The Marketing Strategist:

Featured Research: Are You Measuring Activity or Outcomes?

June 13, 2013

When talking about performance, marketing needs to adopt the metrics, language, and sought-after outcomes of the business. Otherwise marketers will be deemed irrelevant—or worse. ITSMA’s 2013 Marketing Performance Management study, completed in May, surveyed over 400 B2B marketers to discover what they measure, how they measure it, and to whom they communicate those measurements. It found that few in the C-suite use marketing data to make business decisions. The reason is that most marketers aren’t measuring the things that the C-suite cares about. Most marketers focus on measuring activity and efficiency, largely because it’s easy to measure. It is easy to count the dollars you spend and the emails you collect. It is not a big additional step to tally sales and divide by the cost of the campaign or event that generated the prospects, yielding an ROI. But there are two problems with this approach. First, measures of activities without outcomes say nothing about how business value is created. It’s not necessarily the case that that no value is being created—just that the metric says nothing about it. What you’re measuring is a cost. And costs get cut. Second, even if there is an outcome (a sale, for instance), an ROI approach focuses less on the outcome than on the efficiency of achieving that outcome. To a CFO, an ROI is an invitation to ask for a higher ROI. If you’re achieving a 50% ROI, what can you do to get it to 75%? Lower the cost of the campaign or increase the revenue that it generates. The more difficult—but ultimately more valuable—approach to measuring marketing performance is to focus on outcomes. This approach starts with strategic objectives—market share, customer loyalty, share of wallet—and works backwards to estimate marketing’s contributions. But only about one-fifth to one-quarter of marketers surveyed make an attempt to do this. If marketing data isn’t used by the C-suite, this is one of the reasons. Featured research June 2013

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