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Improve Your Probability for Success ™www.visionedgemarketing.com
Not for reproduction or redistribution without written permission.
From CEOs, to CFOs, to CMOs Everyone’sTalking About Marketing Metrics
Two Top IssuesBrandsMeasuringEffectiveness – ANA2004 MembershipSurvey
•Few firms collecting Metrics to justify Marketing investments•Some firms spending 25% of revenue on Marketing•Nearly 40% CMOs dissatisfied with ability to measure Marketing results- CMO Council 2004 MPM Survey of 1000 Technology Companies 1. 66% ranked Accountability as
Chief Concern2. Strong Brand Franchise
followed at 48%3. 45% cite developing
integrated marketingcommunications
- ANA 2005
Top Priority: Enhanced Return on Marketing Investment for their Marketing & Research Functions-Advertising Research Foundation -(ARF) Survey of CEOs 2005
38% of the 95 companies in IDCsStudy, “Planning Your 2006Budget,” plan to deploy measurement processes over thenext 12 months
Improve Your Probability for Success ™www.visionedgemarketing.com
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What Isn’t Being Measured?
( Nearly everyone says business with existing customers is important, BUT ONLY( 8% track or measure share of wallet (SOW),( 3% report SOW regularly to management( 9% include it in their marketing plan and have a process in place to track it.( < 10% measure customer lifetime value, customer advocacy, customer tenure
( 78% of marketing and business executives and professionals believe it is critical toacquire new customers in existing markets.
( Other than leads to conversion, track little else.( Only about 25% track and measure rate of customer acquistion (75% don’t)( Only about 37% report a market share metric (60% don’t)
( Only 1 of 4 measure marketing’s impact on business goals
( 2/3 do NOT include metrics in marketing plansStudies commissioned by VisionEdge Marketing
2003, 2004, 2005, 2006
Improve Your Probability for Success ™www.visionedgemarketing.com
Not for reproduction or redistribution without written permission.
Our Metrics Must Change
1. Marketing must transform into aperformance-driven, outcome-centeredorganization
2. From Tactical to More Strategic
( Marketing organizations must broaden focus fromsales support to a marketing framework linked tobusiness outcomes
( This framework must identify metrics thatimpact the organization’s economic performance &strengths
( Measure financial & NON-FINANCIAL goals
3. Must balance the ROI of currentprograms while still driving strategicissues that impact long-term viability
( Only 57% of Financial Directorsbelieve Marketing investment helpedlong-term corporate growth
( 27% interpret Marketing as short-term tactical measure
( 32% would cut Marketing “first” inhard times
( While 90% of CMOs polled felt thatthe ability to measure their marketingresults was a significant priority, 80%were unhappy with their ability to doso”( CMO Council MPM Study 2004
Improve Your Probability for Success ™www.visionedgemarketing.com
Not for reproduction or redistribution without written permission.
Four Categories of MarketingMeasurement
All of these Contribute to Revenue
1) Business acquisitions/demand generation
( Metrics such as market share gains,category growth, customeracquisition
2) Product innovation/acceptance
( Metrics such as market adoptionrates, new products as apercentage of revenue, time-to-revenue, user attachment & affinity,share of wallet, loyalty and referralrates
3) Corporate value
( Metrics such as Growth in BrandValue & Financial Equity, CustomerFranchise Value, Price Premium,Retention of Customers andEmployees
4) Corporate vision & leadership
( Metrics such as Share of Voice,Share of Distribution, Retention &Message Relevance & Tonality ofCoverage
Best Measure of Marketing PerformanceCMO Council 2005
1.2%Other
3.7%Viral word-of-mouth referrals
4.5%Increase marketing budgets and influence
6.9%Volume and quality of media coverage
6.9%Time-to-market improvements
7.2%Reductions in selling cycles
10.6%Competitive share of mind and voice
14.4%Brand value and equity
16.8%Market awareness (outside research)
20.5%Positive feedback from sales, channel andmanagement
22%Opportunities converted
27.7%Marketing spend effectiveness and ROI
29.5%Qualified leads generated
29.5%Company profitability
35.1%Customer value, loyalty, affinity
39.4%Market Share Gains
47.3%Revenue Growth
Improve Your Probability for Success ™www.visionedgemarketing.com
Brand EquityAdditional Revenue Linkedto Brand’s Name & Symbolthat Adds to (or Subtractsfrom) Value Provided byProduct or ServiceCompared to SimilarCompetitive Product
Improve Your Probability for Success ™www.visionedgemarketing.com
Not for reproduction or redistribution without written permission.
A Case Study: Video ConferencingCompany Sees the Value
From: Activity-Based( Literally monitoring dozens
of activities and reportingmonthly.
( Didn’t know whether thesewere the right things to bemeasuring.
( Didn’t know how to tieactivity tracking to thesuccess of our Marketingobjectives and strategies.
To: Outcome-Based( Used the mapping
process to focus
( Revised metrics
( Results:
( “On a worldwide basis, ourgroup’s systems unit salesincreased by 82% with theaverage order value forthese systems increasingby 11% for one productand 25% for another.”
Improve Your Probability for Success ™www.visionedgemarketing.com
Not for reproduction or redistribution without written permission.
Case Study 2: Logistics Company DiscoversImproved Route to Marketing PerformanceManagement
From Operational and Activity-Based( As a logistics company, marketing
reported its performance in thesame vein, measuring activitiesand productivity.
( The existing “dashboard” did aneffective job of tracking progresson activities, but not on thebusiness result of those activities.
( The executive team didn’tunderstand how marketing wasimpacting the business.
( Wanted to tie marketing planmore closely to business goals andprovide the right metricsframework for measuringmarketing performance.
( Deployed its mapping process tohelp the team focus on selectingthe right metrics and designingthe optimum report dashboard.
Added Outcome-Based( Revised marketing plan balanced
strategies and tactics, told a clear storyof how the marketing was going toaddress the opportunities in themarketplace and drive the businessforward.
( A new way to communicate howmarketing is impacting the business.
( Developed a short list of metrics thatserved as indicators of marketingperformance.
A few examples of these indicators andmetrics for the dashboard included:customer churn rate, market share byvertical, share of wallet, and companygrowth rate compared to category growthrate.
( “Before VEM’s our thinking was verytactical. Now we have some tools to helpus be strategic and measure ourcontribution to the business.”
Improve Your Probability for Success ™www.visionedgemarketing.com
Not for reproduction or redistribution without written permission.
Metrics Reporting - Dashboards
( Provide insight intoperformance
( Fosters decision-making
( Aligns strategy withimplementation
( “To address short- and long-term objectives, some firmshave developed marketingdashboards that define keymetrics and give a unified viewinto the effectiveness of theirmarketing.”
Taddy Hall, ARF
Improve Your Probability for Success ™www.visionedgemarketing.com
Not for reproduction or redistribution without written permission.
“Measure What Matters”
Presents a metrics framework marketing professionalsand company executives can use to ensure marketingis tightly connected to business goals and provides anapproach marketers can employ to demonstratemarketing’s contribution.
“ The book is full of useful tips and practicalinstructions for measuring the truly important metricsthat enable marketing to impact a company’s mostcritical goals.”
“Should be required reading BEFORE the writing orformulating of any marketing plan or budget.”
“Measure What Matters ranks in my top 10 marketingbooks.”
“… one of those rare pieces of work that brings theright information to the table at precisely the righttime.”
"There is something in here for every marketer whowants to prove that marketing, done strategically, canbe a huge competitive advantage in driving profitablegrowth.”
Available for purchase online atwww.visionedgemarketing.com
Improve Your Probability for Success ™www.visionedgemarketing.com
Not for reproduction or redistribution without written permission.
About VisionEdge Marketing
( Headquartered in Austin, TX, VisionEdge Marketing, Inc. is theleader in metrics-focused marketing, providing complete strategicand product marketing services and training
( Company provides data-based strategically-tactical! programs toinfluence prospect and customer purchasing behavior and drivedemand designed to build and maximize valuation throughpositioning and brand strategy
( The firm primarily works in the B-B space, predominantlytechnology-based companies with an emphasis on software,wireless, security, networking, computing, semiconductors, andmedical devices. Some of our 70+customers include: AbbottSpine, a division of Abbott Labs; Adobe; BAX Global; BarberFoods; Boxx Technologies; ETS-Lindgren; FreescaleSemiconductor; Infoglide Software; Motion Computing; ROCSoftware; SkyBitz; and Sterling Commerce