Despite the emphasis on and progress in marketing performance measurement and management (MPM) over the past decade, research continues to show that the link between marketing and the business still needs to be stronger and clearer.
As a result, the pressure on marketing to show its impact on the business, demonstrate accountability, and communicate its value continues to intensify.
Marketers who use performance-management best-practices are best positioned to manage the pressure. Their organizations adopt and leverage several best practices, including creating a performance-measurement system, linking marketing to business outcomes, and intelligently setting performance targets that are relevant to the organization's objectives and outcomes.
Setting performance targets is a critical component in developing an MPM framework and system. Let's use an example to illustrate the concept of a performance target.
Which of the following marketing objectives is the most measurable and has a specific performance target?
- Build consideration among early adopters in the small to midsize business (SMB) segment.
- Increase referral rate of current Tier 1 customers by 40% by the end of the year.
If you selected the second, you are correct. Marketers who embrace performance management—the process of measuring the progress toward achieving key outcomes and objectives in order to optimize individual, group, or organizational performance—realize that setting performance targets is a key part of the process.
Performance management enables Marketing to transform into a performance-driven organization.
What characterizes a performance-driven marketing organization? Performance-driven organizations consistently demonstrate the following five traits:
- They establish and work from clear standards of performance and metrics.
- They align resources, policies, and practices around standards of performance.
- They track and report results against their performance standards.
- They use data and performance targets to drive continual improvement.
- They use analytics to facilitate fact-based decisions.