About VisionEdge Marketing Experienced Practitioners

Transcription

1 Best Practices in Marketing Performance Management Laura Patterson President & Author About VisionEdge Marketing Experienced Practitioners Founded in 1999 and headquartered in Austin, TX, VisionEdge Marketing, Inc. serves more than 100 customers, and counting. VisionEdge Marketing, Inc. is a data-driven and metrics-focused marketing firm that specializes in improving marketing performance and creating competitive advantage designed to attract, secure and retain profitable customers. Services include Marketing performance management Marketing and sales alignment Product and strategic marketing Pipeline re-engineering Professional development Is Marketing Expendable? Financial executives see Marketing as expendable. Matt Bud, Chairman of the Financial Executives Consulting Group, believes marketing lacks financial discipline decisions on budget cuts would be different if marketing could better educate finance on Marketing s impact. AdAge Summer 2008 study found that 60% of financial executives believe their companies marketing departments have an inadequate understanding of financial controls Marketing needs to demonstrate it is getting the job done Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 2 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 3 Page 1

2 Introduction The Marketing Accountability Journey Disconnect in Perception of Marketing s Impact and Value Persists Marketing is under increasing pressure to: Show impact on the business Demonstrate accountability Communicate our value To move the needle, Marketing needs to become a performance-driven organization This interactive session will: ROMI Evolution Review four hurdles best-inclass companies overcome Introduce the concept and the characteristics of a performance-driven organization Explore five best practices to improve marketing performance measurement and management Time Permitting Five Case Studies Recommended Steps Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 4 CEOs reveal that "enhanced return on Marketing investment is a top priority for Marketing. (ARF) Top Priority 66% rank Accountability as Chief Concern (ANA) Measuring effectiveness is second most important priority (ANA) 66% of business executives say marketing analytics and metrics are marketing s greatest need (Booz Allen) Lack of Satisfaction: Only 21% of 319 respondents rate themselves "satisfied" or "very satisfied" with Metrics capabilities (CMO Council) Measurement Challenged: Over half (51%) say that difficulty in measuring performance a key reason for pressure on Marketing department (ANA and Booz Allen Hamilton) Don t make the grade: Only 17% of CEOs would give Marketing a A. (VEM) 34.9% of CEOs give marketing a C grade, only 9.6% of CEOs give marketing an A grade, 8.4% give marketing a D grade. (CMO Council) Still a Priority: 59% consider measuring Marketing performance to be a top-three priority for their company. Accountability top priority for 66% of senior Marketing executives (ANA) Can t Get No Satisfaction: Only 9% somewhat satisfied with their company s ability to set and monitor Marketing Metrics (VEM) 48% felt that CEOs believe that their organization s ability to measure marketing performance was only marginally effective. (VEM MPM) Dissatisfaction With Metrics Continues: 96% of marketers tracking 1-20 metrics and 76% say metrics are not useful in decision making (Mktg Leadership Roundtable) Top Priority Still: CMOs under pressure to demonstrate value; ROI major issue in 2008 (B-B Mag) Still Don t Make the Grade: only22% of CEOs give Marketing an Measurement Measurement A (VEM MPM) Challenged: Challenged: Fewer than 1 in 10 say their Marketers remain Marketing is only organization is completely effective at marginally or somewhat MPM (Lenskold) challenged to effective at measuring Measurement Challenged: measure value and Effectiveness (Deloitte 30% of 200 CMOs rank MPM most ROI, <50% use study of over 460 significant challenge (Aberdeen) marketing executives) Top Priority Still: analytics (Alterian, Still a Priority: Connect Marketing to Financial n=1545 ) 54% of survey Consequences (Aberdeen) participants say Proving ROI critical (Red Herring CMO measuring marketing Summit) performance is one of Need to show impact on purchasing their top 3 priorities (B-B Outlook 2009) Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 5 <20% of C-Suite give Mktg an A, vs nearly 50% of CMO/VP VEM MPM Study 2009 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 6 Page 2

3 Despite Numerous Tools Marketers Still Lack MPM Proficiency Underutilized Marketing Ops Function First Marketing Measurement Conference ORSA/TIMS Special Interest Conference on Market Measurement and Analysis 1980 Business Objects 1990 Salesforce Eloqua Marketo Siebel Google Analytics SM2 Web Analytics Marketing Analytics Webtrends ImmediateFX LeadGenesys 2006 Vtrenz 1993 Alterian Pre-1990 BI Tools Cognos Hyperion CRM Goldmine Sage Software/ACT 1992 Campaign Management Unica PR Metrics Vocus 1996 Cymfony 1998 Aprimo NetSuite 2001 Manticore MarketingPilot 2004 Telligent CMO Council corroborates these findings Only about 5% of marketers are highly satisfied with the level of accountability, operational visibility, and marketing output. VEM MPM Study 2009 VEM MPM Study 2009 Many organizations have marketing operations, a function defined as being responsible for helping marketing be accountable and operate like a business. Those organizations that have a marketing operations function see data analysis and collection and data management as primary functions Only a third of the respondents indicated the Performance Measurement Development and Reporting within the purview of Marketing Operations. Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 7 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 8 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 9 Page 3

4 Link between Marketing and the Business Needs to be Stronger and Clearer Otherwise we ll Remain only Marginally Effective Compounded by a Sea of Metrics VEM MPM Study 2009 Without a real effort in MPM to articulate the value marketing brings to the business, marketing will continue to be seen as marginally effective. 1. Business acquisitions/ demand generation metrics Market share gains Category growth Customer acquisition Brand awareness 2. Product innovation/ acceptance metrics Market adoption rates new Products as a percentage of revenue Time-to-revenue User attachment & affinity Share of wallet, loyalty and referral rates 3. Corporate value metrics Growth in brand value & financial equity Customer franchise value Price premium, Retention of customers and employees Brand championship 4. Corporate vision & leadership metrics Share of voice Share of distribution Retention & message Relevance & tonality of coverage Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 10 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 11 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 12 Page 4

5 Marketing Metrics Are Missing the Mark Four Hurdles Best-in-Class Marketers Overcome Marketers Use This Circular Argument -Where s the $? -What s the biz impact? VEM MPM Study 2009 More Strategic Metrics Nearly everyone says business with existing customers is important, few use metrics such as length of customer tenure, purchase frequency and recency, value of the overall customer base, customer lifetime value and share of wallet Other than leads to conversion, track little else. (VEM 2009) Analytics and Skills Lack employees with specific marketing analytics expertise (Forrester 2008) Less than half of respondents use analytics (Alterian 2009) Measurement Better Tools Competence and Process Shockingly low Pressure has investments in mounted on marketing technology marketers to and still immature accurately predict, processes (IDC Dec measure, and 2008) optimize results Real success will (Marketing Sherpa 2009) come from being smarter and more strategic in operations (B-B 2009) The reason I don t know what really works is because I don t have any data and/or metrics Quantitative controls and decisions bythe numbers just get in the way I m trying to implement various programs because I don t know what really works Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 13 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 14 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 15 Page 5

6 A Tale of 2 Marketers A True Story The Point to the Story Let s Review Why Companies Invest In Marketing Tracked Trial Rates Measured Adoptions Rates Focused on Category Growth rate Tracked Pipeline Contribution Tracked everything Web Measured press and analyst coverage Measured Awareness Focused on Lead ROI Bad metrics can be worse than no metrics and may encourage the wrong behavior and nonproductive activities Ambiguous metrics are open to interpretation Need to become a performance-driven and have a manageable number of metrics aligned with business outcomes Understand the market and customers Develop and execute a strategy to create preference and consideration that enables the organization to Acquire more of something Acquire it faster Acquire it cheaper Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 16 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 17 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 18 Page 6

7 3 Ways Marketing Gets the Job Done Requires a Transformation Performance Management 1. Find Profitable Customers/Consumers The process of acquisition 2. Keep Profitable Customers/Consumers The process of retention 3. Grow Profitable Customers/Consumer The process of increasing the value of your customer franchise and brand Need to link the metrics to the job Into a performancedriven organization that: promotes competition maintains quality, and emphasizes a consistently high level of achievement. Entails - New skills, capabilities, metrics, and processes required to make the transformation Three Changes We Must Make 1. Transform into a performance-driven, outcome-centered organization 2. Shift From Tactical to More Strategic - broaden focus from sales support to a marketing framework linked to business outcomes To metrics that impact the organization s economic performance & strengths both financial & NON-FINANCIAL goals 3. Balance The ROI of current programs while still driving strategic issues that impact long-term viability the process of measuring progress toward achieving key outcomes and objectives in order to optimize individual, group or organizational performance. The top challenge for marketers remains to better quantify and measure the value of marketing programs," in spite of improvements in accountability over previous years. CMO Council's 2008 Marketing Outlook Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 19 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 20 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 21 Page 7

8 Performance-Driven Organizations Have a set of measurable performance standards, a pointed focus on outcomes, and clear lines of accountability - all of which are important if a marketing organization wants to prove its value. 5 Characteristics of a Performance-Driven Marketing Organization 1. Established clear standards of performance and metrics 2. Aligned resources, policies, and practices 3. Results tracked and reported against performance standards 4. Data and performance target setting are used to drive continuous improvement and to hold the entire system accountable for performance. 5. Analytics are used to facilitate fact-based decision making Adopt Five Best Practices Create a performance measurement system based on data and analytics Adopt a framework that identifies metrics that impact organization s economic performance and strengths Link marketing to business outcomes Embrace a culture of accountability Add the right skills, systems, and tools Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 22 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 23 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 24 Page 8

9 Data - The Foundation of Measurement Analytics The Ability to Drive Actionable Insights from Data Measurement and Metrics = Power Performance Driven-Marketing Organizations Embrace data Install and use a data management system Get the best data possible and use it in a pre-defined, unbiased way Establishing metrics, determining effectiveness, understanding efficiencies, all take data Data is everywhere, the challenge - locating data relevant to the organization s priorities and outcomes and then aggregating it Data is the new creative. - Stephan Chase, Marriott Rewards Need to: Install and use a data management system Get the best data possible and use it in a pre-defined, unbiased way Create a data inventory and identify the gaps Data is the basis of analytics Analytics - Critical to facilitating better and faster fact-based decisions Predictive analytics helps to establish some degree of accuracy the outcomes that can be achieved from the relationships, products, services, and processes Need To: Add more analytic staff in marketing Initiate modeling Empower Marketing Influence decisions Recommend action Play a strategic role Provide a current picture (market share, product margins, close rate) Indicate future performance (projected revenue, share of wallet, net advocacy) Other Professional Benefits: Communicate impact Be seen as accountable Demonstrate financial contribution Enable marketers to work smarter Relevant Metrics: Enables Marketers to conduct a more relevant & strategic role Transitions Marketing from how to spend least amount without reducing tactical results to investing for significant strategic success & impact Speak directly to C- Suite hot buttons Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 25 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 26 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 27 Page 9

10 Metrics and Measurement Establishing Metrics and KPIs The Right Metrics are Outcome-Based Performance-Driven Marketing Organizations: Design and select metrics that measure marketing s impact on the business Ground metrics in data and analytics Use metrics that measure efficiency, effectiveness and payback Create a measurement management system and consistently use it Capture performance metrics as quickly as possible in order to instigate immediate change in execution Report results and performance in real- time There s the all-too human desire to avoid accountability marketers often do not set quantitative program objectives, so they re unable to rigorously examine how marketing programs drive actual revenue. -Guy R. Powell Use a top-down approach start with the business decisions that need to be made To create your Metrics and KPIs answer these questions: What business outcome are you trying to impact What questions need to be answered to determine if you are impacting this outcome What data do you need to answer these questions Where is this data What decisions/action will you need to be able to make/take as a result of the data Connect Marketing investments and Metrics to the Business Focus on the most relevant, essential, & valuable actions Begin with business outcomes Identify most important measures of success Define performance indicators connected with these measures Determine which data provides necessary information Analyze & report Outcome-based metrics enable marketers to: Measure strategic effectiveness Focus on efforts with greatest impact and contribution to the company s valuation Demonstrate accountability Focus on contribution to company s overall valuation Provide quality control process Measure effectiveness before efficiency. Efficiency is doing things right; effectiveness is doing the right things. - Peter Drucker Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 28 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 29 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 30 Page 10

11 How Do We Get There? Our 3 Roles Enable Us to Move 3 Business Needles Select Metrics Based on Marketing s Job Start with the purpose of Marketing Find/Secure Profitable Customers Keep Customers Grow Customer Value Certain Facets of Performance Move Needles for Each Gauge Marketing has the main responsibility for achieving profitable revenue growth. Acquisition Penetration Monetization 5 Market Share Indicators Share of Preference 4 Lifetime Value Indicators Purchase Frequency 5 Customer/Brand Equity Indicators Price Premium Share of Voice Share of Wallet Net Advocate Score Phil Kotler, 1999 S. C. Johnson & Son, Distinguished Professor of International Marketing, Kellogg Graduate School of Management, Northwestern University Market Share Lifetime Value Brand/ Customer Equity Share of Distribution Rate of Customer Acquisition Rate of Growth:Market Advocacy/Loyalty Tenure Customer Franchise Value New Product Acceptance/ Adoption Rates Product Margins Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 31 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 32 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 33 Page 11

12 Adopt a Framework Tactical Strategic Illustrating the Concept Measuring Activity - Running 5x/week What Would The Shift Look Like Activity- Based Operational Counting Press Hits Trade show leads Click-Through Rates Leading- Indicators Business Outcome- Outcomes Market Share Based Category Ownership Lifetime Value Efficiency Lead/Rep Lead Aging Campaign ROI Program: People Ratio Cost/Billing Dollar Program spend/headcount Program/Total Spend Awareness: Demand Ratio Predictive Likelihood of Outcome Share of Wallet Adoption Rates Rate of Growth: Market Lose 20 lbs by the end of the year Finish a 5K in under 28 minutes Different outcomes mean different metrics of success, even though may use the same tactic for each What s the metric for the Lose weight outcome? Finish 5K outcome? FROM Measuring Activity Run six half-page ads in all tier one trade publications Exhibit at the primary tradeshow for each vertical Create product brochure for new product Revise online demo Generate 500 leads Implement a promotion with two distributors Distribute newsletter 6 times Send blasts to prospects monthly Conduct customer satisfaction survey Research customer product requirements TO Linking to Outcomes Add 7-8 New Strategic Accounts to support NA Market Penetration Increase Customer Lifetime Value from X to Y Grow share of wallet among our top customers from A to B or Tier One Customers will purchase 2 or more products from the Y Family Add 3 New VARs in each of three primary verticals or Add One new channel partner in each region Grow Tier 1 Distributors Sales by X% Grow our product category by X% Increase penetration of ABC product in Tier 1 Customers by 15% Improve our NAS from 10.2 to 16 Change our MVI from <100 to >100 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 34 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 35 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 36 Page 12

13 Performance Management = Accountability Use the Dashboard To A Good Dashboard Metrics and KPIs (key performance indictors) are the building blocks for creating a dashboard All the necessary dials and gauges to tell you where you are, where you re going and at what speed along with indicator lights that illuminate at the first sign of a problem Show how marketing is moving the needle Assess what is and isn t working Foster decision making is actionable Provide a unified view into marketing s value Enable better alignment between marketing and the business Translate complex measures into a meaningful and coherent set of information Categories for the Marketing Executive Dashboard 1. Customer Acquisition and Retention 2. Customer Advocacy and Value (LTV, Margin, Loyalty, Share of Wallet) 3. Customer Equity 4. Product Innovation and Adoption 5. Competitive Positioning/Market Value Index (share of preference, rate of growth) A Multilayered performance management systems that: Enables organizations to measure, monitor and manage business activity using both financial and non-financial measures Provides an overview marketing goals and objectives, and real-time insight on progress toward each objective Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 37 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 38 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 39 Page 13

14 Revenue Deals Leads Leads Cost Market Share Marketing Dashboard Construction Three layers to the marketing dashboard: Executive level Strategic level monitors and measures performance against business outcomes and marketing objectives Operational level Marketing management tracks performance of core marketing strategies and processes Tactical level Functions and individuals analyzes performance at project or activity level as they relate to the first two Business Outcome Level Example Two Outcomes Market Share 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, PerformanceAgainst #1 Player Initiative FY07 1Q08 2Q08 3Q08 4Q08 Time 5 0 Acme Market Share Performance FY07 1m08 2mo08 3mos08 4mo08 5mo08 6mo08 7mo08 8mo08 9mo08 10m08 11mo08 12mo08 1mo09 2mo09 3mo09 4mo09 5mo09 6mo09 7mo09 10mo09 11mo09 12mo09 Time # 1 Player Target Enterprise Actual Market Share Target Enterprise actual Category Ownership Marketing Objective Level Example Two Objectives Margin and Marketing Contributed Deals Market Share Initiative - Lead and Cost Performance Against 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Time Marketing Contribution Qualified lead target Qualified lead actual cost/qualified lead target Market Share Lead and Deal Performance cost/qualified lead actual 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Time Margin Number of Opps and Cost Marketing Deals Target Marketing Deals Actual Qualified lead target Qualified lead actual Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 40 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 41 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 42 Page 14

15 Qualified lead target Qualified lead actual cost/qualified lead target cost/qualifed lead actual Leads Dollars Lead Deals Campaign Level Example Margin and Opps But Wait, There s More Performance Measurement = Accountability Market Share Initiative: Campaign XYZ Lead to Deal Performance Culture Accountability Means Reporting Marketing Marketing Deals Deals Target Actual Qualified Qualified lead target lead actual Q07 1Q08 Market Share Initiative: Campaign XYZ Lead to Cost Performance Leads Cost Skills & Training Solutions to the problems of marketing accountability and creating a ROMI culture begin with training (ISBM) Create, reward and live a measurement culture Processes, Systems, Tools Metrics and KPIs (key performance indictors) are the building blocks for creating a dashboard Dashboards and Scorecards Multilayered performance management systems that enable organizations to measure, monitor and manage business activity using both financial and non-financial measures Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 43 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 44 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 45 Page 15

16 Process is Key to Marketing Accountability Processes Impact of Culture on Performance The responsibility for the systematic management of marketing resources and processes to achieve measurable gains in return on marketing investment and increased marketing efficiency, while maintaining quality and increasing the value of the corporation. In 2005, the AMA defined Marketing Accountability Establish a process that enables the organization to make adjustments in real time rather than looking in the rear-view mirror Leverage Industry Best Practices and Company Insights for continuous improvement opportunities Deploy processes that allow you to modify metrics and the dashboard design as needed Marketers need to document these processes: Data collection and analysis process Program performance target setting process Metrics and Measurement process Reporting and dashboard process Cultures that encourage teamwork and employee development and empowerment achieve higher quality outcomes. Klein, Masi and Weidner, Organizational culture, distribution and amount of control and perceptions of quality, 1995 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 46 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 47 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 48 Page 16

17 Performance-Driven Marketing Organizations Live a Measurement Culture 1. Relentless when it comes to performance target setting and measurement Make measurement a keystone within the organization and place measurement at the center of the organization 2. Operate with a clear measurement strategy that aligned to business goals and outcomes and they measure what matters 3. Realign around new processes that facilitate accountability 4. Develop formal rules and regulations around the value of accountability 5. Establish expectations and goals, and measure achievement against these goals Promote and hail employees who demonstrate the new values and behaviors Transfer, and if necessary, terminate people who won t get on board Create stories around accountability successes Implement reward systems that support the value of accountability Deploy a test and learn systematic process 6. Go Public - Share and utilize marketing measurement insights across the team Create opportunities to engage employees in the change process Live a Measurement Culture Four Signs of a Culture of Accountability Marketing defines specific goals with measurable criteria to achieve clear results that will impact the business. Each person in marketing assumes accountability for the ultimate business outcome, not just his or her individual tasks Focus is on achieving results beyond the boundaries of each individual s job Each person within the marketing organization knows how their job advances the corporate and marketing goals. Not task-centric (e.g. updating the website, creating and implementing a campaign, revising the pricing model, etc) rather outcome-centric. Invest in the Right Skills and Capabilities Commit to recruiting and developing individuals to build a consistent base of marketing know-how, analytical skills Form strategic partnerships with an extended team of finance, IT, sales, services etc. to support the marketing function Deploy appropriate technologies to help the team analyze critical data Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 49 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 50 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 51 Page 17

18 Performance If We Change, Will it Matter? Companies with formal & comprehensive Marketing Performance Management System: Outperform companies entering consideration phase Performance ratings of 29%, 32% & 37% better in sales growth, market share & profitability CMO Council/Business Week MPM Survey See the Difference Best-in-class marketers measure specific metrics that link marketing efforts and overall business goals. These marketers and their companies consistently demonstrate higher performance in four areas: rate of customer acquisition rate of customer retention annual increase in gross revenues return on marketing investment - Aberdeen Group ROMI Customer Acquisition Rate Customer Rention Rate Annual increases in gross revenues BIC Performance Advantage 24% 31% 39% 37% 38% 43% 49% 45% 50% 60% 60% 76% 0% 20% 40% 60% 80% Percentage BIC Average Lagging Five Case Studies 1. Zebra 2. Kronos 3. ING 4. Bioscience 5. Storage Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 52 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 53 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 54 Page 18

19 Zebra Kronos ING Needed: More focus on high-value and high-roi strategies To demonstrate that marketing was indeed supporting business objectives, particularly in terms of revenue generation and channel support. Proper metrics that would aid the decision-making process to sift through the many requests for marketing assistance and to prioritize activities that most closely aligned with Zebra s sales and business goals Results: New and different metrics related to: the channel pricing revenue from and the number of new markets and applications in the pipeline. More meaningful dialogues with other business areas, including sales. Marketing became a more strategic player, more than just a tactical arm. Clearer links between marketing and the business are clearer Needed a more integrated view of marketing the ability to demonstrate the link between marketing investments and the attainment of key corporate initiatives Results Metrics and a new dashboard that provide actionable data add-on products (share of wallet) upgrades (customer value) penetration of new markets Needed: An approach to optimally allocate marketing funds A set of metrics the ING Retail Annuities marketing organization could use to monitor the ongoing effectiveness of its marketing efforts that the leadership, sales and marketing teams would all agree measured marketing s contribution and impact to the business Results: Six marketing initiatives and associated metrics were identified and approved to support the organization s sales, market share and earnings outcomes. retention account penetration rep productivity asset management new producer enablement and efficiency Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 55 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 56 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 57 Page 19

20 ING cont d Bioscience Storage Infrastructure and Management Solutions and Software Performance targets and drivers New Producer Acquisition Engagement conversion ratios time-to-conversion Producer productivity Kits to sales order value on-time delivery FROM Being overwhelmed with a continuous action item list but have very little other than excellent creative to show for their efforts. Inability of marketing to show the correlation between marketing tactics and true effectiveness. Vaguely worded marketing objectives such as: Grow the reference base Leverage our leadership position or ideally position the company in some market Become a dominant player or solidify market leadership Establish mind and market share Drive awareness TO Every marketing objective has a measurable performance target and is tied to business outcome a every tactic is designed to support the objective. Tactics that don t are deleted. Objectives and metrics around the following four key categories: customer acquisition share of wallet product adoption and average order value Eliminated 50% of distracting activities making the organization both more effective and more efficient Freed up 30-40% of the budget FROM Lead development focus Campaign-level tracking Post-activity data reports TO Focus on installed base and new customer acquisition Tracking performance-based targets Producing actionable dashboards to drive marketing decisions more real-time Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 58 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 59 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 60 Page 20

21 Storage Cont d Effectiveness New Customer Acquisition Marketing Contribution Qualified Lead Target Customer Retention and Defend Share of Wallet Products Per Customer Efficiency Cost Per Lead New Product Adoption Rate Financial Value Average Order Value Time to Purchase Purchase Frequency Getting Started 1. Conduct an audit to identify alignment, data and process gaps 2. Assess the crucial skills marketers need and provide training 3. Identify and add the right talent, systems, and tools to help automate marketing processes and improve marketing performance 4. Leverage best practices and company insights for continuous improvement opportunities 5. Create and adopt a performance measurement and management strategy, system and framework that aligns marketing with the business outcomes 6. Engage the leadership team and form strategic partnerships with an extended team of finance, IT, sales, service, etc. 7. Create and align processes, policies and practices that insure the linkage between marketing programs and business results 8. Design and select metrics and clear standards of performance that enables marketing to measure its impact, effectiveness, efficiency and value 9. Create a multi-level dashboard to report performance and results in real-time to facilitate course adjustments and foster decision making - make it an iterative and collaborative effort Thank You and Questions Metrics in Action: Creating a Performance Driven Marketing Organization Workbook: It's More than Money on the Line: Creating Metrics to Measure Marketing s Effectiveness, Impact and Value Both are available at Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 61 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 62 Improve Your Probability for Success VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 63 Page 21