Moment of Truth

Five Best Practices to Capturing a Marketing Performance Advantage

Introduction

Advances in marketing measurement, as well as significant changes in communications media, have transformed the discipline of marketing and how its impact on the business is assessed. At the same time, marketing departments have come under increasing pressure to defend their budgets and more clearly articulate the value they create for their organizations. The result has been a seismic shift away from management by feel and toward the application of marketing science, along with an explosion of interest in marketing measurement.

But has this shift resulted in a corresponding improvement in business results?

To better understand how companies are practicing marketing measurement and management, and to identify the barriers that exist to improved performance, CMG Partners and Chadwick Martin Bailey launched a comprehensive study with more than 400 participants. Through this research, we were able to define the current state of marketing performance — the practice of actively managing marketing performance through a disciplined process and insight-driven improvements — and pinpoint barriers to improvement. In addition, we were able to identify five best practices common among companies that experience a positive business impact as a result of their marketing performance efforts. 

Overall, the research found that approximately 75% of the 400 organizations surveyed appear to be stuck in the basic tracking and measuring stage of improving marketing effectiveness. While most of these are focused on breaking down barriers to improved performance in areas such as the correlation of measurements and data, or incorporating insights into the decision-making process, they’re not necessarily making forward progress. 

While these companies have yet to break through the barriers of marketing performance management, the remaining 25% did experience positive impacts and benefits to their business. Their embrace of marketing performance management was rewarded with market-leading business performance. 

Study of these top-performing companies uncovered a series of best practices that can be translated across a wide array of organizations to drive business results:

1. Foster Senior-Level Buy-In

Senior-level buy-in is perhaps the most critical factor in driving success. Senior executives must have a strong belief in the importance of marketing, with strong marketing leadership in place that is able to drive their organizations’ agendas and/or be able to tangibly demonstrate results through their marketing performance management practices.

Without strong executive buy-in and a deep belief that marketing performance management is a requirement for the ongoing competitiveness of an organization, most efforts will fail to deliver improved business results. A lack of commitment to rigorous analysis and understanding of the business marketing drivers, or the lack of capacity for continuous improvement, will have a huge impact.

2. Seek Strategic Alignment

Strategic alignment — aligning measures with corporate goals, not just marketing, business objectives and strategic goals — can be viewed almost like a compass as it relates to marketing performance management. It ensures you are measuring the right KPIs and that your resources are being marshaled with the right direction. With strategic alignment, marketing organizations are able to develop measurement architectures or strategies that not only answer the question of, “Was this tactic successful?” but also, “How impactful was it to the overall business objectives?” 

Not surprisingly, 80% of companies excelling at marketing performance management also align their marketing activities and measurements with the corporate strategy, compared to just 49% of the total population. These successful companies have instilled, and are leveraging, strong marketing leadership that has a seat at the executive table with strong, clear, and active communication of strategy and objectives, along with processes to ensure investments are aligned with strategic objectives.

3. Make Targeted Investments

Making targeted investments in people, technology, and data systems are prerequisites to being able to excel with marketing performance management. The key is to understand which elements are required versus which are just nice to have. 

Companies that have strong systems and technology, the data they need for analysis, and the skill sets to support their analysis requirements are twice as likely to excel at marketing performance compared to the total survey population. Empowered by the right technology and data, these companies have measurement architecture to guide their measurement strategy, as well as their investment decisions.

Additionally, and just as important, these companies are hiring and developing talent with the necessary skill sets to execute on marketing performance management — acquiring any missing experience and expertise, and investing in continuous training and education to build on their existing talent base.

4. Develop Strong Processes

The three best practices discussed to this point — senior-level buy-in, strategic alignment, and targeted investments — are foundational elements that ensure marketing performance management is set up for success. The missing ingredient to delivering improved business results is the process surrounding marketing performance management. Most of the companies we have talked to agree that turning their insights into actionable plans that drive change in the business and improve the bottom line is where they fall down. Most companies have a lot of data at their fingertips, but they lack the structure and processes to make the most out of the data they collect. These processes serve as the mechanism to close the cycle of measuring, learning, and improving — ultimately ensuring learning is translated into actions

Sixty perfect of participants who have strong marketing performance management processes in place are seeing a positive business impact from their practices, versus just 24% of the entire survey population.

5. Leverage Marketing Performance Beyond Marketing

There are two dimensions to leveraging marketing performance-based insights beyond the marketing organization. The first requires that functional peers are aligned with marketing in terms of the measurement architecture and strategy. The second element can almost be viewed as a capstone to marketing performance management. With trust in place, marketing can begin to use their measures to drive increased collaboration and improved cross-functional decision-making — both of which ultimately will improve internal investment decisions and the overall customer experience. 

In addition to the best practices identified, an overriding philosophy emerged from those organizations that excel with their marketing performance practices: Marketing performance is not an initiative or one-time event. Rather, it is a new way for marketing to operate. This approach to marketing management requires commitment and diligence to the core values and benefits of marketing performance management. And this commitment must be embodied by marketing leadership, bought into and reinforced by the senior-level business managers and the executive team, and fully embraced by the marketing organization. 

Those companies that embrace the marketing performance management approach to continuous improvement reap the benefits in terms of superior business results over time.