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

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. 2

Page 1

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. 4

Page 2

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 Council's 2008 Marketing Outlook
from metrics and dashboards to performance.
steer their ship.


Page 3

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


Page 4

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™


Page 5

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

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

Page 7

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


Page 8

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


Page 9

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)

Page 10

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


Page 11

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: It's 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


Page 12

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

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