Aligning Strategy to Maximize Marketing Effectiveness

The rise of the CMO meant that marketing leaders no longer reported to Sales, but rather gained a place in the C-Suite alongside their peers. With it, came increased expectations for results—performance in form of financial returns. The days of campaigns exclusively targeted at “brand awareness” seemed all but extinct.

Yet, despite the common challenge of having to connect the dots between marketing execution and business value, it’s a chasm that many organizations still struggle trying to cross. Those who do are lauded as heroes and those who struggle to pinpoint results (even when they may exist) are, sadly, often shown the door.

Content Summary

Introduction
7 steps that start your journey
Traveling in the same direction
Defining alignment
Don’t tell me how, show me the results
Dashboards in your future
Actionable dashboards
Data & analytics
Big data will help you get the answers
Analytics
Optimizing marketing: metrics & measurement
Performance setting & tracking
Conclusion

For nearly two decades, VisionEdge Marketing (VEM) has conducted a Marketing Performance Management (MPM) survey of leaders across a myriad of industries. Despite the emphasis now placed on data-driven results, VEM’s data suggests that limited progress has been made. In 2016, 10% of the 446 respondents assessed their Marketing organizations as completely ineffective in measuring Marketing’s performance, compared to only 12% who answered completely effective. The vast majority of respondents (3 out of 4) selected “marginally effective” as their answer.

These results are not new for 2016, rather they represent a trend in the survey data going back over a decade. The challenge of connecting Marketing strategy and objectives to campaigns, programs, and tactics will only become increasingly important as Marketing budgets grow and additional resources are spent on martech solutions.

Consider this article your road map—a guide to putting into place the measurement and processes needed to accomplish this difficult, but not insurmountable task. Joining VisionEdge in presenting you this eBook is Hive9, a leading provider of solutions for Marketing performance. We hope our combination of expertise will be the first step toward improving strategic decisions, performance and Marketing measurement.

Introduction

Albert Einstein defined Insanity as: Doing the same thing over and over again and expecting different results.

Texans say, “If you do what you did, you’ll get what you got”.

Improving and refining what you do today, will change your results tomorrow. If you are not satisfied with the way things are, then change them. Consistent gathering and evaluation of information will lead you to better decisions and better results. Isn’t that really what it is all about?

While MPM and measurement is not new, the current business climate has increased the emphasis on marketing accountability and analytics. Even improvements in the economy will not diminish the C-Suites focus on marketing accountability, effectiveness and measurement.

Joan Ritter wrote in The Technology Executive, “huge leaps in technology, together with the instant gratification of real-time campaign measurement in Internet marketing, have converged to bring the issue of marketing accountability to the front page of the business section.”

More than six in 10 CMOs say ROI on marketing spending will be the most important measure of their success (source: IBM Global CMO Study).

Marketing accountability requires marketing professionals to have data, analysis, and measurement skills. They must be fact-driven. This will require a significant cultural shift and changes in the personnel roster.

7 steps that start your journey

Wondering which way to go next? Here are 7 easy steps to get you heading in the right direction on your journey:

1. Alignment: Establish direct-line-of sight between marketing initiatives and investments and business outcomes
2. Metrics: Create outcome-based metrics and maintain a metrics catalogue.
3. Data: Leverage accurate and timely data. Develop a Data Dictionary and Data Source Inventory, store this information in an accessible format, and update it regularly.
4. Analytics: Hone your analytics skills so you can gain insights from your data and build models.
5. Performance Setting & Tracking: Commit to set outcome-based performance targets for every program and track results.
6. Dashboard: Produce an actionable marketing dashboard that quickly and visually conveys your contribution to the organization and facilitates course adjustments.
7. Refine It & Start Over: Keep in mind that continuous improvement takes a “reiterative process.” What you do today will feed back into the process in the future. In this way we learn from each activity and adjust our future actions accordingly.

Benefits of Mapping:

• Exposes orphaned activities
• Synchronizes investments with outcomes
• Facilitates performance management

Traveling in the same direction

Just as your car runs more smoothly and requires less energy to go faster and farther when the wheels are in perfect alignment, you perform better when your marketing is in alignment with the business. It’s time to hit the road towards improving your Marketing organization. When marketing is in alignment with the business, you are much more likely to travel in the same direction. Following our road map the first step is to address the issues of alignment and accountability. Alignment and accountability are inextricably linked and are the cornerstones of any successful Marketing organization. Without alignment between Marketing and the business, it’s impossible to quantify Marketing’s value to the business, and select the right metrics.

The most sophisticated data collection and analysis can be completely undermined by the lack of proper alignment.

Best-in-class Marketing organizations create a direct line-of-sight between their marketing investments and activities, and the business outcomes. Alignment enables Marketing to clarify the strategic intent of all the investments it makes, and to measure and communicate the degree to which Marketing delivers on its commitments.

Are you wondering whether you have alignment? You will know that you have achieved proper alignment when:

• Marketing projects are prioritized based on their value and impact to boarder organizational outcomes, not on what has the most political capital, is easiest to do, the most familiar, or the furthest behind schedule.
• There is a direct line of sight between investments (money and people), objectives, program strategy and tactics.
• Each member of the marketing team understands their role and what actions they must take to achieve the business outcomes.
• It is clear who is accountable for enduring execution of initiatives, projects and tasks.

Defining alignment

Finding the right path to proper alignment can seem pretty confusing at first. Marketing groups often take a bottom-up approach to planning, with a focus on developing marketing programs that usually include some combination of what’s always been done or what they best know how to do. As a result, programs may not seem tightly connected to the business and the metrics typically used at the program level do not always demonstrate the connection between the broader business initiatives. Therefore, when quantifying marketing’s contribution to the business is difficult, the picture is hazy. This jeopardizes continued investments in marketing and can obscure the steps they should, and shouldn’t be taking.

An outcome-based approach to alignment flips this problem on its head with a topdown perspective, starting with the business’ success factors and working “down the ladder” to reveal what Marketing can do to support the business, not just itself.

Metrics and key performance indicators (KPIs) can then be established that directly tie what marketing is doing with the success of the business. Done right, alignment provides greater clarity in how marketing is expected to make a difference and providing you with that essential road map.

If you think you need to improve your alignment, then you will need an approach. There are a variety of ways to address alignment.

Don’t tell me how, show me the results

Instead of telling colleagues how important alignment between Marketing and the business is, show them by using quantifiable data. By connecting alignment and accountability, you can focus on the right metrics that will allow you to clearly see and evaluate your goals.

The American Marketing Association defines accountability as, “The responsibility for the systematic management of marketing resources and processes to achieve measurable gains in return on marketing investment and increased marketing efficiency, while maintaining quality and increasing the value of the corporation.”

A Blackfriars Communications study found a clear linkage between accountable marketing and increases in the marketing budget. Their research revealed that companies that comprehensively measured Marketing results were able to increase their marketing budgets by an average of 11.2 percent over the previous year, compared to only six percent for those without a measurement strategy — a difference of nearly double.

Dashboards Should:

• Contain the necessary gauges to tell you where you are, where you’re going and at what speed—along with indicator lights that illuminate at the first sign of a problem. Marketing programs are investments that are intended to deliver specified benefits, so your dashboard needs to indicate when one or more benefits are at risk.
• Enable your marketing organization to measure, monitor and manage business activity using both financial and nonfinancial measures.
• Provide an overview of marketing objectives, and real-time insight on progress toward each objective.

Dashboards in your future

Not having the right information means that decisions will have to be made based more on instinct and intuition than on facts. Whenever possible this risky approach should be avoided.

What information do you need to make those critical decisions? Having the right information readily available in a manageable and comprehensible format is essential for success, and this is where you will find that a dashboard will be worth its’ weight in gold.

What exactly is a dashboard? Stephen Few, the author of Information Dashboard Design (2006), defines a dashboard as “a visual display of the most important information needed to achieve one or more objectives; consolidated and arranged on a single screen so the information can be monitored at a glance.”

A well-designed dashboard provides data in a summarized graphical format, and will alert their users to performance values significantly above or below expectations. Once you have the right metrics, data and analytics, you can develop your multilevel dashboard to manage and report on performance.

The findings from the annual MPM studies suggest most of the organizations surveyed already recognize the need for a M2arketing dashboard. Always keep in mind that for your dashboard to be an accurate representation of your organization it may need to change over time. Your dashboard must be able to keep up with anything that will impact your marketing efforts.

Actionable dashboards

A good Marketing dashboard conveys marketing’s contribution to the business. Many marketing organizations have reporting capabilities within their marketing automation, campaign management, web analytics, and customer relationship management systems. These reports often provide transactional information but often do not make the connection between marketing activities and business impact. This is one of the key functions of a Marketing dashboard.

Dashboards only work if they are tied to a structured action process. It must do more than just measure marketing–it needs to be used to foster strategic decisions and enable course adjustments. A good dashboard is a visual graphic representation that demonstrates both Marketing’s alignment to the business as well has how Marketing is contributing to the business and attaining its performance targets in terms of results, time, and cost.

Better decisions are a direct result of accountability. Marketing must be measured, tracked and reported on over time, and adjusted when needed. Accountability, by its nature, means monitoring and reporting. Marketing reporting typically takes the form of a performance dashboard. Before you can produce the dashboard you need to be able to perform the appropriate analytics. Analytics take data.

Dashboards Also:

• Facilitate decisions and foster action
• Show how marketing is moving the needle
• Assess what is and isn’t working and facilitate course adjustments
• Provide a unified view into Marketing’s financial contribution, impact, effectiveness and efficiency

Data & analytics

There is no problem at all in gathering large piles of “data.” Information overload is a real part of nearly everyone’s life. The trick is to gather the essential information you need as input without getting bogged down in the info that isn’t helpful. By starting with the business outcomes and aligning marketing efforts with these, marketers can focus on metrics that matter to you and the rest of the leadership team.

Data management is often biggest challenge for most companies when it comes to the adoption and usage of metrics. Many organizations still struggle with data accuracy, integrity, and consistency. The sheer amount of data and varied types only compound the issues of consistency and accuracy. A recent SAS-sponsored study of 586 senior executives found that while data collection in their organizations has increased, most of the useful and valuable data goes untapped. For some marketers, there is even the issue of data access.

Data Source Inventory: Too much data can slow you down. Creating a data inventory can help you get a clear idea of what you need. Data inventory should list the following:

• All your data sources
• What data is in each source
• Where the data comes from
• The primary purpose for it
• How frequently it is used and updated
• When it was last cleaned up and by whom

Big data will help you get the answers

Getting the big answers to some questions will require the use of very robust analytics. Some data questions require large sets of data, or Big Data. A recent study found that almost half (49%) of US data aggregation leaders defined Big Data as an aggregate of all external and internal web-based data.

Big Data isn’t new and it is now recognized as an essential component of successful marketing operation. Before you can effectively use metrics and analytics, you must be able to manage your data. This can be extraordinarily difficult if your data is siloed. To be useful, data must be accessible and integrated. This is a challenge because the data needed to measure Marketing effectiveness and perform analytics is often housed in disparate systems.

Successful use of metrics and analytics to get the answers you need requires the proper gathering, storage and analysis of the significant data at your disposal. Once you understand your data you’ll be able to connect and use it. There are two steps any company can take to move their data management, metrics and analytics efforts forward. First, inventory your disparate data and second, address data gaps. These two steps entail creating a data source inventory and dictionary.

We recommend that you categorize your data by subject area so the output can be structured in way that the next person won’t have to repeat your work. Don’t be surprised if you find there are inconsistencies in your data. This is common and one of the valuable outputs from the inventory. Once you inventory your data, you will be able to determine what kinds of gaps exist and what data from which source you will need to perform the analytics. This step will help with pre-processing and as you embark on your analytics the insights might identify potential data filtering options, which you will want to reflect in the inventory.

Once you complete the data source inventory you can use it as the basis for your data dictionary. The dictionary defines and describes your data, includes titles, captions, and how the data is displayed. It also includes a description of the attributes for each of the columns and tables associated with the data.

Analytics

Businesses tell us they believe in the concept of using analytics to drive decisions. Yet, a Bloomberg Business Week Research Services study of 930 businesses across the globe in various industries found that only one in four organizations believes its use of business analytics has been “very effective” in helping to make decisions.

Even though more than half of the companies in the survey said that they rely heavily on data and metrics when making decisions, many admitted that intuition and business experience still tip the scale when it comes to decision-making.

In 2005, Tom Davenport, Don Cohen, and Al Jacobson, shared the results of their work in the area of using analytics to create a competitive advantage. This work resulted in the well-known book, [Competing on Analytics: The New Science of Winning} (Davenport and Harris, 2007) which discusses how high- performing enterprises are using sophisticated quantitative and statistical analysis and predictive modeling now as the basis for their competitive strategies.

Despite these advances, marketing professionals remain challenged in regards to analytics. We often encounter three questions from marketers on the topic. These questions essentially boil down to: what is meant by analytics, what do we need to be successful with analytics, and how can marketing use analytics?

The first question, what do we mean by analytics can be answered by turning to what has become a common definition. Analytics are algorithms advanced and/or mathematical techniques on large volumes of data. Business analytics require data analysis to guide decision-making and address business issues and strategies. Businesses use the insights derived from analytics to optimize internal processes and reduce the amount of time required to solve problems and make decisions.

While analytics may not fully replace experience and knowledge, they certainly provide insights and color that should be taken into consideration. The answer to the first question provides the answer to the third question. Marketers use analytics to translate data into actionable insights to help drive marketing and customer strategies and optimize Marketing efforts.

Data and Analytics Best Practices:

1. Identify and inventory critical data elements
2. Establish a data infrastructure that includes technology, skills and tools
3. Define and implement a data collection process
4. Enable access to data across different databases
5. Use data to build simulation and predictive models
6. Leverage a variety of data mining techniques
7. Take disparate data and merge it for decision making purposes
8. Deploy statistical techniques for data interpretations

Optimizing marketing: metrics & measurement

With this information in hand, the next step is to apply the information in a way that will optimize your marketing effectiveness.

Wondering which way to go next? You’ve passed alignment, data, and analytics and now you’re ready to reach the measurement and metrics destination on the map. You really cannot optimize your Marketing effectiveness by skipping metrics and measurement. Metrics are the foundation for performance management. Understanding the impact of marketing on your business starts with accurate measurement. Selecting the right metrics is a key step in developing a measurement framework. The right metrics are critical to ensuring accountability and optimizing your marketing investments i.e. determining Marketing’s value, contribution, and impact in relation to finding, keeping, and growing the value of customers.

The key to selecting marketing metrics is to choose those performance metrics that directly measure Marketing’s impact on the business. You must select those metrics that provide the insights you need to make critical decisions. Proper alignment will reveal the relationships between output and outcome metrics. It helps to have a framework for your metrics, such as the one we’ve created.

There’s no silver bullet marketing metric. No single measure completely encompasses the value and impact of marketing.

Performance setting & tracking

Once you know where you are, the next step is to determine what direction you must head to be able to reach your destination. With alignment and metrics in place, it is essential to enforce a strict policy of setting performance targets for all marketing objectives, programs and activities.

Tying marketing metrics to outcomes improves the quality of the marketing objectives and facilitates collaboration and agreement between marketing and the leadership team. People perform to how they’re measured. So, if the metrics are based on activity or output- such as traffic to the website, open rates, etc. that’s what you’ll see even if that’s not what will help the business.

Replace broad brush targets, such as creating more awareness with an outcome and cost target for every marketing activity. Marketing must then track and report on the performance and costs.

Store the results in a database so you can use the information to help set targets in the future. This step is about having the discipline to consistently establish realistic performance targets and capture marketing performance. Only with this type of information can you truly begin to understand the value and impact of your marketing investments.

Conclusion

Taking the steps we have outlined for you will put you on the road to a much more successful Marketing organization. Proper alignment between Marketing and the rest of the company will result in a much clearer understanding of the challenges you face and the valuable contributions Marketing makes.

Gathering and analysis of essential information will allow you to make critical decisions about the allocation of your resources. Proper leveraging of your resources will inevitably result in an improved results, and that is the bottom line for how you and your organization are evaluated.

Remember:

• Improving and refining what you do today, will change your results tomorrow.
• If you are not satisfied with the way things are, then change them! Consistent gathering and evaluation of information will lead you to better decisions and better results.

Source: Hive9