In a recession, the marketing department can often to be the first to suffer cuts. By focusing on measurement, and gaining a better working knowledge of metrics, marketers can start to prove the contribution the discipline makes to business.
It's a business cliché to say that what doesn't get measured, doesn't get done - and yet many marketers are guilty of ignoring this fundamental principle. The common image amongst the rest of business is that marketers are the creative, arty types, and don't get involved with stats and figures, nor are they properly accountable for their expenditure.
A Deloitte survey from 2007, for example, indicated that a third of CFOs don't think marketing is a key driver of growth in their organisations - an astonishing figure. This preconception is largely untrue - but to distance themselves from it, marketers need to prove that they can talk figures with the accounts department and have a financial grasp of the costs, output and value of their contributions to business.
In the public sector, this focus on measurement is increasingly being used to demonstrate the value of marketing. Many parts of the NHS, for example, which were previously resistant to the idea of ‘marketing' being introduced into the health service, are beginning to see that marketing can help organisations extract greater value from available resources. Even Sir Alan Sugar describes marketing as the ‘spending department', and if this is a common conception, it's one that needs to be changed.
Types of metric
It can be hard to isolate the contribution marketing makes to the business, but there are several steps marketers can take to evaluate their own effectiveness, and to communicate as much to the rest of the organisation. Firstly, it's important to know what you're trying to measure; and be aware of the distance between attitudinal and business measures.
A metric like awareness, for instance, is useful (and easily measured) but harder financial metrics are needed to see how this awareness turns into purchase decisions. You need to find correlations between media exposure and sales, to see whether and how marketing is driving growth. You need to take account of variables - such as seasonality and hidden expenses, in any calculations you make of marketing's contribution. And you need to bear in mind the fact that some areas are easy to measure, but less important to success - and vice versa.
Awareness and action
Whilst an increased focus on metrics is desirable, they bring their own pitfalls. Too much focus on sales can lead to you producing good short-term figures, but insufficiently investing in long-term growth. Measuring market share can be an important metric in some sectors; less relevant in others. The key is to have a series of tested metrics that you then balance, and create a ‘metric of metrics'. The ‘balanced scorecard' approach developed by Kaplan and Norton is a tried and tested approach to put this into action.
All campaigns should be measured against objectives. Any good marketing plan will outline what these objectives are, how they will be met and indicate how success will be measured.
Most promotions, for example, technically ‘lose money' - but if they have brought large numbers of customers to your company and have then encouraged them to spend much more with you, they shouldn't be marked as unsuccessful as a result. Or an email campaign that doesn't appear to generate all that many leads can still be successful if it has cost virtually nothing and leads to future recall. Similarly, some metrics will indicate success when in fact the results are not as good as they seem.
Nothing to be frightened of
An increased awareness of metrics needn't be an extra burden for the marketer. Rather, by being aware of the need for measurement, many companies can find metrics a help in terms of focusing their resources on where they want to make significant gains, cutting out less profitable areas of the business and identifying new areas for growth.
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