2014 ITSMA/VEM Marketing Performance Management Survey The Link Between Marketing Performance Management and Value Creation

Note: This Abbreviated Summary highlights some of the significant findings from 2014 ITSMA/VEM Marketing Performance Management Survey:

The Link Between Marketing Performance Management and Value CreationA more in-depth analysis can be found in the full report available for purchase at:

http://www.itsma.com/research/2014-itsma-vem-marketing-performance-management-survey/

Abbreviated Summary | May 2014

The Link Between Marketing Performance Management and Value Creation

2014 ITSMA/VEM Marketing Performance Management Survey

Julie Schwartz, Senior Vice President, Research and Thought Leadership, ITSMA

Laura Patterson, President, VisionEdge MarketingDianne Kim, Research Associate, ITSMA

©ITSMA/VEM 2014 Marketing Performance Management Survey. All rights reserved. Not for reproduction or redistribution without permission.

Study HighlightsThe SituationDespite marketers’ perceptions that they are improving, the percentage of “A” marketers has remained relatively constant.

Marketers must move from campaign producers and sales enablers and seize the role of business value creators. Until marketers speak the language of the business and demonstrate value, they will be viewed as overhead.

The Right Mindset1. The “A’s” believe they can measure marketing’s

value and make it a priority

2. The “A’s” hold themselves accountable, even if senior leadership does not

3. The “A’s” have a plan for continuously improvingmarketing performance management

Nailing the FundamentalsIn addition to the right mindset, the “A’s” have nailed the 5 fundamentals for aligning marketing activities to business results

The value creators: Get clarity around the business outcomes that

matter by engaging in regular two-way dialog with senior executives

Select outcome metrics, in addition to activity, output, and efficiency metrics

Set and track quantifiable performance targets Establish clear data chains to link marketing

investments and activities with business outcomes

Build actionable dashboards to communicate impact on business outcomes and secure additional budget


Marketing organizations are under more pressure than ever to create business value

% of Respondents (N=380) | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014

How do you see the pressure on marketing to measure its value and contribution to the business?

1% | Decreasing

85%Increasing Staying the Same14%


90–100Marketing was able to measure and report

the contribution of its programs to the business

80–89Marketing programs made a difference but the contribution to the business goals were

not measured and reported

70–79Marketing appears to have made some

impact on the business, but it is not clear if the impact was material, nor is it measured

69 or lower

Marketing programs didn’t make a difference—there is no clarity as to how marketing is contributing to the business

Still, only 1/4 of marketers can answer the question, “What is marketing’s impact on the business?”


26%

40%

28%

6%

For 2013, using a 100 point scale, please select what grade the CEO/Division GM would give your marketing organization for its ability to demonstrate its value and contribution to the business.


Where are you on the Marketing Performance Management Journey?

What do you need to do to be best-in-class?

Campaign Producers

SalesEnablers

Business Value Creators

The“A’s”

Middle ofthe PackLaggards

Track Marketing Activity and

Output

Contribute toBusiness

Outcomes

Improve and ManageMarketing

Performance

Activity Outcomes


Two things distinguish “A” marketers from the rest of their peers

The Right Mindset

Nailing the fundamentals of

aligning marketing activities to

business results

&Sooner or later,

those who win are those who think they can.

Paul Tournier1. Get Clarity Around the

Business Outcomes

2. Select the Right Metrics

3. Set Quantifiable Performance

Targets

4. Establish Clear Data Chains

5. Build Actionable Dashboards

What needles does marketing have to move?

Outcome-based, leading indicators, and predictive

Well-defined and documented for each marketing program

Between marketing activities, marketing objectives, and business outcomes

Regularly presented to and reviewed with senior leadership

The “A’s” believe they can measure marketing’s contribution to the business and hold themselves accountable

Note: Differences are statistically significant. | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014

In your organization or company, how important is it that marketing is able to measure its value and contribution to the business?

Believe It’s Possible

16%

37%

59%

It is difficult, and perhaps even impossible, to measure marketing’s contribution

to business outcomes

The “A’s” (N=98)

Middle of the Pack (N=151)

Laggards (N=127)

% of Respondents that Agree or Strongly Agree

Does your marketing organization have a revenue goal?

65%41% 38%

The “A’s” (N=83)

Middle ofthe Pack (N=120)

Laggards (N=104)

Hold Themselves Accountable % of Respondents with a Revenue Goal



71%71%The majority of the marketing

staff has business acumen

1. Get Clarity Around the Business Outcomes

% of Respondents that Agree or Strongly Agree

The “A’s” (N=97)

Middle of the Pack (N=148)

Laggards (N=122)

The “A’s” speak the language of the business and regularly engage in two-way dialog with senior executives

Note: Differences are statistically significant. | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014

58%58%41%41%


Activity Outcomes

Effort Counting Efficiency Impact Likelihood of Outcomes

Expected Outcomes

The “A’s” (N=81) 78 82 83 90 47 47

Middle of the Pack(N=116)

75 81 69 61 37 28Laggards

(N=99) 70 68 57 48 24 20

Output-Based* Operational* Outcome-

Based*Leading-

Indicators* Predictive*Activity Metrics

% of Respondents Tracking Metric Category

* Indicates a statistically significant difference. | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014

The “A’s” track and report outcome metrics in addition to activity, output, and efficiency

2. Select the Right

Metrics


The “A’s” not only set quantifiable performance targets, but they track their performance against those targets

% of Respondents (N=303) | *Differences are statistically significant. | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014

32

52

10

5

1

6

34

35

20

5

Nearly every marketing program has well defined anddocumented performance targets and we measure our

performance against those targets

Many, but not all, marketing programs have well definedand documented performance targets

Few marketing programs have well defined anddocumented performance targets

We do not usually set qualtifiable performance targets forour marketing programs

Don't knowThe "A's"Everyone Else

3. Set Quantifiable Performance

Targets

To what extent does your marketing organization set quantifiable performance targets for marketing programs and objectives?


The “A’s” are using data chains to create clear lines of sight between marketing investments and business outcomes

Note: Differences are statistically significant. Source: ITSMA and VisionEdge Marketing, 2014

Business Outcomes

Market ShareGrow revenue for cloud/mobile

offerings in NA Tier One Accounts by 15%, secure 17%

market share

Marketing Objectives

Pilot projectsIncrease new pilot

projects among NA Tier One Accounts by 35% resulting in 5 full RFQs

Marketing Programs

SeminarsConduct 15 seminars in major

NA cities, resulting in 20 meeting requests to explore

pilot projects

Marketing Tactics

Digital MarketingInitiate email campaign to

promote cloud/mobile thought leadership assets to 5,000 NA contacts at Tier One Accounts, resulting in

300 seminar RSVPs

4. Establish Clear Data

Chains


The “A’s” use their marketing dashboards to boost marketing’s effectiveness, communicate impact on business outcomes, and secure additional budget

% of Respondents | Note: Differences are statistically significant. | Source: ITSMA/VEM Marketing Performance Management Survey, May 2014

Does your marketing organization currently produce a marketing dashboard?

45%61%73%

5. Build Actionable Dashboards


Methodology

Source: ITSMA/VEM Marketing Performance Management Survey, May 2014

Web-based Survey

Survey invitations were emailed during April 2014 to the ITSMA and VEM communities. In addition, survey invitations were extended via social media channels such as Twitter and LinkedIn.

380 people completed the survey

The Data Was Analyzed by:

A’s: Marketing demonstrates contribution to the business (Grade: A)Middle of the Pack: Marketing

makes a difference, but contribution not measured (Grade: B)Laggards: Marketing may have

an impact, but not known if impact is material (Grade: C/D)

MarketingPerformance

Grade


Respondent Demographics

42%

40%

18%

Type of Company


Job Title

Industry

Software solutions

IT professional services/consulting

Marketing services/advertising agency

Other services

Telecommunications and network systems and solutions

Other business services

Other product manufacturing

Other technology hardware systems and solutions

Computer systems and solutions

Financial services

Management consulting

Outsourcing (technology/business process)

Other

1513

128

77

666

5556

Size of Company

32

6

10

6

17

8

22

Lessthan$50M

$50Mup to$99M

$100Mup to$499M

$500Mup to$999M

$1Bup to$4.9B

$5Bup to$9.9B

$10Bor

more

33%

28%

25%

14%

Sell both products and

servicesPrimarily sell services

Primarily sell products

C-level/VP

Director

Manager

Individual contributor


Table of Contents for

For More InformationJulie SchwartzSenior Vice President Research and Thought [email protected] | +1-407-788-8220

2014 Marketing PerformanceManagement Survey: Increasing

Marketing’s Relevance to the Business

Laura PattersonPresidentVisionEdge [email protected]+1-512-681-8800, Ext. 12

SlideExecutive Summary 3Methodology and Respondent Demographics 32Detailed Findings 45

Marketing Contribution to the Business 45Use of Data and Metrics 72The Marketing Dashboard 87

Appendix: Study Definitions 107


About ITSMAITSMA is a research-based membership organization that helps B2B companies market and sell services and solutions more effectively. They work with the world’s leading professional services, technology, and communications providers to generate increased demand, strengthen customer relationships, and improve brand differentiation.

About VisionEdge Marketing VisionEdge Marketing provides proven expertise to help companies improve marketing accountability, measurement and analytics; create outcome-based marketing metrics; develop dashboards; leverage processes, data, systems, and use data and analytics to make strategic market, customer and product decisions.