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Unica Corporation

Combining people, processes and technology is the key to realizing full benefits from marketingperformance measurement solutions.

Marketing performance measurement (MPM) culture requires a combination of people, processes and technology. Early adopters of MPM are seeing the benefits, including visibility into which investments are most profitable; a marketing mix analysis across channels, segments and product lines; and ensuring all marketers can tangibly measure how their programs contribute to the bottom line. MPM is helping organizations better navigate, manage and analyze the growing complexity of marketing.

Today many marketing organizations are required to identify hard ROI from every marketing dollar invested, while constrained by an ever-increasingly challenging marketing environment. To quantitatively analyze performance against strategic goals and objectives, as well as better allocate marketing resources – including people, budget and materials – many organizations are implementing marketing performance measurement solutions.

Business Trends Are Driving the Need for an MPM Culture Within Marketing

As complexity grows, measuring and tracking performance are even more important than in the past to ensure only the most effective, profitable and loyalty-building marketing activities are executed. Many external forces have contributed to this increase in marketing complexity, including:

1. Consumer exposure to an increasing number of marketing messages. Consumers are bombarded with marketing messages through television commercials, mailings, websites, billboards and more. The number of messages each consumer receives has grown dramatically in just the last two decades. In 1985 it was estimated that the average consumer was exposed to 650 marketing messages every day. Today it is more than 8,000 (Entrepreneur magazine, November 2002).
2. Consumers assert more control over how marketers can contact them. Consumers are taking steps to control how marketers engage them, in part through the adoption of new technologies that filter out marketing messages. Consumers are also demanding that marketers adhere to new standards of behavior that put the consumer in the driver’s seat when it comes to determining when and how to deliver messages.
3. Marketing budgets are under heavy scrutiny. Increasingly, marketing budgets are scrutinized by top management. Marketers are required to account for their investments and demonstrate with hard numbers the returns they are getting.
4. Marketing is increasingly regulated. An increasing number of regulations, such as the do-not-call list, CAN SPAM and the European Union’s Data Protection directive have been driven by consumers’ desire for greater control. Other regulations, such as the Sarbanes- Oxley Act of 2002, are peripherally related to marketing in that they require organizations to implement firmer auditing and quality controls.

What Is Needed for an Effective MPM Culture: Marketing Technology, People and Processes

Enterprise marketing management (EMM) technology makes performance measurement easier and enables marketers to implement standards, to streamline processes and to gain access to multiple data sources to determine which investments are working, at both a macro and micro level, as well as how each marketing effort contributes to the company’s overall success.

Success with MPM also requires the involvement of the right people, particularly executive support from the CMO or marketing vice president to set the right objectives and put measurement in context. Additionally, buy-in from executives outside of marketing is needed so when performance is reported, they trust what was measured and how.

Lastly, processes must be put in place to ensure that information is accessed, gathered, formatted and distributed in a timely manner to a central reporting location. These processes require approvals and access to multiple data sources and systems so that data can be integrated for a complete performance review.

Tips for Implementing a Successful MPM Culture

Creating an MPM culture is unique to each organization, based on the type of business, the role of marketing within that business and the overall corporate culture. This involves 10 major steps:

1. Ensure sponsorship. Key stakeholders and sponsors should be identified to drive the creation and ongoing development of an MPM culture. A task team including executive staff, marketing staff and sales should be formed to drive the processes, reviews, approvals and output needed.
2. Clearly articulate goals and objectives. To make sure everyone in the marketing organization understands the value and purpose of the MPM practice, goals and objectives must be defined. This will ensure alignment across roles, ultimately providing each team member, as well as the marketing organization, with the ability to measure progress against key objectives.

Effective Marketing Performance Measurement = Marketing Technology + People + Process

3. Identify important external and internal metrics. Using the experience of your task team, identify the most important external and internal performance indicators to measure. Be sure to include appropriate metrics for every major element of your marketing mix (such as PR, advertising, etc.) so that the MPM solution created enables all members of marketing to track their progress and contribution to the organization’s success.
4. Gain agreement on what and how to measure. Since the output of the MPM solution will be regularly shared, analyzed and reviewed by individuals internal and external to marketing, obtain buy-in from key stakeholders once metrics are identified. Sales, finance and your CEO should have visibility into the measurement and reporting planned so that all groups are level-set in terms of measures and calculations; understand the value of marketing investments and ensure marketing is fully aligned with the strategic direction of the company.
5. Review information needed and available to measure each metric. Be sure to review how the information will be gathered to populate your final output. Do you have access to all the data needed? Or do additional processes or access levels need to be put in place? Review all constraints in advance and make certain access to required data is tested and working.

The first five steps above describe how to create an internal process for marketing performance measurement. The next five steps describe ways to make the execution of that process more efficient:

6. Implement EMM technology to speed MPM. Using EMM technology, organizations can streamline and automate marketing activities so that performance measurement is just one step in the marketing process. Automation also frees up marketers to analyze the effectiveness of each customer communication and activity. The timelier this analysis, the more flexibility marketers have to refine and adjust communication strategies to ensure that goals are met.
7. Develop a prototype with sample reports. Using the information gathered from the task team regarding what metrics to track and calculations to apply, create an MPM prototype – including sample reports. This will allow you to flush out the processes and approvals pertaining to how information is gathered, evaluated and distributed. This step is key in identifying any gaps in your solution.
8. Review and refine prototype. Execute an iterative design approach. As with all organizational changes, creating an MPM culture is a mix of business process and supporting technology. This necessitates a thorough and ongoing review and refinement to ensure that the results match the original objectives and metrics previously agreed on.
9. Rollout. Once the prototype is reviewed and necessary changes are made, the MPM solution is ready for organizational rollout. Planning the rollout of the resulting processes, supporting systems and technology as well as reports is an important step. The same task team who originally participated in the planning process should be involved to stress the importance and value of the MPM solution. The key objectives during rollout are to drive broad user adoption and acceptance.
10. Assess and review. The iterative nature of MPM doesn’t stop after the initial rollout. Over time all aspects of this culture change must be monitored, assessed and reviewed. As with any business process, marketing performance measurement improves with time, new information and experience.

Implementing a successful MPM culture requires a combination of people, processes and technology. Early adopters of MPM are seeing the benefits, including visibility into which investments are most profitable; a marketing mix analysis across channels, segments and product lines; and ensuring all marketers can tangibly measure how their programs contribute to the bottom line. MPM is helping organizations better navigate, manage and analyze the growing complexity of marketing.