making marketing relevant to the business 2013 mpm study results webinar
DESCRIPTION
Join Laura Patterson of VEM, Julie Schwartz of ITSMA, and Laura Ramos of Forrester for the unveiling of the 2013 Marketing Performance Management Survey Results.TRANSCRIPT
twitter hashtag:# MPM13
Welcome!• The Briefing will start shortly• All lines are muted• We do not have hold music,
so please do not hang up
AUDIO CONFERENCE
GLOBAL DIAL-IN: +1-617-614-4042
PARTICIPANT PASSCODE: 532 312 53#
ITSMA Web Briefing | June 4, 2013
Measuring and Communicating Marketing Performance
twitter hashtag:# MPM13
ITSMA Web Briefing | June 4, 20132013 ITSMA/VEM/Forrester | Marketing Performance Management Survey
Measuring and Communicating Marketing Performance
Julie SchwartzSenior Vice President, Research and Thought Leadership | ITSMA
Laura PattersonPresident | VisionEdge Marketing
Laura RamosVice President, Principal Analyst serving CMOs | Forrester
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 3Tweet at #MPM13
The future of marketing is in your hands…
“The idea of having a separate marketing department
is going to vanish.” –Gerd, Leonhard, HBR, May 24, 2013
“In many cases, senior business leaders must open
up their agendas and recognize the importance of
supporting and even undertaking initiatives that may traditionally
have been left to the chief marketing officer…
we’re all marketers now.” –McKinsey Quarterly, April 2012
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 4Tweet at #MPM13
B2B Marketing is bifurcating
Marketers earning a seat at the “table”
Marketers supportingsales
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 5Tweet at #MPM13
Does your marketing organization present its dashboard to the executive team? % of Respondents (N=170)
76
13
11 Don't know
No
Yes
Does your marketing organization currently produce a marketing dashboard? % of Respondents (N=286)
Yes60%
No40%
Many, but not all, marketers are producing dashboards and sharing them with the executive team
Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 6Tweet at #MPM13
Only a handful of senior executives are relying on marketing data to make decisions
To what extent are your key stakeholders using the data, metrics, and/or analyses developed by marketing?% of Respondents (N~383)
Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013
Relies on marketing data
to make decisions
BU or Division Leaders
CEO
16
13
9
Sales
CFO/Finance 6
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 7Tweet at #MPM13
Why isn’t the executive team using the marketing data?
Three Reasons
1. Marketing activity, not business outcomes
2. Operational efficiency, not effectiveness
3. Past performance, not predictive insight
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 8Tweet at #MPM13
Extremely Confident = 10
9
8
7
6
5
4
3
2
Not at all Confident = 1
9
12
24
18
12
10
6
5
2
255%
Most marketers don’t know which metrics and outcomes its key stakeholders care about
How confident are you that you know which metrics/business outcomes your key stakeholders (e.g., CEO/CFO/BU leaders) care about? Mean Rating (N=394)
Note: Mean Rating based on a 10-point scale where 1=Not at all confident and 10=Extremely confident.Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013
Mean Rating=6.8
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 9Tweet at #MPM13
Consequently, marketing dashboards typically report on marketing activity and associated costs, rather than reporting on metrics executives use to set direction
Which performance metric categories are included on marketing’s dashboard?% of Respondents (N=163)
Note: Multiple responses allowedSource: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013
Sales pipeline (leads, conversion rates, win rates)
Marketing spend
ROI (e.g., campaign ROI, event ROI, lead ROI)
Brand awareness/equity
Customer satisfaction/loyalty
On-time delivery of marketing programs
Marketing contribution to customer penetration/expansion/share of wallet
Marketing contribution to customer retention/loyalty
Marketing contribution to market share
Marketing contribution to category ownership
Other
77
62
53
44
33
31
24
21
19
18
6
Marketing Activity
and Efficiency
BusinessOutcomes
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 10Tweet at #MPM13
Marketers use analytics to report on past performance
Are data analytics being used as a predictive tool or to report past performance?% of Respondents (N=342)
Note: Multiple responses allowedSource: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013
79
30
14Not applicable,
we don't use analytics
To report pastperformance
As apredictive
tool
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 11Tweet at #MPM13
This is what the C-suite cares about
Shareholder Value
Customer Value
Market Share
Revenue
Profitability/Margin
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 12Tweet at #MPM13
To capture the C-suite’s attention, marketers need to create clear line of sight between marketing activities and investments with business outcomes
Source: VisionEdge Marketing, 2013
Marketing’s Relationship to the Business
Shareholder Value Revenue Market Share
Investor Satisfactionand Loyalty
Customer Satisfactionand Loyalty
BusinessOutcomes
Customer Acquisition Customer Retention Customer Growth MarketingObjectives
Preference and Satisfaction Endorsement/AdvocacyConsideration and Engagement
Marketing Effectiveness
Reliable/Trusted Channel Relevance Positioning
Marketing Programs
Marketing Activities
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 13Tweet at #MPM13
The C-suite wants marketing to paint a picture of how marketing contributes to the business
Share of preference Share of wallet Propensity to purchaseCategory growth rate Product/service adoption rate
Innovation revenue rate Price premiumPipeline volume, value, and velocity
These are the things that demonstrate marketing’s business acumen and strategic contribution:
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 14Tweet at #MPM13
The C-suite can’t relate marketing activity-based metrics to business outcomes
These are the things that marketers count:
Number of new leadsNumber of sales accepted leads
Whitepaper downloadsMedia mentionsTwitter followers
Click through ratesSite registrationsDemo downloads
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 15Tweet at #MPM13
The C-suite can’t relate operational metrics that gauge marketing efficiency to impact and value
These are the things that show what you spend on the activities you count:
Campaign ROI | Cost per leadCustomer Acquisition Cost
Marketing influenced pipelineMarketing influenced revenue
Leads per rep | Lead conversion rateProgram spend:headcount ratio
Cost per order dollarMarketing spend:revenue ratio
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 16Tweet at #MPM13
Marketers need to tap the power of data and analytics to advance the BUSINESS
What Marketing is currently doing: Measure and report marketing’s
performance
Allocate the total marketing budget
Justify the marketing budget
Target specific campaigns and offers to the segments most likely to respond
What Marketing isn’t doing, but had better start:
Identify new or emerging customer segments or markets
Drive innovation by developing new offerings/solutions
Predict customer buying behavior
Analyze purchase patterns to prioritize offers made/timing of offers (propensity to buy models)
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 17Tweet at #MPM13
A few exceptional marketers have earned that seat at the proverbial table
90–100: Marketing was able to measure and
report the contribution of its programs to the business
80–89:
Marketing programs made a difference but the contribution to the business goals were not measured
and reported
70–79:
Marketing appears to have made some impact on the business, but it is not clear if the impact was material,
nor is it measured
69 or lower:
Marketing programs didn’t make a difference—there is no clarity as to
how marketing is contributing to the business
For 2012, using a 100 point scale, please select what grade the CEO (or you, if you are the CEO) would give your marketing organization for its ability to demonstrate its value and contribution to the business.% of Respondents (N=424)
Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013
27%
38%
29%
6%
A B C D
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 18Tweet at #MPM13
The "A's"
Middle of the Pack
Laggards
4
5
11
33
38
50
63
58
39
Worse (decreased by5–20% or more)
About the same (decreased orincreased 5% or less)
Better (increasedby 5–20% or more)
These “A” marketers are actually moving two of the most important business outcome needles
*Indicates a statistically significant difference.Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013
In your last fiscal year compared to two years ago, how did your organization perform in the following areas: % of Respondents
The "A's"
Middle of the Pack
Laggards
10
9
10
20
41
52
70
50
38
Market Share*
Customer Satisfaction/Loyalty*
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 19Tweet at #MPM13
What the “A” Marketers do
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 20Tweet at #MPM13
What the “A” marketers do that the others don’t
Speak the language of the business
Understand how the business leaders evaluate marketing effectiveness
Connect marketing activities to business results
Produce actionable marketing dashboards
Present marketing’s dashboard to the executive team
Use data and analytics to report past history and as a predictive tool
Employ analytics talent
Invest in analytical tools
Build analytical models
Alignment AnalyticsAccountability
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 21Tweet at #MPM13
But even the “A” marketers emphasize pipeline metrics over the business outcomes the C-suite cares most about
Note: Multiple responses allowed. *Indicates a statistically significant difference.Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013
Which performance metric categories are included on marketing’s dashboard? % of Respondents
Sales pipeline (leads, conversion rates, win rates)*Marketing spend
ROI (e.g., campaign ROI, event ROI, lead ROI)Brand awareness/equity
Customer satisfaction/loyaltyMarketing contribution to share of wallet
Marketing contribution to customer retentionMarketing contribution to market share
Marketing contribution to category ownership*
8174
583332
262323
26
The “A’s” (N=57)
Sales pipeline (leads, conversion rates, win rates)*Marketing spend
ROI (e.g., campaign ROI, event ROI, lead ROI)Brand awareness/equity
Customer satisfaction/loyaltyMarketing contribution to share of wallet
Marketing contribution to customer retentionMarketing contribution to market share
Marketing contribution to category ownership*
8357
4348
3222
141719
Middle ofthe Pack(N=63)
Sales pipeline (leads, conversion rates, win rates)*Marketing spend
ROI (e.g., campaign ROI, event ROI, lead ROI)Brand awareness/equity
Customer satisfaction/loyaltyMarketing contribution to share of wallet
Marketing contribution to customer retentionMarketing contribution to market share
Marketing contribution to category ownership*
6353
6351
3723
2816
7
Laggards(N=43)
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 22Tweet at #MPM13
Despite the room for improvement, the “A” marketers are further along in their journey
How well does your marketing dashboard enable you to do the following?
Mean Rating
The “A’s”Middle of the Pack Laggards
N~58 N~65 N~44
Monitor and measure performance against business outcomes and marketing objectives
7.2ab 6.0a 5.2b
Track performance of core marketing strategies and processes
7.3ab 6.1a 5.4b
Analyze performance of campaigns or other marketing activities
7.6ab 6.3a 6.0b
Note: Mean rating based on a 10-point scale where 1=Not at all well and 10=Extremely well.ab indicate a statistically significant difference.Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 23Tweet at #MPM13
The “A’s”(N=100 )
Middle of the Pack(N=151)
Laggards(N=143)
7.9ab
6.9ac
5.9bc
What is the starting point? The “A” marketers know better what their stakeholders care about
How confident are you that you know which metrics/business outcomes your key stakeholders (e.g., CEO/CFO/BU leaders) care about? Mean Rating
abc indicate a statistically significant difference.Source: ITSMA/VEM/Forrester Marketing Performance Management Survey, May 2013
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 24Tweet at #MPM13
Get clarity around the business outcomes:There are three questions that every marketer needs to ask the business leaders
Source: VisionEdge Marketing, 2013
1 What specific, measurable business outcome will this program impact?
2How do you expect this program/activity to contribute (what needle needs to move and how far)?
3How will we know and measure that this program achieved the objective(s)?
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 25Tweet at #MPM13
Select the right metrics
Output-Based
Operational
Outcome- Based
Leading-Indicators
Predictive
Counting Media Mentions Trade Show Leads Click Through Rates Site Registrations Demo Downloads Number of New
Contacts/Leads
Efficiency Lead/Rep Lead Aging Campaign ROI Program:People Ratio Cost/Billing Dollar Program
Spend/Headcount Program/Total Spend Awareness:Demand
Ratio Marketing Spend:
Revenue
Business Outcomes Market Share Category Ownership Lifetime Value Adoption Rates Pipeline Contribution
Likelihood of Outcomes Share of Wallet Rate of Growth:
Market Share of Preference
Outputs Outcomes
Expected Outcomes Campaign Lift
Modeling Predisposition to
Purchase Likelihood to Defect Marketing Mix
Optimization
Source: VisionEdge Marketing, 2013
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 26Tweet at #MPM13
Set quantifiable performance targets
Increase revenue
Get more customers
Build stronger relationships at senior executive levels at existing accounts
Increase brand equity
Increase thought leadership downloads
Increase revenue for product A by 20% in EMEA strategic accounts
Add 12 new customers from key
target list
Get 3 meetings with executives at
ABC Company
Increase share of preference by 5%
Book 5 initial sales meetings with prospects
who responded to the thought leadership call to action
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 27Tweet at #MPM13
Establish a clean data chain between marketing activities, marketing objectives, and business outcomes
Business Outcomes
Secure net new orders from the EMEA segment; 14% market share and
company category ownership of 25%
Marketing Objectives
Improve new platform trial rate
among Tier 1 EMEA accounts by 35%
resulting in 5 RFQs
Marketing Programs
Recruit and train 50 customer ambassadors who tout new platform to at least 13 potential
targets
Marketing Tactics
Initiate online activities that touch 5,000 EMEA
customers and produce over 50
potential customer ambassadors for new
platform
Source: VisionEdge Marketing, 2013
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 28Tweet at #MPM13
Use your data chains as the foundation for your dashboard
Report results on three levels:
Executive
Operational
Functional
Source: VisionEdge Marketing, 2013
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 29Tweet at #MPM13
In which direction is your marketing organization moving?
Marketers earning a seat at the “table”
Marketers supportingsales
Remember: Marketing performance metrics and reporting should enable better alignment between marketing
and the BUSINESS (not just marketing and sales)
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 30Tweet at #MPM13
To be more relevant to the business, marketers need to measure and communicate the right metrics
Get clarity around the business outcomes: What needles does marketing have to move?
Select the right metrics: Outcome-based, leading indicators, and predictive
Set quantifiable performance targets
Establish a clean data chain between marketing activities, marketing objectives, and business outcomes
Use your data chains as the foundation for your marketing dashboard
Measuring and Communicating Marketing Performance | OLB130604 | © 2013 ITSMA/VEM/Forrester. All Rights Reserved. | 31Tweet at #MPM13
Thank You!Julie SchwartzSenior Vice PresidentResearch and Thought [email protected]+1-781-862-8500, Ext. 112
Laura PattersonPresidentVisionEdge [email protected]+1-512-681-8800, Ext. 12
Laura Ramos Vice PresidentPrincipal Analyst Serving [email protected]+1 650-581-3812