When it comes to measuring performance in marketing, many CMOs these days are combining old-school methods that analyze previous actions with newer predictive technologies that forecast the future.
Most marketing professionals understand the value of metrics that can correlate actions and goals, promote continuous improvement and direct future decision making. But deciding which data to pursue has its challenges. A recent study found 93 percent of CMOs are feeling more pressure to justify their budgets in spite of barriers that include internal silos, corporate resistance to change and limited expertise with emerging technologies and solutions. Study co-author Fred Ehle suggests executives from multiple internal departments (i.e. finance, tech and marketing) collaborate to settle on reasonable metrics for tying marketing to sales.
Analysts have assembled multiple performance measurement frameworks that could help you choose and structure your own set of metrics. Among them is the “Balanced Scorecard” approach created in 1992 by authors Kaplan and Norton, a process that helps businesses sharply narrow their priorities. Fans believe it can help users become more customer oriented, shorten response times, improve quality while emphasizing teamwork, reduce new product launch times, advise on how changes impact other business elements and act as a long-term management method, reports Harvard Business Review. Performance measurement tools are chosen based on the following organizational criteria:
- How do we look to our shareholders? (financial perspective)
- What must we excel at? (internal business perspective)
- How do our customers see us? (customer perspective)
- How can we continue to improve and create value? (innovation and learning perspective)
Some believe another question is crucial to the mix: What are our competitors doing? (i.e. the competitor perspective).
Designing your own framework
Once you have a clear understanding of your company goals and priorities, you’ll want to identify specifically what you need to know and then strategize how to secure that information. Ideally, any metrics you pursue through measurement tools should do the following:
- Focus on elements important to customer satisfaction.
- Be user friendly and easy to understand.
- Be nimble in offering fast, continual feedback.
- Correlate directly to some form of improvement.
- Answer a question or help solve a problem.
- Reinforce company strategy involving both short-term and long-term goals.
- Provide unique information without redundancy within your framework.
- Offer insight into areas for possible waste reduction.
- Generate more objective than subjective feedback.
- Produce information that’s valuable and easy to explain to non-marketing departments.
- Be easy to compare to established standards and goals.
Finally, your framework should be constantly evaluated to ensure it’s offering up real-time information that’s of optimal value to your organization. With today’s wide range of available tools, there’s no reason to maintain a system that’s not well worth your investment.
Contact Dial800 for a consultation on maximizing today’s performance measurement tools.