Presentation at the ARF Engagement Council.

1. © 2008 MarketingNPV LLC. All Rights Reserved.
How Do You Measure
Engagement?
The Behavioralist’s
Perspective
ARF Engagement
Committee Meeting
May 22, 2008

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© 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

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© 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

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© 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

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© 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

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© 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.

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© 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.

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© 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.

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© 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.

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© 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

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© 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?

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© 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”.

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© 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. © 2008 MarketingNPV LLC. All Rights Reserved.
www.MarketingNPV.com
Pat.LaPointe@MarketingNPV.com