This month only: Save $100 on PRO with code OCTOBER »

Real-World Education for Modern Marketers

Join Over 608,000 Marketing Professionals

Start here!
N E X T
Text:  A A

Three Key Investments for Improving Marketing Effectiveness and Accountability

by   |    |  2,997 views

According to the IT Services Marketing Association, marketing budgets as a percentage of revenues are at an all-time low. Until we marketers can demonstrate marketing's contribution to business results, we will continue to struggle with inadequate budgets.

Unfortunately, we're in a Catch-22: We need to make investments in order to measure and improve marketing performance, but we can't secure the necessary funding until we can demonstrate marketing's value.

According to a spring 2010 study by the analytics firm Lynchpin, over half of the responding companies indicated that the biggest barrier to an effective measurement strategy is a lack of budget and other resources; fewer than one-third selected any other issue.

How can we break out of the vicious circle and improve our effectiveness and accountability?

  • First we need to synchronize marketing activities and costs with business outcomes. That alignment effort should be incorporated into the marketing planning and budgeting process.
  • Next we have to make sure we have the right skills, infrastructure, and performance management systems in place. This step often takes investing in three key areas: training, infrastructure, and benchmarking.

Invest in training your people


A recent study by Omniture confirmed what we found in our annual marketing performance and measurement (MPM) study: Although marketers said it is important to measure marketing cost, orders, average order size, and conversion rate, they tend to track the metrics they have the greatest ability to measure.

Why are marketers struggling to move from measuring metrics to measuring performance? According to the Omniture study, the biggest challenge is talent. Many marketing organizations lack staff with adequate analytics expertise.

Why? Budget constraints.

Inadequate funding was the No. 1 reason cited by respondents to the Omniture study for the lack of marketing talent in their organizations. More than half of respondents indicated that they don't have the training and support they need.

Invest in your infrastructure

Marketers need useful information from multiple data sources to facilitate better decisions. They must be able to translate insights from analytical systems immediately into marketing decisions and then use operational systems to execute on these decisions.

The customer-centric marketing organization leverages various types of customer data—information from marketing databases such as customer profile information and segment data, customer transaction history, and communication history along with lead-scoring models. In addition to data that can be acquired from such internal sources, Marketing needs external data related to the market and competitors.

All this data requires systems that can both recognize the same customer/prospect across different channels and access and update information in real time. Real-time and near-real-time updates alone require fundamental changes in how marketing databases are designed, managed, and analyzed. The organization will need to be able to revise business rules and execute analytics and update models as quickly as new data becomes available.

A key challenge is that the entire marketing infrastructure is increasing in complexity at the same time that speed has become a dominant requirement. As a result, marketing systems and processes need capabilities an order of magnitude better than those most marketing organizations are using today.

The bottom line: marketing organizations need to revisit and invest in their infrastructure.

Invest in benchmarking

A benchmark is defined as the standard by which all items of similar nature can be compared or assessed. Benchmarking is a self-improvement tool. It allows you to compare yourself with others, to identify areas of comparative strengths and weaknesses and learn how to improve. Benchmarking is a way of finding and adopting best-practices.

We're still baffled by how few marketing organizations do any benchmarking. Only a third of the respondents to our annual MPM study indicated they were satisfied with their marketing performance skills, yet 60% of the respondents don't audit data, analytics, performance target setting, systems, processes, measurement, or reporting.

Robert Camp, who published the first book on benchmarking, suggests that by using benchmarking to identify and replicate "best practices," a company can enhance its business performance.

If improving your marketing performance is important to your organization, then it's time to invest in benchmarking.

* * *

In a matter of months, many marketing organizations will begin to work on their next fiscal-year plan and budget. Now is the time to take stock of your talent and infrastructure, and how you stack up against peers and best-in-class performers, so you can request the funds needed to improve your marketing organization on all fronts.


Join over 608,000 marketing professionals, and gain access to thousands of marketing resources! Don't worry ... it's FREE!

WANT TO READ MORE?
SIGN UP TODAY ... IT'S FREE!

We will never sell or rent your email address to anyone. We value your privacy. (We hate spam as much as you do.) See our privacy policy.

Sign in with one of your preferred accounts below:

Loading...

Laura Patterson is president and founder of VisionEdge Marketing. For 20+ years, she has been helping CEOs and marketing executives at companies such as Cisco, Elsevier, ING, Intel, Kennametal, and Southwest Airlines prove and improve the value of marketing. Her most recent book is Metrics in Action: Creating a Performance-Driven Marketing Organization.

Twitter: @LauraVEM

Rate this  

Overall rating

  • This has a 5 star rating
  • This has a 5 star rating
  • This has a 5 star rating
  • This has a 5 star rating
  • This has a 5 star rating
2 rating(s)

Add a Comment

Comments

  • by Tushita Roy Thu Jul 8, 2010 via web

    Interesting.......topic

  • by Rodrigo Mon Jul 12, 2010 via web

    Thanks!

MarketingProfs uses single
sign-on with Facebook, Twitter, Google and others to make subscribing and signing in easier for you. That's it, and nothing more! Rest assured that MarketingProfs: Your data is secure with MarketingProfs SocialSafe!