PJA Blog: The Complex Brand

My title refers to an interesting (but not surprising) statistic from High-Performance Marketing, a recent book by Naras Eechambadi of Eloqua: a Forrester study found that only 37% of executives considered their marketing organizations to be strategic and to deliver measurable value. This trend cuts across industries, but seems intensified in B2B. Marketing is where failed salespeople are sent out to pasture, where bored technologists get a second chance, where “marketing chicks” indulge their creative passions in colorful direct and collateral programs that deliver icy-cold leads to a sales force that summarily writes them off (the leads and the marketers). We’ve heard and seen them all. What’s worse, marketing does itself no favors by allocating its monies against a pre-set media mix rather than against customers and prospects, who’s adding profitability now and in the future. And so on.

Eechambadi makes several great points in the measurement chapter of his book. A few highlights:

* Marketing has a real opportunity to take a lead position in the company in identifying trends and de-politicizing marketing decisions through the rigorous collection and application of measurement data.

* Marketing should be able to measure response rate, retention, cross-sell ratio, cost per lead, and customer satisfaction at the least, but also to tie these meaures to financial metrics (tying response rate to incremental revenue, retention to higher profitability, cross-sell to higher revenue, cost per lead to reduced acquisition cost, and customer satisfaction to reduced services costs).

* Measurment must be relevant, visible and drive improvement. In other words, it should show causal linkages between measures and results, must clearly communicate impact to executives outside marketing, and guide actions, such as shifting investment from acquisition to development when that’s necessary.

It’s a formidable challenge to become a great measurement-based marketer, but Eechambadi is realistic. Just get started. Build a measurement model based on common sense and business objectives (awareness, consideration, inquiry, purchase, expansion), start gathering relevant data (use the Web, build a customer panel), and determine the measurement dimensions that make sense for your company. For example, focus on leading indicators such as a promoter score: what percentage of your customers would actively recommend you to colleagues in other companies, a measure much more relevant than mere satisfaction.

Mike O’Toole’s post from Friday December 1st critiquing advertising as a faith-based initiative is the perfect set-up to a renewed focus on measurement (he also references Eechambadi’s book). If the future of advertising is now, stop measuring it using yesterday’s mindset and measures. After all, it’s budgeting season in the marketing world.

This entry was posted on Sunday, December 3rd, 2006 at 9:22 am and is filed under Measurement. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.