Marketing Metrics · PDF fileDesign and select metrics that measure marketing‟s impact on the business Ground metrics in data and analytics Use metrics that measure efficiency,

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Gaining Insight Into Marketing Results: The Value of a Marketing

Dashboard

Laura Patterson

President & Author

[email protected]

Improve Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2010 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 2

Founded in 1999 and headquartered in Austin, TX, VisionEdge Marketing, Inc. serves more than 100 customers, and counting.

VisionEdge Marketing, Inc. is a data-drivenand metrics-focused marketing firm

that specializes in improving marketing performance and creating competitive advantage designed to attract, secure and retain profitable customers.

Services Include:

Marketing performance management

Marketing and sales alignment

Product and strategic marketing

Pipeline re-engineering

Professional development

About VisionEdge Marketing – Experienced Practitioners


Session Objectives

1. The State of

Marketing

Performance

Management

2. The Role of

Marketing Ops in

MPM

3. Marketing Ops MPM

Roadmap and Tools

4. The Dashboard –

the ultimate

performance

management tool

““Need the math behind the creativity,”

John Seifert, chairman-CEO of Ogilvy & Mather North America

“The top challenge for marketers remains to better quantify and measure the value of marketing programs," in spite of improvements in accountability over previous years. CMO Council

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The Business Climate Remains Challenging

Tough economic

environment

Constant change

Tougher buyers

More competition

Increasing

complexity

Reduced business

investment

Overall we're seeing sales cycles

getting longer –

• 7% of sales executives report a

more than a 25% increase in the

length of their sales cycle

• 8% of sales executives report that

they now need 25% more leads to

close a deal.

(IDC 2009 Tech Sales Barometer, released

January 2009 and CSO Insights)


Increased Focus on Accountability

Marketing is under increasing

pressure to:

Show impact on the

business

Demonstrate

accountability

Communicate its value

“While proving ROI on marketing

performance is nothing new, the

recession increased the emphasis on accountability and analytics, and this

will continue even as a recovery gets

under way.” BtoB 1/18/09)


Why Companies Invest in Marketing

Understand the market and customers

Develop and execute a strategy to create

preference and consideration that enables the

organization to

Acquire more of something

Acquire it faster

Acquire it cheaper

Otherwise, might as well just put more feet on the

street

Need to demonstrate we are “getting the job

done”

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Marketing’s Job is to Produce

1. Find Profitable Customers

The process of acquisition

New customer acquisition – net new

business

2. Keep Profitable Customers

The process of retention/renewals

Engaged customers more likely to

renew

3. Grow Profitable Customers

The process of increasing the value of

your customer franchise and brand -

cross-selling


These Three Roles Relate to What Matters in Business

Find/SecureProfitableCustomers

Acquisition

KeepCustomers

Penetration

GrowCustomer

Value

Monetization

Market Share Lifetime ValueBrand/

Customer Equity


Best-in-Class Marketers Leverage These Capabilities

Measurement Competence

Analytics and Skills

More Strategic Metrics

Better Tools and Process

Nearly everyone says

business with existing

customers is important, few

use metrics such as•length of customer tenure,

purchase frequency and

recency, value of the overall

customer base, customer

lifetime value and share of wallet

•Other than leads to

conversion, track little else.

(VEM 2009)

•“Shockingly low investments in marketing technology and still immature processes” (IDC Dec 2008)•“Real success will come from being smarter and more strategic in operations” (B-B 2009)

“Lack employees with specific marketing analytics expertise”(Forrester 2008)“Less than half of respondents use analytics”(Alterian 2009)

“Pressure has mounted on marketers to accurately predict, measure, and optimize results”(Marketing Sherpa 2009)

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These Organizations have Made A Transformation

To Being Performance Driven - They

Design and select metrics that

measure marketing‟s impact on the

business

Ground metrics in data and analytics

Use metrics that measure efficiency,

effectiveness and payback

Create a measurement management

system and consistently use it

Capture performance metrics as

quickly as possible in order to instigate

immediate change in execution

Report results and performance in real- time

Performance Management

…the process of measuring progress toward achieving key outcomes and objectives in order to optimize individual, group or organizational performance.


Have a set of measurable

performance standards, a pointed

focus on outcomes, and clear lines of accountability - all of which are

important if a marketing organization wants to prove its value.

What is a Performance-Driven Organization?


5 Characteristics of a Performance-Driven Marketing Organization

1. Established clear standards of performance and metrics

2. Aligned resources, policies, and practices

3. Results tracked and reported against performance standards

4. Data and performance target are

used to drive continuous improvement and to hold the entire system accountable for performance.

5. Analytics are used to facilitate fact-

based decision making

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The Rewards of a Performance-Driven Marketing Organization

Better insight into customers – what they

want and what messages will resonate

Greater message continuity

More effective allocation of resources

Fewer underperformers on the sales

team

Higher win rates

Improved customer acquisition and retention

Stronger customer loyalty and equity

Greater customer share of wallet


Performance-Driven Marketing Organizations Adopt Five Best Practices

Create a performance measurement system

based on data and analytics

Adopt a framework that identifies metrics that

impact organization‟s economic performance and strengths

Link marketing to business outcomes

Embrace a culture of accountability

Add the right skills, systems, and tools


Hence the Emergence of Marketing Operations

Marketing Ops owns the processes, infrastructure and reporting that enables

Marketing to operate more like a

business, with formalized

At a minimum, Marketing Operations

should:

1. Drive the processes for budgeting and investment decisions and more effective

strategic planning.

2. Identify and implement the required infrastructure to maintain the consistent implementation of processes.

3. Lead the charge for marketing

performance measurement processes.

Marketing Operations

Defined:

An operational discipline

that leverages processes, technology, guidance and

metrics to help run the

Marketing function as a fully-accountable

business.

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Marketing Ops – Organizational Glue

Reinforces the marketing strategy and tactics with a scalable and sustainable infrastructure, to

create and nurture a healthy, collaborative

ecosystem, and to help derive achievement of

the enterprises business outcomes.

Provides the infrastructure and policies that are

necessary to coordinate marketing activities.

Assures that both the marketing spending and

the marketing mix are based on solid financial

terms.

Serves as an interpreter by translating the

languages between the marketing and finance.

Operates with a performance dashboard that is

consistent with the enterprise‟s strategy m

Facilitates the translation between budgets, marketing activities, and accomplishments into

a language that is meaningful to finance and

the rest of the leadership team.


Six Steps for Creating a Marketing Ops Function


Marketing Ops Roadmap Components

DataProcessApplications

SystemsTools

Organizational StructureOrganizational PrioritiesMarket and Competitive

Assessment

PlanningProcess Engineering Analytical

Target SettingMeasurementBenchmarking

CharterScopeResponsibilities

RoleTiming

PlanResourcesAdoption Management

MaintenanceBenefit TrackingCost and Timing

Marketing Operations

StrategicContext

CapabilitiesAssessment

Business Case and Functional Design

Implementation

People AlignmentCulturePolicies

Change Management

Infrastructure

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Marketing Ops – The Science Side of Marketing

1. Defines strategy and align initiatives, metrics, people and tasks with the

organization‟s business outcomes

2. Works with the marketing leadership team in the development of the marketing plan

3. Supports marketing personnel to ensure they are focused on and

measuring their contribution to the

marketing objectives, strategies, programs and activities

4. Monitors the marketing organization‟s progress against performance targets and detects gaps and problems

5. Measures performance using key performance indicators (KPIs) so that

issues and gaps can be resolved early

Marketing opsis pivotal to transforming Marketing into a performance-driven organization.

It plays an instrumental role on your road to marketing excellence.


Marketing Ops Facilitates Accountability

Accountability by its very

nature means Reporting

A monitoring and reporting results enables fact-based

decisions

Marketing Ops is instrumental in creating

and managing the

dashboard


AMA Defines of Marketing Accountability

Truly accountable

marketing requires

that marketers

demonstrate

alignment between

marketing

expenditures and

anticipated results,

and that this

alignment is being

audited and

optimized.

“The responsibility for the

systematic management

of marketing resources

and processes to achieve

measurable gains in return

on marketing investment

and increased marketing

efficiency, while

maintaining quality and

increasing the value of the

corporation.”

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A Marketing Dashboard – Key to Accountability

Has all the necessary dials and gauges to tell you where you are, where you‟re going and at what speed –along with indicator lights that illuminate at the first sign of a problem

Enables organizations to measure, monitor and manage business activity using both financial and non-financial measures

Provides an overview marketing goals and objectives, and real-time insight on progress toward each objective


What is a Dashboard?

A „multidimensional‟ view

of data and their

interrelationships.

Executive dashboards are

essentially designed to

provide summary views of

data and alert users to

values that are

significantly above or

below expectations

demonstrating the

strategic value of

marketing.

“A dashboard is a visual

display of the most

important information

needed to achieve one or

more objectives;

consolidated and arranged

on a single screen so the

information can be

monitored at a glance.”Stephen Few, Information Dashboard Design (2006)


The Marketing Dashboard – The Ultimate Performance Management Tool

Metrics and KPIs (key

performance indictors) are

the building blocks for

creating a dashboard

Dashboards and

Scorecards

Multilayered performance management systems that enable organizations to

measure, monitor and manage business activity using both financial and non-financial measures

Categories for the Marketing

Executive Dashboard

Customer Acquisition and Retention

Customer Advocacy and Value (LTV, Margin, Loyalty, Share of Wallet)

Customer Equity

Product Innovation and Adoption

Competitive Positioning/Market Value Index (share of

preference, rate of growth)

Remember the Money

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Use the Dashboard To

Show how marketing is moving

the needle

Assess what is and isn‟t

working

Foster decision making –

is actionable

Provide a unified view into

marketing‟s value

Enable better alignment

between marketing and the

business

Translate complex measures

into a meaningful and

coherent set of information

Dashboards only

work if they are tied

to a structured action

process

It must do more than

just measure, needs

to be used to foster

decision making


Metrics are the Foundation

Choose Metrics that Matter –need to be relevant

Start with the organization‟s

core business outcomes

Clarify how marketing objectives and initiative contribute to the outcomes

Assess your data

Select metrics that measure the contribution –effectiveness, efficiency,

value

Every metric on your dashboard should clearly connect marketing to the outcomes

Remember find, keep and grow

New customers – number, rate,

etc.

Executive Level Metric –

New Customer Acquisition

Rates and Product

Adoption Rate

Operational Level Metric –

Number and cost of qualified leads and Trials

Functional Level Metric –

Program performance

Top Line Revenue as an

outcome

Executive Level Metric -

Operation Metric – Pipeline

Contribution


Dashboards Take Analytics

Analytics

The Ability to Drive Actionable Insights from Data

Critical to facilitating better and faster fact-based decisions

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Analytics Take Data

Performance Management Organizations:

Embrace data - See Data as the foundation for success

Get the best data possible and use it in a pre-defined, unbiased way

Install and use a data management system

Create and maintain a data inventory


Dashboard Data Chain

Activity results vs targets & costs

Program results vs targets and cost

Objective results

Outcome results& value


The Metrics Framework Helps Develop the Dashboard:

Executive level Strategic level – monitors

and measures performance against business outcomes and marketing objectives

Operational levelMarketing management – tracks performance of

core marketing strategies and processes

Tactical levelFunctions and individuals – analyzes performance at project or activity level as they relate to the first two

Marketing Dashboard Layers

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The Making of a Dashboard

Outcome,

Objective,

Metrics and

PerformanceTarget

Development

Data

Collection

and

Assessment

Alpha Dashboard

Review and Revise

BetaDashboard

Review AndRevise

PilotDashboard

Review and

Revise

ProductionDashboard

The development of a marketing executivedashboard entails these steps.


Dashboard Questions To Address

Will it be corporate-wide or unit specific?

Who will be responsible for inputting data and keeping the Marketing Dashboard current?

Where will this data be housed?

How will it be accessed? Which key stakeholders in the organization need

to be involved? Will the Marketing Dashboard be introduced in

selected geographies or rolled-out globally? Will it involve internal metrics, external metrics, or

both?


Why Isn’t This a Dashboard?

Can you tell how marketing is contributing the business?

Can you assess what is and isn‟t working?

Can you make a decision?

Do you know where the gaps are and what is causing them?

Design and develop new merged intranet site

Implement guidelines for continuous improvement of marketing and sales intranet site

Program #4

Automated Online Direct Marketing

Program #5 - Create four regional Marketing Programs

Set up Profoma (Access to online direct marketing

materials - customized, printed, shipped & tracked)

Link to Virtual Warehouse

Define Markets requiring emphasis, implement direct

marketing program

Evaluate Mid-west BAXSaver opportunity

Enhance access and ease of use

Maintainance and create new materials needed

Corpoarate Capabilities Presentation

Program #6

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Make the Dashboard Actionable

The usefulness of a dashboard is in the

precipitation of action to correct performance variances therefore it is

essential to know what conditions trigger

action

Set thresholds for alarms/alerts

Look at trends as well as current data

Pre-define response actions for yellow and

reds alerts

Establish standardized rules for reporting

variances and corrective actionImprove Your Probability for Success ™ | www.visionedgemarketing.com | ©1999-2010 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 35

Business Outcome Level Example – Two Outcomes

Market Share

Category Ownership

0

5

10

15

20

25

30

35

Time

Ma

rke

t S

ha

re

Market Share Performance to Target

Market Share Target

Enterprise actual

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

FY08 1Q09 2Q09 3Q09 4Q09

Re

ve

nu

e

Time

Enterprise Performance to Actual

# 1 Player Target

Enterprise Actual


Marketing Objective Level Example –Two Objectives – Margin and Marketing Contributed Deals

MarketingContribution

01002003004005006007008009001000

0200400600800

100012001400160018002000

2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09

Co

st

Leads

Time

Market Share Outcome Lead and Cost Performance

Qualified lead target

Qualified lead actual

Margin – Number of Opps and Cost

0

200

400

600

800

1000

1200

1400

1600

1800

2000

0

20

40

60

80

100

120

140

160

180

2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09

Leads

De

als

Time

Market Share Lead and Deal Performance

Marketing Deals Target

Marketing Deals Actual

Qualified lead target

Qualified lead actual

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Campaign Level Example – Margin and Opps

Market Share Initiative: Campaign XYZ Lead to Cost Performance

02468

10121416

Qualif

ied

lead t

arg

et

Qualif

ied

lead a

ctu

al

cost/

qualif

ied

lead t

arg

et

cost/

qualif

ed

lead a

ctu

al

Leads

0

200

400

600

800

1000

1200

Dolla

rs Leads

Cost

0

0.5

1

1.5

2

2.5

3

3.5

0

2

4

6

8

10

12

14

16

Marketing

Deals Target

Marketing

Deals Actual

Qualified lead

target

Qualified lead

actual

De

als

Lead

XYZ Campaign Lead to Deal Performance

3Q09

4Q09

Actual to targetresults and costssignificantly off –

what would you do?


Make the Data More Meaningful

Marketing programs are investments that are intended to

deliver specified benefits –

dashboard data needs to

indicate when one or more benefits are at risk

Define the alerts

green means something is

within target performance,

yellow means something is

outside of target

performance (on functional

level could indicate a schedule or cost overrun),

red indicates a serious

variance or deficiency that signifies potential failure

What needs alerts?

Whether actual performance is not

keeping up with planned performance

Whether actual costs are out of line with the expected costs AND

outside ROI parameters

An increase in yellow alerts

usually indicates worsening conditions

An increase in red alerts usually indicate corrective action is not working


Dashboard Elements

Alert Icons – indicates the condition of the KPI

Trend Icons – represents how a KPI is behaving over time

Progress Bars to indicate relative progress toward a positive quantity in a real number

Gauges – uses to assess both positive and negative values along a relative scale

Bar Charts for categorical analysis

Line Charts to show progress of one or more measure over time

Tables and Lists – for non-numeric data or data that has relationships not easy to visualize – use for data that doesn‟t lend itself to easy numeric analysis

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Using Alerts

Length of engagements

Expanding, cost to serve

increasing

1Q09 2Q09 3Q09 4Q09 1Q10

RFID 40 35 50

Govt & PubSafety 195 335 515

Route 15 50 105

Healthcare 245 350 400

Retail 500 400 550

00.20.40.60.8

11.21.41.61.8

Reven

ue b

y S

eg

men

t P

art

ner

Th

ou

sa

nd

s

Overall partner revenue is up only slightly

over same period prior year, however the

number of partners is down, from 257 to 238.

2 2 3 21

44

40

11 2

0

1 02

0

0 1

2

1

02

4

3

4

3

4

0

5

10

15

20

25

Q1 Q2 Q3 Q4

Mfg/Whs Retail Healthcare Route PubSafety RFID Other

Marketing lead gen focus

on RFID is paying off.

0

5

10

15

20

25

Ne

w P

rod

uc

t R

ev

en

ue (

%)

Launches producing better

product adoption rate

0

200

400

600

800

1000

1200

1400

1600

closed

open

total

Service Engagements


Things to Remember

Develop a Dashboard that:

Shows how marketing is moving the needle

Helps assess what is and isn’t working

Fosters decision making – is actionable

Provides a unified view into marketing’s value

Enables better alignment between marketing and the business

Translates complex measures into a meaningful and coherent set of information


Wrap Up, Thank You and Questions

Focus on accountability is

not going away

Performance management takes new skills and data

Marketing Ops is a pivotal

role for the performance-driven marketing

organization

Dashboards fall within the domain of marketing ops

and are the ultimate performance management

tool

Documents

Marketing Metrics · PDF fileDesign and select metrics that measure marketing‟s impact on the business Ground metrics in data and analytics Use metrics that measure efficiency,