The necessity of marketing was proven long ago, but the ability to measure its contributions to specific objectives has eluded organizations. The recent economic environment has placed extreme pressure on marketers to evaluate the performance of investments in a range of brand, category and demand-generation processes to ensure that marketing budgets are spent wisely. In recent years, marketing departments have tended to view its spend in terms of cost avoidance and cost reduction; now, as conditions improve, they can become more confident in strategic and tactical investments to further organizational objectives. New approaches and tools can simplify marketing processes, both internal and external, to deliver results on those objectives in timely fashion.
To measure the value of marketing investments, a range of analytics are available that help produce metrics to manage and optimize its processes and track progress to objectives. I recently pointed out that doing this is a top priority of innovative organizations (See: “Sales and Marketing Operations and Management in 2010”), and some are acting on it. But many industries still hold to their old ways of conducting marketing activities using estimates rather than clear measurements of achievement, and they cannot monitor the effectiveness of their investment, let alone direct its progress.
To really understand their existing investments and processes, marketing organizations should not just measure them in hindsight but also project future results using predictive analytics and planning. This advanced type of analytics can be used to build propensity models that can predict, for example, the likelihood that customers will respond positively to an offer that will improve the company’s brand ranking or category market share. Another key analytics is measuring the contribution of marketing generated leads to closed business by sales and determining effectiveness of efforts. Using analytics in this regard, marketing can build key performance indicators that provide visibility into processes and contribute to reaching strategic objectives and specific goals for markets, customers, sales and finance. For example, marketing should know how much its spend influences customer satisfaction scores and promotes a positive customer experience or shortens the time it takes to reach financial margin objectives.
Marketing analytics can span a range of brand, category and demand-generation processes that consume large portions of a marketing organization’s resources and investments. They also can be applied to new channels for marketing across social media, which require even faster cycles and knowledge of the marketing ROI to guide new investments. Having the right metrics to guide future investments and track and improve performance can build confidence not just in marketing but also in sales and finance, which depend on the success of marketing. This focus on analytics might seem obvious but alludes most marketing organizations who do not improve its competencies and processes by using dedicated technology to deliver the information to guide its actions.
If you are trying to optimize marketing processes and deliver strong results in specified timeframes, I encourage you to participate in our latest benchmark research on marketing analytics. What you learn from the results can help drive improvement in your organization.
Mark also blogs at VentanaResearch.com/blogs.