Download marketing performance management

Improving marketing efficiency and effectiveness
MARKETING
PERFORMANCE
MANAGEMENT
[MPM]
Copyright © Musqot Marketing Technology 1st edition, 2016
INDEX
Introduction to
Marketing Performance Management (MPM)....................6
MPM whitepapers.....................................................................14
The new world of B2B sales & marketing......................... 16
#1. Executive Summary................................................................16
#2. Background................................................................................18
#3. Purchase process – not sales process...........................20
#4. The new role of marketing..................................................23
#5. Conclusion................................................................................. 27
The ”I” in ROI for marketing.................................................. 29
#1. Introduction...............................................................................29
#2. ROI – what is it?.......................................................................30
#3. Focus on the ”I” in ROI..........................................................32
#4. New trends – new KPI’s.......................................................33
#5. Lean marketing........................................................................34
#6. Doing the right things............................................................35
#7. Agile transformation..............................................................36
#8. Fail fast........................................................................................38
#9. Marketing and sales are merging....................................38
#10. Summary and conclusion....................................................39
Views and reflections on the MPM domain......................42
#1. A fresh look at MPM..............................................................44
#2. A discussion about marketing investments................. 47
#3. The 6 A’s of successful MPM.............................................50
#4. MPM in an Agile World.........................................................52
#5. Financials for marketing.......................................................54
#6. Improving Marketing ROI.....................................................59
#7. MPM Procurement advice...................................................62
#8. Impressing the executive team?.......................................63
#9. Marketing efforts, efficient and effective!.....................64
#10. Marketing in the new service economy........................68
#11. Data driven marketing and the streetlight effect.......70
#12. A marketing story from a small town in Sweden......... 71
#13. 5 trends that will re-define B2B marketing.....................74
#14. Premium pricing – the core of brand marketing!........ 76
#15. Innovation & Marketing To Be Successful?................... 77
#16. What to measure – and why?.............................................78
Musqot from a customer perspective............................... 80
A selection of some 5-star customer reviews.......................82
INTRODUCTION TO
MARKETING
PERFORMANCE
MANAGEMENT
(MPM)
6
Marketing Performance Management
Marketing performance management (MPM) is the analysis
and improvement of the efficiency and effectiveness of
marketing. This is accomplished by focus on the alignment
of marketing activities, strategies, and metrics with business
goals. It involves measuring, managing, and analyzing
marketing performance to maximize effectiveness and
optimize the return of investment (ROI) of marketing.
To effectively apply a Marketing Performance Management
approach, organizations need some sort of IT solution to
support them.
Data and analytics
The collection and analysis of relevant data is a crucial
part of Marketing Performance Management.
By thoroughly analyzing the data, organizations can gather
actionable business insights to improve the marketing
effectiveness and marketing efficiency. Companies can,
for example, optimize marketing spending by measuring
the impact of marketing activities on sales of a product.
For such measurements, data is used to create a model
that establishes the link between marketing spend, in
specific channels and geographies for example, and
incremental sales.
IT-systems that support Marketing Performance Management
often offer various dashboards that graphically illustrate
correlation between data, in order to simplify the analytics
process.
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Metrics
Measurement and metrics enable marketing professionals to
justify budgets based on returns and to drive organizational
growth and innovation. As a result, marketers use these
metrics to prove value and demonstrate the contribution
of marketing to the organization.
Popular metrics used in analysis include activity-based
metrics that involves numerical counting and reporting. For
example, tracking downloads, Web site visitors, attendees
at various events are types of activity-based metrics.
Linking marketing to business outcomes, such as sales
figures and market share growth, is in some ways even
more important, even if sometimes more difficult as well.
While metrics data can be manually populated in a
Marketing Performance Management system, any efficient
management of larger volumes of information typically
requires the Marketing Performance Management system
to be integrated with external data sources. Examples
of such data sources are Social media platforms, CRMsystems and ERP-systems.
Benefits for the organization
Proof marketing ROI
Create, collect and generate data that can help you
determine the business effects of your marketing activities.
Optimize marketing performance
Gain insights to what needs to be done in order to improve
marketing efficiencies and effects, in order to optimize
your overall marketing performance.
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Bridge the gap between sales and marketing
Clarify the cause-and-effect link between marketing and
sales.
Strategic alignment of marketing objectives
Enable a framework that helps steering marketing activities
towards prioritized areas. Make sure that no marketing
resources are spent on activities that are not aligned with
your overall guiding objectives.
Replace the spreadsheets
Spreadsheets are flexible and easy to work with, if you
work alone. But to make sure that everyone has access
to the same information at all times, also when working in
larger groups, you need an application that replaces the
need for individual documents and uncontrolled e-mail
dialogues.
Save reporting time
Time spent on marketing reporting is often mentioned as
one of the most burdening parts of the work in a marketing
organization. Enable huge savings by automating the
reporting process, and get better reports as well.
Collaborate more efficiently
Following predefined workflows, and leveraging common
tools, will make the collaboration much more efficient.
Enable organizational learning
Without the systemized use of marketing technology to
monitor and support planning processes, organizations are
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bound to inventing the wheel again and again as people
shift positions and responsibilities.
Procurement advice
Subscribed cloud service
The most scalable and cost efficient option is to select a
true cloud application, which you can use as a subscribed
service. These services are often sold on a user account
basis, making it easy for your organization to start with a
small pilot group and then gradually expand until all your
marketers, and other internal/external stakeholders, are
using the service.
Proven platform technology
Stay clear of proprietary platforms! Choosing an application
with unique and exclusive features is fine, after all you will
benefit immensely from an application with dashboards,
workflows, tabs and graphic interfaces that are customized
specifically for marketing user scenarios. However the
underlying platform technology should be as standardized
as possible.
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Applications built on custom technology all the way through,
even in the infrastructure and platform layers, will grow
old quickly – and it will then be costly for the application
provider, and their clients, to upgrade and maintain stability
and performance.
Usability is king
It doesn’t matter how advanced and extensive functionality
a certain application is equipped with - it will not fly unless
users can manage to understand and appreciate it. So don’t
make the mistake to pick whatever application has the
most “checks” in the requirement specification, because
chances are that many of those features might not be
within practical reach for your organization’s users anyway.
Needless to say, advanced functionality and usability
does not necessarily have to compete with each other.
Try to find a good match, just remember which one is most
important to determine the success of your implementation
in the end.
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13
MPM
WHITEPAPERS
14
The new world of B2B sales & marketing
#1. Executive Summary
The consumer market has changed dramatically over the
last 10-15 years. Now we, as consumers, can check the best
prices, the quality of products, services and suppliers on
the go. Before the internet era, we had little knowledge
if a price at a store was high or low and it was difficult to
learn from the experience from other users.
The market for used cars is a good example of this
transformation. Now we can easily check the relevant
price for a specific model and year, we can find the full
history of the specific car that we are interested in, service
history, ownership etc. We can also look for model specific
issues, we can find recommendations from other owners
of this model. On top of this, we can easily find references
on the car dealer and learn if this dealer is ok or not.
From a technology perspective this is of course a result of
the internet, social medias, chat forums and all the other
applications and sites that we are using. But perhaps
more interesting than technology is the shift in balance
of information and knowledge that this development has
enabled. The ”pre-internet” days were characterized
by asymmetric knowledge. The car dealer had all the
information and the potential buyer had none or at least
very little knowledge.
At the end of the day, the power balance between sellers
and buyers has changed to the advantage of the buyers.
These theories are not new. They were awarded the Nobel
prize in economy back in 2001 and now we see the full
impact of them. The new world of information technology
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has provided us with the tools to go from theory to reality.
For B2C marketing this new world has changed the business
models and entire markets. The increased knowledge for
the customers means a new balance between sellers and
buyers. The sellers that are acting according to the situation
and leveraging this new power balance are doing great,
but the ones who are reluctant to change their business
models are struggling.
We now see the same thing happening in B2B. The buyers
are taking full ownership of the purchasing process, from
identifying a need to implementing a solution. The sellers
are in the back seat and the traditional sales process, the
classic sales funnel, is becoming obsolete.
The buyers are identifying a problem, finding the relevant
suppliers, learning about the strengths and weaknesses in
the different offerings, checking with analysts and finally
contacting the sales teams to negotiate the price. During
the process, the buyer has also been in contact with his
colleagues in other companies, whom are connected
through LinkedIn or other social medias.
When the seller finally meets the buyer, the buyer knows
the products, the market, the competition and has probably
also discussed with the users of all the tools. These has
traditionally been the strategic steps in a sales process.
Since the buyers now act more independent, the sellers
has to adjust. The adjustment involves strengthening
the role for marketing and reducing and changing the
investments in traditional sales.
B2B marketing has to learn from the new world of B2C
marketing. It is not only about setting up trade shows,
seminars and web-casts - but a structural change into
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a data driven, multi channel approach to support the
prospects’ buying process and to deliver business value.
#2. Background
The DNA in B2B sales processes has been the same for 30
years. Although the names of the concepts has changed
over time, the DNA has been the same. Since I started
B2B sales in 1980’s there has been several different sales
schools, Spin Selling, Power Base selling, Consultative
Selling and Solution Selling, just to name a few of them.
However, the underlying assumptions, are all the same.
In these old school sales schools, the process was very
straightforward. Our successful seller made a cold call to
a ”CxO” and booked a meeting. During the meeting the
seller would use smart questioning techniques to reveal a
hidden need, a problem that the prospect was not really
aware of - but that he still suffered from.
Our seller then presented a solution to the problem and
also presented a reference and ROI projections.
Now the prospect was sufficiently impressed to initiate a
purchasing project to solve this problem that he or she
was not really aware of before the meeting. This process
was based on asymmetric knowledge, the seller would
have deeper knowledge on the specific discipline than
the buyer.
This way of working has also been driving the reluctancy
to reply to Request for Proposals, RFP or similar activities
from the prospect. The assumption is that no company
is doing anything by themselves, but always driven by
a supplier selling to them. So if you are not aware of an
RFP coming, then your competitor has been there before
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you and tweaked it to their advantage. The word ”column
fodder” describes this.
The underlying assumption in this play is that the seller
had better information than the prospect, in regards to the
problem and the pains. The seller could use this advantage
to reveal hidden needs at the prospect. It also assumes
a centralized process, that the CxO wants to start the
process to implement a new solution. Since a couple of
years back, these two assumptions are no longer relevant.
It is also worth mentioning, that in the old school B2B
organizations, the sales teams were the heroes. The role
of the marketing teams was more to fix balloons, brochures
and events. The closest they got to the sales process was
to send a list of names on potential CxO’s for the sellers
to call. And of course to arrange the yearly sales kick-offs
to celebrate the sellers.
We also see that the prices in general are being pushed
down, regardless of the market. New technologies, new
competitors and lower entry costs are keeping a constant
press down to prices. With lower margins, fewer companies
can afford an expensive traditional sales organization. The
sales process is becoming more and more automated. Sales
automation drives the need for marketing transformation.
#3. Purchase process – not sales process
It is time to turn things on their heads - it is no longer a
”sales process” but a ”purchasing process”. The buyers
are more empowered, they are making smarter and more
informed decisions.
Just as the example with the buyers of used cars, who now
has an equally good knowledge about the car market, the
buying organizations has a similar increased knowledge.
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Both of their own business issues as well as on all the
different solutions. They also have a wide network to learn
from other companies with similar demands, they have
regular meetings with their peers in other organizations.
With this new knowledge, they are initiating purchases
and driving the purchasing process much further than they
used to. Actually, there are some recent studies that shows
that up to 60% of companies are driving their purchasing
processes, without seeing a seller, up to when the need
of a quotation arises. So you can say that the initial and
strategic parts of the sales process has been outsourced
to the buyer.
In the old days, many organizations relied on sales people
to get input on new ideas and new ways of doing business
and solving problems. Today, the customers are doing this
all by themselves. They know more about their situation and
their potential areas of improvements. They also compile
all the information they need about the different solutions
- and there are several ways of doing this. They can of
course just search the web for product information, they
also use all the analysts who have compiled information
and finally the have a good collaboration with peers at other
companies. They meet in formal events and collaboration
teams as well as in informal groups on LinkedIn and other
medias.
These fundamental differences, where the prospects has
much more information about both the markets, suppliers
and products, are changing the behaviors of the buyers.
They are now by far more proactive than the sellers, and
they are driving their own agenda. And when finally the
sellers enter the stage, the prospects knows everything
about the product, the market, the supplier and also about
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the competition. The good old days, when the seller could
drive the agenda is now history.
The organizations of today are also becoming more
decentralized in the way they initiate the buying of new
solutions. The decision to initiate a purchase is taken far
out in the organization, and even far away from the HQ in a
global company. This means that the old school seller must
work his way around the different parts of the organization
in different geographies to find the person who owns the
problem that his product can to solve.
Once again, the old school sales model will show that it
comes in to late, when the first decisions and scooping
are already done.
#4. The new role of marketing
From sales enabler to driving business value
Marketing is in the middle of a perfect storm! The sales
and purchasing processes gives new dimensions and new
expectations. A general price erosion puts pressure to
reduce the cost of sales and to becoming more efficient, to
provide more with less. And new technologies are enabling
the marketing teams to work fundamentally different.
Since the sales teams are now meeting the prospects later
in the process, where they have already acquired all the
information they need, the selling company must ensure
that they can provide the right information to the buyers,
at the right time and place. The selling company must
also position themselves towards the client needs and
the competition, without actually meeting the prospects
face to face.
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From a sales process perspective, this will require a new
mindset and a new approach on how to drive a successful
sales team, both for the incumbent customers as well as
for new. However, the details of a new sales process is
outside the scope of this paper.
From a marketing perspective their role will be an integrated
part of the sales strategy. The sales process will rely on
that they buyers can find the right information about your
solutions, at the time when they need it. The information
must be easy to digest, correct and also show your solution
in the right contexts.
But this is not enough - Sales & Marketing will have to
work closer together.
Previously, lead generation was about finding a relevant
name so that the seller could call and start the sales process
from zero. As we see, this is not the case today. Since the
prospects are driving their own agenda, marketing needs
to participate further in the prospects purchase project.
And they need to collaborate with the sales teams, both
from a process and from a tools perspective. CRM tools
are no longer only for the sales teams but also for the
marketing teams. And the marketing planning tools must be
aligned with the CRM tools and used by the sales teams.
Just as the sales process is fundamentally transforming,
the ways of working with marketing is also going through a
change. There are some commonalities within the successful
B2C marketing organizations. They are all focused on results
and analysis, they all have a data-driven approach to
marketing. Continuous analysis of their marketing projects
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and campaigns are key requirements. How many hits
on your website, how many likes on Facebook and how
many replies on your mail campaign – all this data has to
be captured and connected to the right campaign at the
right time. It is not sufficient to wait until you have access
the sales figures in the finance system. Since the sales
process in B2B tend to be long, you must capture the
relevant data as soon as you can. When you launch a
campaign, just to capture the hits on the website could be
ok for day one. However, later in the process you will of
course need to combine this with other KPI’ s and finally
to see the actual sales.
A key aspect of the marketing team deliverables, is how
well they can capture and distribute new leads from the
market. Leads means more than a name of a decision
maker, it is rather the name of someone who has been
actively looking for information, downloading white papers
or initiated a trial. These are the leads that actively are
looking for information and many of them are planning
for a purchase.
This highlights the need for a seamless integration between
marketing and sales. So that the marketing teams can
deliver the names of active prospects directly to the
sales teams. In the best of worlds, marketing and sales
are integrated and use the same tools.
And since the buyers are more proactive, the leads
coming from activities on the website or as responses
from marketing campaigns are more valid than the old
talk of ”column fodder”.
Another aspect of the new role of marketing is to create
business value. And it is equally important to measure the
business value of marketing activities. To enable this, the
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marketing activities must be linked to the outcome. So
that we know that a specific activity has created a well
defined value to the organization. The value can be
customer activities, like downloading white papers, replying
to e-mails or just a ”like” on Facebook.
But the value can also be sales related, new prospects,
new customer meetings, how many proposals and finally
the revenue. During that period, it is important to track all
the other activities
that marketing projects will lead to. This is especially
important since we want to be able to fine tune the
campaigns. And we can not do any tuning if we don’t
have any data points. Without these data points, early in
the campaigns, marketing will be driving in the dark.
Unless the marketing teams are data driven, there is no
chance for them to become quick, agile and to continuously
adjust the marketing activities to meet the desired outcome
and the objectives.
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#5. Conclusion
Since the buying part of B2B process is changing very
fast, we are now experiencing a direct impact on the sales
process. Sellers are involved later in the process and the
initial parts of the process is started by the buyer and out
in the organization.
The impact is that the traditional sales models are becoming
outdated. This will take some time, it will differ between
companies and markets. But in general, the old school
B2B sales is becoming obsolete.
To mitigate the risk of becoming irrelevant, there is a need
to transform the entire sales process, from identifying a
customer need to closing a deal. One key in this is to
strengthen the marketing teams in B2B companies. Not
by doing more of the same, there is no need for more
events, brochures and balloons. But the marketing efforts
must be more focused on results, working with the new
media landscape and providing the buyers with all the
information and knowledge they may need. On top of this,
they also need to have a very close collaboration with
the sales teams. We want to see an integrated process
between marketing and sales.
We also see a new role for marketing, from being sales
supporting to delivering its’ own business value. To drive
business value, the value needs to be well defined and
measured. We want the new marketing teams to be able to
continuously adapt the activities to the market responses, to
be quick, agile and very focused on the strategic objectives.
Any deviations should be addressed as soon as there is
data showing the deviations.
This is an exciting time to be in marketing! There are so
many opportunities to transform the business, to increase
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the status of marketing and to increase the business value
of our efforts.
There are also new demands on marketing, coming from
all these strategic changes - and also from different parts
of the organization. Sales teams, management teams and
even finance will put new demands on marketing.
These new demands are both driven and enabled by
new technologies and concepts focused on the needs
of marketing. Many of these new tools are focused on
automation, to automate tasks that used to be done manually
and others are focused on analytics. Statistic analysis on
all the data that we can find. These two examples of
disciplines are very important. But they don’t really support
the integration between marketing activities and the
outcome. This is where Musqot’s solution for Marketing
Performance Management fits in, to be the interface
between marketing actives and their outcome and provide
the marketing organization with a tool to clearly show the
business value that they provide.
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The ”I” in ROI for marketing
#1. Introduction
We are all looking for the ”holy grail” of marketing, where
we know how to spend the marketing budget to optimize
the business outcome. If we look back in the history, the
classic question has been - How many viewers did we
reach with a billboard, a newspaper ad or a TV spot?
However, a ”viewer” has never been the same as a ”buyer”.
To watch the TV-spot will not necessarily drive a sale. So
the follow up questions has been to understand how to
convert ”viewers” to ”buyers”.
Given the digital channels we now have an abundance
of data to analyze and to better understand customer
behavior and the relations between clicks and buys.
This is fantastic, especially for B2C businesses, so many
new opportunities to leapfrog the competition just by
learning more about customer behaviors and the returns
of marketing investments.
The Investment side of ROI has never been as cool and
exciting, although it is as important for the outcome and
critical to actually deliver a strong outcome.There is a
simple reason for this: the internal efficiency will drive the
marketing effectiveness. The smarter you work and the
more streamlined you are, the more time you can spend
on doing great marketing, instead of sitting in endless
meetings and tracking all endless lists of e-mails.
There is also another simple reason, marketing is becoming
much more complex. On one hand we have the traditional
channels, with their heartbeat and rhythm. Social media will
have another flow and there will be automated processes
for e-mails, with yet another tempo. On top of the content
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that is continuously produced there are also specific
campaigns, for example new product releases.With all these
different workflows, campaigns, projects and activities
it is becoming increasingly important to manage and to
streamline the processes and the ways of working.
Only then can we focus on making great marketing, instead
of getting stuck in a daily chaos.
#2. ROI – what is it?
The financial term ROI, Return on Investment, is a very
simple equation that shows the payback on investments.
How much money you will get in return for your investment.
For marketing this has been a challenging metric, since both
the return and the investments has been intangible and
difficult measure. On the other hand, everybody realizes
that it is a very important metric to follow up.
ROI can be either a very detailed number or more of a
concept. The strictly financial investments can easily be
measured and compared, but the result in terms of business
outcome for each marketing activity and combinations of
marketing activities are more challenging.
But there are other metrics, besides the actual monetary
outcome, that are relevant. For example, you can measure
the number of new leads or the pipeline value to compare
the marketing cost per lead or marketing cost per pipeline
dollar. This will enable you to compare different channels
or messages as well as to follow up the long term trend.
In a faster paced B2C business we can trace the actual
sale and compare it to the marketing activities.
Once again, we see that social media is an important
outlier. What is the value of a Facebook post or a like at
LinkedIn? Metrics like these are probably more relevant in
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terms of building brand value and they should be measured
accordingly.
ROI is not a matter of mathematics, the number crunching
is trivial. The challenge is to understand the relations and
correlations, especially on the result side. Lets say that there
is a 9-months sales cycle and during that time different
individuals in the customer organization has attended
events, a couple of webinars, downloaded white papers
and read blogposts. Trying to guess exactly which one
of these marketing activities that had an impact on the
sale is impossible. For sure, all these activities has been
a part of the success, they are all important parts of the
sale. But it is not realistic trying to estimate the value of
each activity. The trends however, are more important.
The continuous improvements are by far more important
than an exact number at a point in time. By following the
trends it is feasible to understand the impact of different
types of activities and combinations of activities.
For those of us that are accounting purists, we can argue
whether marketing really is ”investment” since it doesn’t
show up in the balance sheet, like machines or real estate.
On the other hand any investment in marketing will affect
brand value one way or the other. Either way, let’s use
the term marketing investments despite any potential
comments from the accounting purists.
#3. Focus on the ”I” in ROI
Let’s move our focus to the investment side of ROI, the ”I”.
Although the objective is to become more streamlined and
more efficient, the purpose is not only to simply reduce the
cost and to save money. We don’t want to go to the CEO/
CFO and proudly state that we have increased the ROI
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with 5% if the result will be to have the marketing budget
reduced by the same number. That is not the objective.
Instead we want to focus on how the streamlining and the
efficiency focus will improve the business outcome. At the
end of the day, that is what matters. At Musqot, we see
many marketing teams that are still using traditional ways
of working, although the world is changing dramatically. It
is a huge challenge to work with old processes in a new
environment. It is also a challenge to drive a marketing
team, to manage all the activities, projects and tasks
without any process or tool support.
Creativity and joy are keys to make great marketing. To
have the ability to become creative and to have fun, we
want to remove and to automate as much as possible
since this will free up time and remove clutter. After all,
the reason that we once made a choice to work with
marketing is that we love the creativity, the fun and the
joy - in combination with a strong business drive.
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#4. New trends – new KPI’s
We live in very exciting times. There are so many trends
that will transform business and marketing. Many of these
trends will also have an impact on the KPI’s that we want
to track.
One example of such a trend that will transform the
marketing teams is the growth of the Subscription economy.
Software as a Service (SaaS) is one example and there are
many others. You can subscribe to a truck and pay for the
workload or why not subscribe to perfume or sweets to
be delivered each month. This is one example of a new
trend that will drive the change in marketing and the need
for new KPI’s. In a mature subscription company, perhaps
70 or 80% of the revenues are coming from the current
subscribers, not from new customers. And the profit ratio
will be even higher for the subscribers, new customers
will often generate a loss over the first year.
Given this, an important KPI in the Subscription economy,
will be how much of your marketing efforts that are spent
acquiring new customers vs. keeping the current subscribers
happy. It seems
simple – but it is important since you go to where you
measure. And if you don’t keep your focus on the current
subscribers, there is an obvious risk that they will leave.
Digital channels may not be a new trend, but the full
impact of them are now emerging. One impact is of
course the abundance of data. Huge amounts of data to
analyze and a fantastic opportunity really understand the
details in customer behavior. But from a high-level metrics
perspective, all this data is often cloudy rather than crystal
clear. It is not always easy to separate noise and signals.
And although some metrics are crystal clear, they are still
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not always relevant. Introducing the number of Facebook
likes at the board level is not always welcome, since the
CxO’s prefer hard sales data.
A better idea is to reduce all this data into an actionable
metric and work from there. Actionable metrics are
something that you can actually use to make better and
well informed decisions. A good way forward is just to
write down all the small and big decisions that you make.
And what information and metrics to you need to make the
decisions. Some the decisions can probably be automated,
if you had the right metrics at hand. And other will at least
be less tricky.
#5. Lean marketing
The concept of ”lean” was started by Toyota and
revolutionized the manufacturing industry. Conceptually
it was quite simple, just to finding and removing all the
small details in the processes that takes time and does
not add value to the end product or to the customers.
Another word is to streamline the process, or just to become
more efficient.Regardless of which word we are using, it
is all about the same thing. To continuously improving the
processes, finding all the small things that don’t deliver
value and removing or automating these tasks. There are
some obvious examples of where to start, for example
meetings and e-mails.
According to some studies, we spend somewhere between
15% and 40% of our time in different meetings. On top of
that we spend time to prepare the meetings. This would
have been all fine, but to many of the meetings does not
add any value, they are poorly planned and could easily
be replaced by smarter ways to collaborate and to share
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information. Same thing with e-mails. We all know the
continuous flow of mails that we send and receive. Many of
them could be replaced by smarter ways of communicating.
These two examples highlights the advantage and the
power of becoming leaner and streamlined. Replacing
these tasks with smarter ways to communicate and to
share information will free up time. Time that could be
spent on making great marketing, rather than sitting in
endless meetings and getting stuck in e-mail chains.
#6. Doing the right things
When we are setting up the brand new marketing plan, we
are working hard to get the very best balance between the
strategic, long term objectives and the short term tactical
results. There is also an important balance between mature
products and markets and new and growing areas. I think we
all remember the classic matrix with cash-cows, stars and
question marks. There are many challenges in marketing,
one of them being how to plan the balance between
these objectives. We put lots of work into analyzing and
defining this balance.
But after some time all these smart and carefully balanced
activities starts to deviate from the plan. Some activities
will take a little bit more resources than expected, taking
resources away from other projects. And there will arise
new ideas and new activities that are not previously planned
for. Somebody with a loud voice will perhaps also have an
impact on the plans, without necessarily having a holistic
view. Hence there is an obvious risk of sub-optimizing.
On top of these risks of deviating from the fine tuned
balance, there is a very long list of additional artefacts
that the organization wants the marketing team to deliver.
35
Campaigns, brochures, social media activities, events and
of course an endless list of marketing content.
Unfortunately, there is never an endless pool of resources.
Prioritization are critical. And make well informed and smart
priorities we must have a good platform of information. We
want to know the right facts, so the KPI’s are important.
Priorities must also be driven with a holistic view, to avoid
sub optimization. This puts more responsibility on the
marketing teams to drive their own agenda.
#7. Agile transformation
Another term that is borrowed from other disciplines is
the word agile. It originates from software development
where teams realized that the old ways of working did not
meet the needs of their fast moving software companies.
The objective of becoming agile is to deliver results faster,
in increments rather than a big-bang, with higher quality
and with increased focus on the end-users.
Working agile means to break up the long term planning
into smaller and incremental parts. There are also some
very interesting organizational impacts. In the centre of
agile development are the ”self organizing teams”. These
teams are cross functional and process oriented, rather
36
than the traditional silos. As the name suggest, they are
organizing the work internally, planning, executing and
delivering the content of the sprints.
We can do a direct translation into marketing. Rather than
doing an annual detailed plan at the end of each year, an
agile marketing team will only make a very high level plan
for the coming year, based on a few strategic objectives.
And then have short, perhaps bi-weekly, planning cycles.
The big events will of course be a part of the plan, but
all the other activities will be planned bi-weekly. This will
enable the teams to continuously focus on the high value
activities and continuously prioritize according to strategic
and tactical objectives, given the available resources. And
just as with agile development, you have to start and stop
with the customer.
The concept of self organizing and cross functional teams
can also be translated into the marketing. Imagine having
a team that includes the internal marketing functions as
well as sales and product management, that is responsible
for an entire campaign. That will not only increase the
efficiency of the team but also ensure that the entire
organization is participating and taking an ownership of
the marketing activities. Or as some companies are doing,
having marketing as a part of the self organizing, agile
development teams.
There are lots of companies that have implemented an agile
approach to marketing and the numbers are growing fast.
The result of their changes has been both more efficient
marketing team and also to improve the results of their
marketing activities.
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#8. Fail fast
Failures are important! If we don’t fail sometimes, we are
just not trying hard enough. Small failures are obviously
less painful and less expensive than large failures. So we
want to fail fast and with low risk and cost. By approaching
an agile way of working, we can easily reduce the risk of
failures, since we can try things out in smaller and more
controlled ways.
Trying things out also means to actually follow up the result
and have an idea whether it is good or not. Once again,
the KPI’s are important.
#9. Marketing and sales are merging
Imagine if all the sales reps wrote and designed their own
advertising. Would that be scary and frustrating? Still, that
is what Social Selling is all about - every B2B sales rep
should be active in Social Media, building their brand.
Writing articles and posting on LinkedIn, managing their
Twitter accounts and writing their own blogs. All semicoordinated with their role as professional sales reps. This
is great news! And also a branding challenge that needs
to be adressed, one way or the other. Some companies
are training the sales team in Social Selling and others let
the marketing teams develop all the content, so that the
sales reps can just post and share it.
Either way, this is a part of the new way of working for
marketing teams and needs to be planned, executed and
followed up accordingly. Any marketing manager must
ensure that they are producing the relevant content and
also that the content is actually used. As well as keeping
some track on the sales teams’ way of using of Social Media.
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#10. Summary and conclusion
At the end of the day, the ”I” in ROI will drive the ”R”, the
result and business outcome. Not as simple as just reducing
the marketing cost. The internal work, the processes, ways
of working and supporting technologies are the platforms
you need to deliver great marketing with predictive results,
from an ROI perspective. The old days, where marketing
teams could consist of creative and flamboyant individuals
who rejected any kind of process or analysis in advantage
for gut feeling, those days are gone. In todays fierce
competition it is critical to be agile and prepared for new
competition, new technology and new business models.
It is also critical to be lean and efficient, to continuously
identify and remove any bottlenecks, working as smart
as possible. The purpose is to maximize the time and
resources spent on doing great marketing, while minimizing
the time and effort spent on tasks generating less value.
The way to drive these business improvements is to
embrace the digital transformation from both a process
and tools perspective. Actually, most of the marketing
teams are doing their planning in spreadsheets and with
very traditional ways of of working. Given the new world of
marketing, this is simply not sufficient neither for planning
nor for following up results.
This is why the ”i” in Marketing ROI is becoming strategic.
As marketers, we must rely on a well tuned marketing
engine. Just like all the other parts of our organizations
are continuously improving their processes and ways of
working, we must do the same in order to ensure that we
work smart, that we spend our precious time on the right
things and keep our focus.
39
Finally – marketing can never be reduced to just simple
numbers. Marketing should be creative, fun and innovative.
Although the numbers and the KPI’s are important as
such, what really counts is how we as marketers use those
numbers and KPI’s to fuel our field expertise – in order
produce better results and increased marketing ROI!
40
VIEWS & REFLECTIONS
ON THE MPM DOMAIN
42
#1. A fresh look at MPM
It’s high time we begin a conversation…. To drive revenue
through the marketing funnel is the first focus of a profit
seeking organization.
A rough year is in sight for the marketer, as is the case
whenever there is an undesirable fall in economy. However
even if the best in class marketers cut back on marketing
budget, there need not be an exponential fall in the
marketing program as per Gartner’s CRM Summit.
More than 75 percent companies affirmed that 20 percent
of their budget for marketing will be cut in the forthcoming
financial year as per Kimberly Collins, Research Vice
President at Stamford Conn. based research firm. The
solution, to quote Kimberley Collins is “to spend more –
on Marketing Resource Management (MRM)”.
The scope of MRM and MPM
Marketing Resource Management helps organizations to
deliver concistently and consists of a set of processes to
optimize marketing efforts, external as well as internal.
Agile processes help the organizations to adjust to the
lows and highs. Marketing Resource Management can be
said to consist of five structured disciplines:
#1. Planning & budgeting
#2. Production & project management
#3. Collection and management of digital assets
#4. Managing the distribution of marketing collateral & content
#5. Reporting, analytics and optimization
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To touch base with all areas of Marketing Resource
Management is one tough nut to crack. Many large
organizations have already got some solutions in place
for the management of items No 3 and 4 in the list above,
whereas the more financial and strategic aspects of items
No 1, 2 and 5 (which together form the scope of MPM –
Marketing Performance Management) are sometimes
managed just with the help of spreadsheets and Email.
Nevertheless, implementing more sophisticated support
tools for MPM is what yields the maximum benefits for
your organization.
Ana
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MRM
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45
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With a rapidly approaching futuristic goal in mind, eyes turn
as the Marketing Performance Management unveils itself
to offer a centralized, single hub for management of data,
cross channel distribution, user-centric marketing campaign
management across multiple devices and channels.
MPM
Dig
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#2. A discussion about marketing investments
The increasing complexity of modern marketing gives new
fuel to the classic question whether marketing spend is
a cost or an investment. At this present juncture Return
on Marketing Investment (ROMI) is definitely gathering
ground. Marketing perhaps has lost ground as a cost
center and is rapidly growing to create a substantial driver
for business value.
In Circa 1700 BC, marketing investment first came into
picture by the Code of Hammurabi. The concept is
extremely simple- For every Euro, Dollar or Rupee that
we spend for marketing, a greater than or equal to rate
of sales should be available to us.
The need for marketing organizations to track and measure
marketing performance for the best Return-On-Investment,
has never been greater than right now. At the threshold
of this complex challenge, MPM disrupts the current
marketing landscape to build, versatile, robust, scalable
and responsive mechanisms which takes marketing to the
next level of quality enhancement.
A variety of channels are used in the current scenario to
harness marketing investments.
Return on Marketing Investments (ROMI) is gaining rapid
popularity. This popularity has been driven by the need
for repositioning marketing, from being a cost center to
becoming a strategic driver of businesses value.
“Marketing investments” is a challenging subject. The
concept is simple; for every dollar that we spend on the
marketing, we must get more than a dollar back (often
in the form of recognizable sales revenues). The more
we get in returns, the more we shall continue to invest.
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But from perspectives of finance or accounting, it is not
that simple. An investment is not formally recognized just
because money is being spent on marketing, not unless
it somehow ends up on the balance sheet as an asset.
So from the strict perspectives of accounting, spending
in marketing is rarely considered to be investing. It is only
costs of conducting business. In such contexts, the term
“ROMI” does not make sense. It is not accurate.
A person can claim that marketing results actually do end
up in balance sheets under goodwill’s or intangible assets.
Reputation and brands have monetary values. People see
this clearly in acquisitions, with focus on branding. This can
be seen as investments from the perspective of accounting.
There are standards as to how to value brand’s that is the
“ISO 10668”. This standard, while it defines actual values
of brands, it does not define the activities of marketing
which builds these values.
Details and words are important. However, regardless
of whether you call your marketing whilst spending an
investment or a cost, it is equally important to keep track
of how you are spending it. You have to do comparison of
budget to actuals, thereby keeping track of outcome for
the business. Formalities as whether marketing spend is
cost or investment make an interesting topic for discussion.
But regardless it is difficult to keep the spending under
proper control, especially for organizations that lack proper
IT solutions designed for optimizing marketing activities
from A-Z, covering the full aspect of resources as well as
effects.
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#3. The 6 A’s of successful MPM
Alignment – Best in class marketers serve the organization
by taking an entirely different approach when it comes to
aligning business and marketing. This factor is known and
marked with statistical and insightful significance. Business
results are a direct line of demarcation between marketing
activities as well as investments which go beyond sales
activities. Marketing in any organization with Marketing
Performance Management serve to facilitate a perfect
alignment in a consumer centric scenario, which has a
great impact on business results.
Accountability – Valued marketers working alongside
Marketing Performance Management strive to develop a
framework which tends to report as well as measure the
Key Performance Metrics pertaining to the contribution of
marketing to the day-to-day running of the organization.
Analytics – All data needs to be synthesized to gain
insights about consumer behavior so that smart investment
models can come into the picture. Analytical muscles have
to be flexed to enable the marketing department to give
best results.
Automation – The replacing of manual ad-hoc processes
with systemized workflows, and the automation of
communication execution in various channels, represents
a great opportunity for MPM – much thanks to all the data
generated which can be used as insights for performance
measurement.
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#3. The 6 A’s of successful MPM
Alignment – Best in class marketers serve the organization
by taking an entirely different approach when it comes to
aligning business and marketing. This factor is known and
marked with statistical and insightful significance. Business
results are a direct line of demarcation between marketing
activities as well as investments which go beyond sales
activities. Marketing in any organization with Marketing
Performance Management serve to facilitate a perfect
alignment in a consumer centric scenario, which has a
great impact on business results.
Accountability – Valued marketers working alongside
Marketing Performance Management strive to develop a
framework which tends to report as well as measure the
Key Performance Metrics pertaining to the contribution of
marketing to the day-to-day running of the organization.
Analytics – All data needs to be synthesized to gain
insights about consumer behavior so that smart investment
models can come into the picture. Analytical muscles have
to be flexed to enable the marketing department to give
best results.
Automation – The replacing of manual ad-hoc processes
with systemized workflows, and the automation of
communication execution in various channels, represents
a great opportunity for MPM – much thanks to all the data
generated which can be used as insights for performance
measurement.
Alliances – Marketing does not exist on its own. It has to
form explicit and expert alliances with IT, Finance and Sales
departments and also the product and service portfolios.
Original source of the 6 A-concept is VisionEdge Marketing Inc.
Author: Laura Patterson.
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Assessment – Benchmarking as well as
improvement continually lies at the heart
of the assessment of the marketing
department. All these fall under the
auspices of a user centric culture where
the focus is on improvement amongst
management, stakeholders,
and employees. Herein steps
in Marketing Performance
Management aspiring valued
marketers to become
centers of excellences.
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#4. MPM in an Agile World
The Agile is the in-thing in the contemporary business
scenario of multichannel fast paced economies where the
marketers are not entitled to months of time and energies for
a single marketing project. To produce and innovate on the
fly is their motive. CMG Partners released the results of its
sixth-annual CMO’s Agenda which clearly states that “Agile
for Marketing (A4M) drives long-term marketing strategies
with short-term, customer-focused iterative projects that
improve responsiveness and relevance. It allows for faster
creative, more testing, smarter improvements and better
results.”
Sixty-three percent of CMOs rate agility as a critical priority
while only forty percent rate agility as their second nature,
as defined in the above mentioned survey. Significant and
substantial market growth is clearly depicted by those
CMOs who are agile. The CMOs need a solution which
orients the entire suite of marketing activities around a
constant set of changes to give rise to a more integrated,
collaborative end result. If an organization is agile increased
speed to market and relevant end products are in lieu.
However, a lot of CMOs are not familiar with agility in
marketing applications thereby giving rise to slower growth,
the rate of adoption is growing but it’s still a nascent
concept. Inconsistency sets in around the methodology
of agile when it is used in the marketing scenarios.
Quick decision maker organizations are driven by data and
they prioritize constantly and thereby reinforce iterative
customer centered and high value structure. The CMOs
who have deciphered the agile approach will be the first
amongst equals in the always-connected, always-on market
where flexibility and speed are the kings.
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Marketers who wait for the nest perfect slot are not keen to
take advantage of agile approaches to marketing activities
and they will refrain from making the big splash. Current
feedback from various marketing organizations firmly
reaffirm this fact.
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#5. Financials for marketing
Very few of us that are passionate about marketing, have
chosen this career because of love for accounting. But
accounting and financials are important for what we are
doing. If we can’t manage marketing financials, we have
a challenge.
Since marketing is becoming more strategic and more
integrated with sales and delivery processes, we see
stronger demands for the marketing executives to keep
track on the financials. Both in terms of costs and spendings
as well as to continuously improve the internal efficiency
of the marketing team. Getting more more and better
marketing for the same spending.
As marketing executives we are expected to stay on top
of the financial situation, besides all the work we do that
sometimes can be perceived as a bit fluffy.
On top of this, financials for marketing is different from
more traditional accounting. It is not only about allocating
funds and resources to different activities, but also about
co-funding with partners.
Setting the marketing budget
As a high level description, financials for marketeers is
about how to manage the marketing budget in the best
way. As a marketing manager you will receive a budget for
marketing spending or as we sometimes say, marketing
investments.
A marketing budget can be decided on a yearly, quarterly
or even a monthly basis. This means, of course, that the
spending is limited to each timeframe.There are some
different ways in which that budget can be decided on.
54
Some companies base the budget on a pre-defined
percentage of the sales revenue, other companies base
the budget on the last year’s spending. Another way
is to apply a bottom-up approach, where you base the
marketing budget on the activities and projects that the
marketing team plans in order to accomplish the strategic
and tactical objectives.
In real life, most companies are working with a combination
of the three approaches. The process of defining the budget
is often an iterative process or negotiation between the
CFO and the marketing organization.
Allocating funds and approval processes
When there is an agreement on the marketing budget,
the funds are then allocated to different projects and
campaigns and distributed across channels, products,
strategic and tactical marketing. We see many different
approaches to approval processes, but at the end of the
day every marketing organization are using some kind of
approval process. In smaller organizations this can be a
very light and simple way of working, you just agree over
a cup of coffee.
In other organizations, there are more formal processes.
In general, the larger and more complex markering
organizations, the more formal and process driven are
the approval processes. It can seem very tempting to
reduce the approval processes to an ”ok over the coffee”
but it will be very difficult to maintain this approach as the
company grows and you need to ensure that the marketing
message and spendings are streamlined.
On the other hand, a complex and time consuming approval
process can kill initiatives and creativity. The best way
55
forward is to work on the processes with a focus on the
tools that supports them. As long as the approval process
is streamlined, simple, quick and efficient, everyone will
accept and understand the formality.
Besides the approval process, the actual funding of the
different activities, campaigns and projects is a key area.
The distribution of marketing funds differ between industries
and companies. It can be done in a simple or more complex
way, depending on the needs for details and the size of the
organization. A large marketing organization that covers
several countries, products lines and customers, will of
course require a more structured approach than a marketing
team with only one product or a single geographic market.
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Deliver great marketing assets or internal spreadsheets?
When executing the marketing plan, there is a continuous
need to keep track on spendings. Planned costs in the
budget should be compared to the actual costs. There
is often a deviation between these, something that can
cause problems. Especially if there are uncertainties on
how much of the funds that actually remains.
There is also a more critical problem, if ”less important
activities” are eating up the fundings for ”more important
projects” the total effectiveness of the marketing team
will decrease.
There is also a very simple reason for the marketing
executives to ensure that they keep track on the spendings
vs budgets - just to keep the CFO and controlling team off
our backs. Unfortunately the traditional financial systems
does not provide the right details and granularity needed
for today’s marketing, since there are special needs and
requirements. So in every large marketing team, there are
some poor individuals who has to manually collect the right
information for different systems, clean the data and then
use sophisticated and complex spreadsheets to keep on
track. Needless to say this is very time-consuming and
prone for mistakes and endless discussions on details.
A modern and reliable system, designed for the needs
of marketing, is a huge help for a situation like this. Both
to ensure the quality of the data and to streamline the
process, freeing up resources to deliver great marketing
assets, rather than producing internal spreadsheets.
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Partner funded marketing
A big part of the marketing activities are done together
with partners. Depending on the business, partners can
co-fund your marketing campaigns or your own company
can sponsor campaigns that are managed by your partners.
We also see some costumers that are continuously using
both approaches.
In the telecom business for example, consumer electronic
brands are co-funding activities with the telecom service
providers and telecom service providers are co-funding
activities with retailers and consumer electronic brands.
Yes, this is ofter very complex!
On top of the complexity, co-funded marketing activities
often represents a big part of marketing funding and
is often agreed on with special pre-requisites. So the
reporting of the spendingngs between partners is often
an important part of the collaboration. Co-funding in this
way, is quite unique to marketing and rarely supported by
any traditional financial systems.
This complexity is just a part of the business and we have
to live with it, one way or the other. Some companies are
trying to simplify, for example by distributing the marketing
budget to each product unit or to each country. Others are
going the other way and centralizing the marketing budget.
Either way can work, depending on the circumstances
and culture.
The best way is probably to ensure that you have a
solution in place to support and to automate the marketing
financials. Unfortunately, not many of the financial systems
are implemented in a way to ensure this. On the contrary,
we more often see customers struggling to get the right
information out of their old, legacy financial systems.
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#6. Improving Marketing ROI
At Musqot, we are passionate about helping our customers
to improve the return of their marketing investments, their
Marketing ROI. Helping our customers to work smarter,
more efficiently and enabling them to make their marketing
more effective.
The purpose of marketing ROI is to maximize the business
outcome of marketing spendings and to increase the
efficiency of the marketing organization. It has no intrinsic
value, the number itself is not that relevant. So keep the
eyes on the ball - the focus is to improve the business
outcome and to work smarter.
Some organizations are working with marketing ROI as a
math exercise, just to get a number out of it. At Musqot,
we think this approach is an oversimplification.
Metrics are very important, but a single number can be
misleading. For example, if you are just doing this as math
exercise - your relative ROI can increase while the actual
business results decrease. So although marketing ROI is
a strategic metric, it is not the only metric and perhaps
not even the most important, at least not unless it is put
in the perspective of total revenue volumes (actual as
well as targeted).
Boosting marketing ROI requires work on two fronts. One
side is to increase the efficiency in the internal processes,
working smarter and removing any clutter. The other side
of the is to focus on the marketing activities that are most
effective, and continuously striving towards raising the
effectiveness of the others.
So we need to find the best metrics for both the internal
efficiency and the business outcome of marketing. This
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will require some thinking and a good understanding
about the current situation as well as the objective. Is the
key objective to produce more marketing assets with the
same resources or is it more important to cut the leadtimes from idea to activity?
Same thing with the business outcome! Depending on
the business and the industry, there are different metrics.
The actual sales revenue is a great metric for fast moving
consumer goods, but not so relevant in a B2B environment
where the sales process is 9-12 months or longer.
It is also important to consider how to use strategic and
tactical metrics. Consumer awareness or brand recognition
for example, takes long time to establish and to maintain.
They also have a huge business value. Facebook likes on
the other hand, are great to quickly see if a message is
flying, but rarely provides any direct links to sales.
Finally, don’t let perfect be the enemy of good! The
focus and overall objective is to continuously improve
the business outcome and the internal efficiency. Keep it
simple, and keep working with that objective.
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#7. MPM Procurement advice
Subscribed cloud service
The most scalable and cost efficient option is to select a
true cloud application, which you can use as a subscribed
service. These services are often sold on a user account
basis, making it easy for your organization to start with a
small pilot group and then gradually expand until all your
marketers, and other internal/external stakeholders, are
using the service.
Proven platform technology
Stay clear of proprietary platforms! Choosing an application
with unique and exclusive features is fine, after all you will
benefit immensely from an application with dashboards,
workflows, tabs and graphic interfaces that are customized
specifically for marketing user scenarios. However the
underlying platform technology should be as standardized
as possible.
Applications built on custom technology all the way through,
even in the infrastructure and platform layers, will grow
old quickly – and it will then be costly for the application
provider, and their clients, to upgrade and maintain stability
and performance.
Usability is king
It doesn’t matter how advanced and extensive functionality
a certain application is equipped with - it will not fly unless
users can manage to understand and appreciate it. So don’t
make the mistake to pick whatever application has the
most “checks” in the requirement specification, because
62
chances are that many of those features might not be
within practical reach for your organization’s users anyway.
Needless to say, advanced functionality and usability
does not necessarily have to compete with each other.
Try to find a good match, just remember which one is most
important to determine the success of your implementation
in the end.
#8. Impressing the executive team?
Marketing managers are often struggling to gain full respect
from the executive teams. The reason is often pretty simple,
it is because of the information they present.
The executive teams are looking for numbers and KPI’s
that shows business value. Sales numbers, production
costs and other efficiency metrics. Business data that
can be used to make decisions to improve the business.
Marketing managers however, are often presenting other
types of data. For example advertising reach, number
of visitors at events, hits on the website and likes on
Facebook. These are important metrics to manage the
daily operations within a marketing team. But they are
not the kind of business metrics that the executive team
is looking for, since they are not directly linked to any
business results.
There are better metrics and smarter KPIs that marketing
managers could use to grow the respect from their executive
teams. At Musqot we often recommend our customers to
measure the number of leads. This is a simple and very
powerful metric. It is easy to follow up and to link to the
marketing activities and you can also attach a value to
each lead. Provided that you know the closing ratio and
average deal size – you can easily calculate the value of
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each lead. And since the leads can be linked to a specific
marketing activity or a combination of activities, it is a
great KPI that clearly shows the business contribution of
the marketing organization. Measuring the number of new
leads and correlating them with the marketing activities
is one of the easiest and yet most valuable marketing
metrics for B2B companies.
For B2C companies, it is often easier to identify the
relationship between marketing efforts and revenue.
Although it can be challenging to directly correlate a
marketing activity to the sales, there are some short-cuts.
One is to isolate sales revenues and marketing activities
during a specific period of time, and visualizing them in
the same calendar view. Simple and very powerful.
So what the marketing managers need in order to get the
recognition they deserve, is simply to be equipped with
the right information, the right KPIs. To be prepared with
relevant business metrics, rather than ”vanity metrics” such
as hits on the website, no of visitors or likes on Facebook.
#9. Marketing efforts, efficient and effective!
This week we are honoured to invite a guest blogger
here on musqot.com/news-blog Jussi Pullola is a senior
consultant at Vere Oy, and a specialist on the topic of digital
business transformation. In his post he shares a number
of interesting views on why some organizations are still
(in 2016! not addressing Marketing ROI as a top priority.
Thanks Jussi – for sharing this wake up call!
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Marketing ROI should not be measured?
“Marketing ROI is not interesting, we do not measure it.”
I remember having read such a sentence in a random
article / interview some time ago. And this bothered me –
why would it not? The first time I came across this concept
was in the early 2000s, and the same challenges still
probably exist in the B2B sector. We measure almost all
the activities of the company using a number of methods,
be it production, logistics, sales or economy, but we still
do not respond to the marketing efforts. Strange.
I wonder if the reason for the lack of interest is the fact
that ROI measurement has always been quite difficult. It
is easier to measure the so-called easy marketing metrics
– page visits, clicks, pages, CTA conversions, campaigns,
attractiveness, visibility, brand awareness, etc. But what
about those nasty sales figures? What if the campaign
carried out by our advertising agency that we were excited
about was not really as good as we imagined it to be? Or
if it was good, why was it a success, and where and for
which target group did it work the best? Is marketing still
planned with feelings instead of numbers? What is the
proper efficiency and effectiveness of business marketing
efforts?
What is the proper efficiency and effectiveness of business
marketing efforts?
One reason for the lack of interest might be the established
practices and attitudes. Marketing has always played an
important role in building corporate image and production of
the material, but it has not necessarily been an integral part
of our customer-oriented sales management experience.
If marketing has been a part of the so-called normal cost
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structure, the effectiveness of the business might not
have been in the interest of the top management. There
are exceptions to this, of course. To my delight, I recently
encountered very successful marketing-oriented companies
that have embraced the new customer-oriented thinking
and have changed their behaviour. These companies
stand out because of one positive factor – the results.
At what stage are the marketing organizations trained to
use and benefit from a CRM system?
I have been involved in a number of CRM projects and
training sessions, and the fundamental goal has always
been to get the sales organization motivated to use the
system as a whole. It has not been easy; not for me either.
But at what stage are the marketing organizations trained
to use and take advantage of the system? And what about
other experts who are involved in the sales and marketing
processes? I believe that these objectives often come
secondary to the first objective, i.e. to bind sales personnel
to use the solution. However in practise it would be much
better to include the marketing scope already from step 1.
Results of marketing are quite difficult to measure without
having the knowledge of marketing measures and ancillary
activities, and this needs to be taken into consideration
early in the CRM process.
In addition, the measurement challenge for marketing ROI
is the fact that all the marketing costs should be clearly
connected to the business as a whole including expenses
and sales revenue. How do you measure the real cost of
marketing measures during all the stages? This can be done
by beginning with the use of organization’s own resources
as well as other external services, such as advertising
agencies, web-partners, printers, event organizers, etc.
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Do you get really the allocated costs without special and
difficult calculations, and can you demonstrate if these
measures create some sort of impact on the business? If
an online measurement is possible, then what about the
other offline marketing actions?
What could be done to make marketing ROI one of the
business management tools?
The first step should be to give up the so-called spreadsheetmarketing – when the marketing plan is created by a
spreadsheet program. I confess that I have used this
method a lot and for far too long. Excel is a great tool for
processing data, but if marketing plans are being carried
out with this method to this day, it is time that we wake
up. Is a spreadsheet plan / a file integrated with other key
management systems? Is this plan visible throughout the
sales and marketing organizations in the implementation
of different stages? I congratulate your company if this
is the case, but I would argue that doing so is quite rare
and difficult.
Measurement of marketing ROI is challenging. However,
this does not mean that it should not be pursued because
it is possible. If you want to see the impact of marketing
investment on a business, even in a little more detailed
level, be it for electronic or printed products, measuring
ROI will be worthwhile to invest in.
I would argue that spreadsheet-marketing is dead and
that new marketing tools are quickly invading the field
of marketing. Who in the responsible of marketing would
not want to know, whether his work can impact on the
company to make profit?
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#10. Marketing in the new service economy
SaaS, Software as a Service, was one of the first steps
towards the service economy. Now we see other industries
and products taking the same path. Caterpillar asks their
customers how much earth they need to move – not how
many machines they want to buy.
Same thing with Rolls-Royce – they ask their customers
how many hours they will fly, not how many jet engines
they want to buy. This road towards a service economy,
where we pay by the usage and not for the ownership is
growing at ballistic speed. Why pay for the ownership of
a car, when you can pay for the transportation?
IoT, Internet of Things, is one of the technology enablers
to the service economy. Without connected products
and devices you can’t deliver SLA’s or even measure
the usage. But IoT will also be important from another
perspective. All these connected products and devices
will continuously improve the way they deliver value. Both
by learning about their environment and usage as well as
delivering continuous upgrades with new features and
improved functionality.
Together, the service economy and the IoT are fueling
each other to create a perfect storm.
One part of this perfect storm is that the customer
expectations will shift, from buying a product to subscribing
to a service. A service that continuously will become
better and better. Customers are moving from a product
experience to a subscription experience.
Service economy will obviously drive a fundamental change
in business models and the way we manage the companies.
An important change is that the customers are no longer
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profitable from day one, when they sign the deal, but will
become profitable over time.
Marketing is one area that will be impacted by these
changes. When customers are paying for the usage, with
a subscription model, the old school of marketing is no
longer relevant. The classic sales and marketing funnel
is becoming outdated. The deal is not closed when the
customer buys the product, as it used to be. Instead there
is a new long term customer relationship that starts. And
the customer will not be profitable unless they are happy
with the service that they subscribe to.
From a marketing perspective, this is a fundamental shift.
Rather than being the engine that creates new leads for
the sales teams, marketing communication is evolving into
an engine to manage the entire customer journey. From
the first contact to the continuous subscription experience.
To manage this long term customer communication, with
the focus to generate a positive user experience rather
than ”selling a cool product”, marketeers will need a
new way of working and a new generation of supporting
tools. The marketing teams must be far more agile than
the traditional 12 months marketing plan. The marketing
communications must be tightly connected to the agile
and incremental development, since the customers are
expecting the products that they use, to become better
and smarter.
It seems like an oxymoron, but to become agile, you
need structure and all the information at your fingertips.
To make continuous changes, you have to understand
the impact of them.
The need for a new generation of marketing tools has
never been more obvious than now.
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#11. Data driven marketing and the streetlight effect
Funny cartoons like this has been around for a long time
and we have all enjoyed them. The poor man is looking
for his wallet in the wrong place, since it is too dark to look
where it actually is. We are smiling and laughing with the
poor man – and then doing the same mistake ourselves!
In marketing for example, most companies want to
understand the business outcome of the marketing
activities. And it is very common to use metrics like website
hits or likes on Facebook, just because they are simple
the measure. They are under the streetlight, just like the
poor man in the cartoon.
Since the objective is to understand the business value,
here at Musqot we recommend our customers to use
metrics and KPI’s that indicates just that. For example
sales revenue, number of leads or pipeline value. These
metrics that clearly indicates the marketing ROI can often
be found in the CRM system, which is typically being used
by sales teams rather than marketing teams. But to find
what we are looking for, we need to move away from the
streetlight and start looking where the wallet really is.
#12. A marketing story from a small town in Sweden
My great-grandfather lived in, Kalmar, a small town in
Sweden, back in the early 20th century. He was a painter
and owned a small company doing different paint jobs.
There are still some churches around Kalmar, where he
did the paintwork with all the religious pictures.
But his core business was to do advertising paintings. Like
ad’s on walls, billboards, posters, windows and even paint
jobs on the first cars.
One of his key selling point, to stand out in the small
business-to-business market in Kalmar, was to focus on
”advertising effectiveness”. His marketing communication
was built on the terms ”Stylish and effective”. His advertising
jobs should looks smart and stylish but also deliver a
business value.
This is very interesting, from several perspectives. From
a personal view it is special that I work with the same
business objectives that my great grandfather, to help
customers to increase the impact of their marketing efforts.
But it is also very interesting from a historical and business
perspective. Just to realize that the business challenges
were the same for marketers a hundred years back.
To increase the impact of marketing activities. For more
than hundred years this has been a business issue and
also a business opportunity, to maximize the marketing
effects.
Even though the advertising and business has been through
several transformations since the early 20th century, the
fundamental questions are the same. How to maximize
the impact of my marketing spendings.
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A hundred years back things were less complicated, there
was not as many channels and the content production was
not as complex. At that time there was no need for tools
to drive the activity and resource planning. And from a
budget perspective, my guess is that the local fishmonger
and inn-keeper paid directly from the cash register.
It is obvious that we now need tools to support todays
complex business and channel environment. But the
fundamental need to understand the business outcome
of the marketing activities is still very similar. Just like
in the early 20th century, in small town in the Swedish
countryside.
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#13. 5 trends that will re-define B2B marketing
We see some powerful trends that are working together
and fueling each other to re-define B2B marketing. This
perfect storm will change the fundamentals and as a result
increase the strategic importance of marketing. The way
that these trends work together is very exciting and will
create new opportunities for the marketing teams.
Changes in the customer buying process
There are several studies pointing in the same direction.
Customers will drive the purchasing process much further,
before engaging with the suppliers and sales teams. This
will change the way we work with lead generation, cold
calling and the end-to-end sales cycle. Marketing will be
in the lead to drive this change.
Integration between marketing and sales
Given the new customer behavior, the old wall between
marketing and sales must come down. These are not
two different processes, we can’t separate the marketing
activities from sales. It is one single end-to-end process
– from when the customer need arises to when the deal
is closed.
Becoming agile
Changes are the new normal. We need to adapt and to
embrace continuous changes in markets, competitors,
products, technologies and business models. The good old
days when we could make a business plan in October to
cover the next year are gone. We are constantly adapting
to changes and disruptions. In order to be agile and swift,
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we need control. It sounds like a contradiction, but trying
to manage changes without control will lead to chaos.
Digital channels
This is an open door, digital channels are not new. But they
will keep growing and they will continue to re-define the
way we drive business. They will change communication
patterns, processes and the way we think about our ways
of working. The CMO will soon buy more IT than the CIO.
This on-going change is an important trend.
Measure the result
With all these trends working together to re-define B2B
marketing and to increase the strategic importance of
marketing – we will see new types of decisions. Decisions
that will require new information and new KPI’s. The
standard ones we see today, for example number of leads
and campaign efficiency, will still be important. But there
will also be an increasing need for visualization of trends
and information about increasingly complex combinations
of activities.
At Musqot we have embraced these trends and developed
a solution to support the new exciting world of marketing.
We call it re-thinking marketing.
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#14. Premium pricing – the core of brand marketing!
Marketing departments are often caught between several
disciplines where they are accountable, but don’t have the
full responsibility. Marketing is for example often accountable
for revenue growth, although it is the sales organization
that has the full responsibility. Same thing with product
collateral. Marketing teams have some accountability, but
the full responsibility is actually in the hands of product
management.
However, there are of course areas where marketing has
the full responsibility and ownership. One such area is
branding. The brand positioning is a corporate strategy –
owned and managed by the marketing & communication
department. A direct sales related aspect, which is tightly
connected with brand value, and where the marketing
function is therefore responsible, is the ability to charge
a premium.
This the soul of brand marketing – to build perceived
values that the customer is willing to pay a premium price
for. The price difference, between the premium price
and the average market price, is one way of defining the
business value that marketing delivers. A very interesting
KPI to follow up over time and apply in trend analytics.
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#15. Innovation & Marketing To Be Successful?
Innovation is a key for organizations to be successful and
even to survive. Given the continuous disruptions, new
types of competition and the ballistic speed of changes,
the capability to innovate is critical. Every company must
engage and invest to bring new products to the market.
This is a challenge from many perspective. Unfortunately
only a few of the new, innovative products will meet their
business objectives.
From a product perspective there are some important
metrics. How many new products that are released, how
much of the total sales that are delivered by new products
and how much the R&D teams are investing in developing
radical innovations. Just a few examples on how to measure
innovation. From a marketing perspective we don’t see
metrics like that.
Very few organizations follow up on how much of the
marketing budget is spent on new, innovative products
and services. This is a strategic problem. Organizations
that don’t have control over the marketing budget, in
regards to innovation, are exposed to a huge risk that
both the investment in R&D and marketing are wasted.
If they don’t allocate enough resources, they are putting
the entire business at risk. If they spend to much, there is
an obvious risk that the overspending is wasted.
So the marketing organization needs a good platform to
know where they spend the budget and how they spend it.
This balance between the spending on disruptive solutions
and the traditional products will differ from company to
company and from industry to industry. But there is an
important characteristic for the successful companies,
regardless of the market.
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Successful companies are data driven and make their
decisions and priorities, based on analysis and facts. They
can see from day one if a campaign is successful or not,
by comparing with historical data. And to know, based on
facts and numbers, how much money and resources are
spent on innovative products and solutions.
#16. What to measure – and why?
Often when we meet with CMOs they tell us about their
frustrations on how to follow up or measure the results
of their marketing activities. Everyone agrees on the
importance – but they are struggling with where to begin.
Much of this frustration is based on the abundance of
information from so many different sources. Where to start,
everything seems to be important?
A good starting point is to reflect about what decisions you
want to make. And then to analyze what data you need to
make those decisions. For example, if you want to verify
if a new marketing campaign is on track and to decide if
you need to take any actions, you will need a first, basic
indication, for example hits on a website. You also need a
reference, to compare that number of hits with a previous
campaign that was successful. Now it becomes obvious
what data we need for this decision; historical data and
current data on the number of hits on the website and an
example of a successful campaign to compare with.
When you have this information you can make a fact based
decision on whether to run the campaign as planned or if
you need to make any changes. Now, lets assume that the
first indications shows that the campaign is not working as
planned, you will probably make some changes.
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But to make these changes you need to understand the
impact, on budgets, resources and other activities. If you
need to reschedule other activities, what will the impact
be on other strategic initiatives, on other campaigns. By
following a decision process like this, you will get a good
understanding of your actual needs for information and
data. Even though this is a very simplified example, it
highlights how you can identify the need for KPI:s based
on your needs, rather than what is available.
Information and data by itself is of little value – until you
need it to make a decision.
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MUSQOT APP
FROM A
CUSTOMER
PERSPECTIVE
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Flexible solution for managing our marketing plan and
performance metrics
“We have chosen to work with Musqot for their solution’s
flexibility, which lets us setup marketing plan hierarchies,
workflows, dashboards and performance metrics – based
on the requirements that are relevant specifically for our
marketing operations here at Lavazza”
Lavazza Nordic, Robert Ameln (Managing Director)
★★★★★
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Selecting Musqot after evaluating different options
“At Sqore we have been evaluating different options for
“marketing planning & performance management systems”,
and came to the conclusion that we wanted to go for the
Musqot solution.”
Sqore, Maria Paulsson Rönnbäck (COO
★★★★★
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Highly customizable calendar to suit your needs, & best
customer support I have ever experienced!
We were looking for a complete solution for tracking a
complicated marketing system with different locations,
budgets, users, tasks, channels, etc. Musqot was the ONLY
Salesforce app we found that met our requirements. We just
finished customizing our version and are impressed at many
of the features that weren’t even in our requirements. Here
are a few of the features we are currently excited about;
•We can easily see the remaining budget for a project, location or year.
•We can assign tasks to coworkers.
•We can share files, comments, links, assign tasks, create polls, all from
the musqot chatter sidebar.
•We can see all projects, tasks, milestones, etc on the Gantt view. Musqot
even shows us which product or channel the activity is associated with
by using icons and color labels.
•We can customize many of the items ourselves, but Musqot has been
amazing at implementing our customization requests themselves.
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We work with many vendors, but none communicate as
clearly, quickly or patiently as Oscar and his team at Musqot,
who consistently provided simple, well thought-out solutions
to complex problems. We highly recommend this solution
and this team.
Bordner Installation Group, John Schroeder
(Marketing & Technology Director)
★★★★★
Smart app to plan, organize and squeeze the most out of
the Marketing campaigns
We have a need to increase our marketing efficiency,
and this App helps us optimize marketing processes and
results. Musqot is easy to install and use, and include
powerful features to plan, organize and evaluate marketing
activities. The dashboards are great for marketing analytics
and solve many of our previous reporting challenges. The
Gantt view provides a graphic visualization of all aspects
of our marketing plan.
Intelliwell, Fredrik Forssberg (CEO)
★★★★★
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Multi-faceted with great customer support
Since we use force.com, we did not have any marketing
objects available. We could have added custom objects
but while researching our options, we discovered Musqot.
This multi-facted, multi-layered application provides a
comprehensive record of all of our Marketing objectives,
plans, campaigns and activities associated with each
campaign. We are able to assign budgets per plan or
campaign and track the actual expenditures against those
budgets. All of this is also viewed by a Gant Chart which
provides a color-coded, ‘date range specific’ view of our
marketing initiatives.
I would really like to share how attentive and helpful
sales and customer support proved to be in our process
of buying the application and especially the initial set
up in Salesforce. We must have communicated daily for
a several weeks while determining the the best way to
set this up for our organization. Along with instruction
and best practices support, the Musqot team provided
assistance as to how their model woould work with our
plan and could be greatly customized to help us achieve
optimal results. I sincerely appreciate how effortless the
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implementation was considering the amount of informaton
we wanted to enter into the system and track. All of this
was implemented with the low cost of the app and the
very gracious support of the team.
Archer Well Company Inc., Nancy Franklin
(Salesforce Special Projects Lead)
★★★★★
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