every marketer needs to ask the
business leaders
1 What specific, measurable business
outcome will this program impact?
2
How do you expect this program/activity
to contribute (what needle needs to
move and how far)?
3
How will we know and measure
that this program achieved
the objective(s)?

Select the right metrics
Output-
Based
Operational
Outcome-
Based
Leading-
Indicators
Predictive
Counting
 Media Mentions
 Trade Show Leads
 Click Through Rates
 Site Registrations
 Demo Downloads
 Number of New
Contacts/Leads
Efficiency
 Lead/Rep
 Lead Aging
 Campaign ROI
 Program:People Ratio
 Cost/Billing Dollar
 Program
Spend/Headcount
 Program/Total Spend
 Awareness:Demand
Ratio
 Marketing Spend:
Revenue
Business
Outcomes
 Market Share
 Category Ownership
 Lifetime Value
 Adoption Rates
 Pipeline Contribution
Likelihood
of Outcomes
 Share of Wallet
 Rate of Growth:
Market
 Share of Preference
Outputs Outcomes
Expected
Outcomes
 Campaign Lift
Modeling
 Predisposition to
Purchase
 Likelihood to Defect
 Marketing Mix
Optimization

Set quantifiable performance targets
Increase revenue
Get more customers
Build stronger relationships at senior
executive levels at existing accounts
Increase brand equity
Increase thought leadership
downloads
Increase revenue for product A by 20%
in EMEA strategic accounts
Add 12 new customers from key
target list
Get 3 meetings with executives at
ABC Company
Increase share of preference by 5%
Book 5 initial sales meetings with prospects
who responded to the thought leadership
call to action

Establish a clean data chain between marketing activities,
marketing objectives, and business outcomes
Business
Outcomes
Secure net new orders
from the EMEA segment;
14% market share and
company category
ownership of 25%
Marketing
Objectives
Improve new
platform trial rate
among Tier 1 EMEA
accounts by 35%
resulting in 5 RFQs
Marketing
Programs
Recruit and train 50
customer ambassadors
who tout new platform
to at least 13 potential
targets
Marketing
Tactics
Initiate online activities
that touch 5,000 EMEA
customers and
produce over 50
potential customer
ambassadors for new
platform

Use your data chains as the foundation for your dashboard
Report results
on three levels:
 Executive
 Operational
 Functional

In which direction is your marketing organization moving?
Marketers earning a seat
at the “table”
Marketers supporting
sales
Remember: Marketing performance
metrics and reporting should enable
better alignment between marketing
and the BUSINESS
(not just marketing and sales)

To be more relevant to the business,
marketers need to measure and
communicate the right metrics
 Get clarity around the business outcomes:
What needles does marketing have
to move?
 Select the right metrics: Outcome-based,
leading indicators, and predictive
 Set quantifiable performance targets
 Establish a clean data chain between
marketing activities, marketing objectives,
and business outcomes
 Use your data chains as the foundation
for your marketing dashboard

Thank You!Julie Schwartz
Senior Vice President
Research and Thought Leadership
ITSMA
jschwartz@itsma.com
+1-781-862-8500, Ext. 112
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

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