Ever wonder why marketing departments are the first to have their budget cut? The answer lies in the poor job that most marketing leaders—and their departments—do in to tying their efforts to the bottom line.
In recent years, increased pressure on marketing accountability has spawned a growth industry of firms, system providers, conferences, and books on the topic of marketing effectiveness. All of these resources aim to improve the marketing efforts of businesses, which is an essential step toward maintaining positive growth.
However, the scramble to justify budgets can also result in a hyper focus on short-term metrics associated with ROI rather than a long-term sustainable path to continuous improvement.
Such short-term focus on ROI is not inherently bad and in fact often leads to substantial improvements to the marketing effort by recognizing quick fixes to existing tactics and beneficial shifts in marketing mix.
But marketing leaders should be asking not just how to measure effectiveness today but also how to improve marketing efforts week over week, month over month, and year over year. By committing to continual improvement and using a holistic approach, marketing can move from a defensive posture to a leadership position within the organization.
The path to continually improving marketing effectiveness involves understanding and addressing three key interrelated foundational areas: selecting the right metrics, optimizing marketing operations, and maximizing customer value.
Measurement: Selecting the Right Metrics