Part 3: Analytics & Reporting
Part three in our series on marketing operations focuses on measurement, the reason for the emergence of marketing operations. If you remember, marketing operations emerged because there was a need for a more ‘accountable’ view of marketing.
For most executives, accountability means ROI or a more precise measure ROMI (return on marketing investment). Even though most modern marketers will point to KPIs (key performance indicators) and program metrics, the truth is that executives still want to see how marketing is affecting their bottom line.
Is marketing a cost center or revenue driver and how do marketing leaders prove their team’s value?
When it comes to measuring the success of your marketing efforts—there are a few things you can do. I start by setting realistic outcomes for each marketing action, then breaking each down and outlining a game plan. Here is how I do that:
Stage 1: Business Objectives
As an agency we are usually engaged with the marketing team in most firms, sometimes we also deal directly with the business owner/leadership team. Regardless, we insist on understanding (preferably from the executive team) their business imperatives along with their objectives for the business. That can be anything from improving employee engagement to building a better customer experience.
Once you think you know, WRITE THEM DOWN, and get buy in from the executives. This is what some companies refer to as the ‘interlock’ process. Simply put, it’s gaining agreement. Once you have it, you can set aligned marketing priorities and build marketing programs.
Some examples of business objectives are:
- increase revenue growth
- improve employee engagement
- improve customer experience
- expand global reach
Stage 2: Marketing Priorities
After you have defined the company’s objectives, marketing should have a clear direction about what is most important. The first step should never be missed or the outcome/s will not matter to the executive team and the marketing department/agency success will fall flat.
Most marketing departments are responsible for supporting internal customers (sales, HR, corporate, etc.) and external customers (prospects, existing customers, past customers), so there is no shortage of work to be done. That is why the marketing priorities that you set are called priorities—they are the ones that are aligned directly with the business objectives and the ones you should measure.
The challenge is the balancing act – because so many day-to-day responsibilities fall on marketing, especially in companies that consider their marketing department a cost center, selecting a maximum of 3-4 marketing priorities will assure success. After defining the marketing priorities sit down with the same executive team and ‘interlock’ again. During this interlock, define the marketing budget, using our Marketing Budget Planner.
Some examples of aligned marketing priorities are:
- Building an iconic brand
- Enabling your sales team
- Developing a new employee on-boarding system
- Improving online customer experience
- Generating leads for high gross margin Product X
Stage 3: Key Tactics
Once you have those priorities set, you can begin to assign tactics. This is where you think about those marketing initiatives, projects or programs that will help you achieve the marketing priorities. During this stage look at the size of your team, skill set of your resources and technology you use to help select tactics that you can actually execute. Hold an internal marketing ‘interlock’ session, one of my client’s once called a charrette (love this word) and build your tactical marketing calendar/plan.
This phase is all about execution, and many great companies or departments in large organizations fail because of poor execution. At this time I will plug, my final post in this series on Process, which I will be posting in a few weeks. Having a good sound marketing process to execute tactics helps make execution less daunting on lean marketing organizations.
Some examples of marketing tactics are:
- Write three thought leadership whitepapers
- Launch new user interface for customers
- Build an online collaboration tool for employees
- Develop a sales playbook for new product X
- Run five events with local chamber of commerce
Each of these tactics can be measured. The outcomes of these tactics will be seen as KPIs (key performance indicators). These are metrics that you will measure along the way to makes sure your overall marketing strategy is on target to achieve the success that you set out with your executive team.
There are a lot of tools to measure marketing tactics – in fact, we developed our own Digital Marketing Scorecard that houses all types of metrics you can measure that indicate the success of a digital marketing program.
Stage 4: Responsibility
This may be a moot point if you are a team of one, but if you are leading a marketing department or agency that has more than just one, it is now time to assign the person responsible for executing the tactics.
At this time too it is important to review what resources are working on because if they are not working on one of the marketing priorities the accountability of marketing is at risk. Remember we started this post talking about the importance of measuring marketing, so it in order to do so it is important that you stick to this game plan. That is another reason why we ‘interlock’ at each stage.
Before I move on, I do want to acknowledge that I am making this process seem very easy on paper, but the truth is that as I stated earlier while modern executives want marketing to be a revenue driver, they still rely on marketing to wear many hats and work on many non-revenue driving projects. Because of this truth, it may be hard for you to assign 100% of a resource to marketing priorities that you have defined. Like everything be realistic, hope that your marketing resource will be spending 75% of his/her time on the defined marketing priorities and 25% on non-priorities. Make this clear during ‘interlock’.
Stage 5: Assign Measurement (outcomes)
So this is the section that this post is centered around, but I just couldn’t figure out how to jump here without going through the different stages. This is where outcomes come into play. Once you have defined your marketing priorities and made sure that they are aligned with the business objectives, you can set your measurement for each one. In some cases, there may be more than one measurement.
You will hear marketers use all different terminologies to measure their business – they look at metrics, KPIs, ROI, ROMI, program metrics, financial metrics – the list goes on. My perspective is that if you follow the stages in this game plan, you’ll have an easier time coming to agreement on which measurement is the most useful for the executive team. This is probably the most important ‘interlock’ you will have. We need to all be on the same page when it comes to WHAT SUCCESS LOOKS LIKE for the company– not for marketing, not for sales, not for HR, not for product, but for the company!
Some examples of strong outcomes for measurement are:
- Marketing employee satisfaction survey increase of 15% YoY
- 25% increase in use of customer portal
- 50 new leads generated for new Product x resulting in $500,000 in pipeline revenue and shortened sales cycle by 20 days
I purposely used the word ‘interlock’ a lot, during each of these stages, because it is critical to the success of marketing. In order for marketing to measure themselves, they have to make sure they are measuring outcomes that are important to the company. The best way to do this is to provide transparency to your stakeholders, pull the curtain back and involve them in your planning for success.
The best thing that marketing can do for itself is to gain visibility through an interlock process. So even if you are a team of one, make sure that the executive team at your company is in agreement with you at every stage. This will help build confidence in the outcomes marketing will achieve. It will make the process more collaborative as everyone has skin in the game. And it will achieve the accountability and visibility into marketing that the executive team expects, helping to avoid them from relying solely on ROI. Here is an article on the marketing ‘interlock’ process, which I found to be very interesting and useful.
We have developed a template that will help you apply these stages to your own company, you can download it here.