To all our readers and followers. Hope you are having a wonderful summer. We have moved the Measure Up Marketing blog directly to the VisionEdge Marketing site; enabling our content to all be located in one place. The blog can now be found at https://www.visionedgemarketing.com/blog/. We appreciate your support and shares, thank you!
Stay tuned, new content will be posted shortly.
All the very best,
We are sitting in a meeting with the CMO and a new marketing operations director from a large, well-established company. They had called and asked for a meeting to help kick their marketing metrics and dashboard up a notch.
In the last year, this marketing organization has added various capabilities, including customer relationship management, marketing automation, and marketing resource management systems. The marketing operations director has a staff, which includes the marketing automation and marketing resource management teams.
Recently, they’ve had some measurement adoption issues, so they decided to appoint a dozen of the marketers from their
200-person global marketing organization with marketing performance and operations responsibilities, with dotted line reporting to the marketing operations director. Some adoption issues are related to experience and training, but some are more subtle and the result of people who aren’t receptive to change. As we listen, I realize that this team didn’t take change management into account at the beginning of their journey.
No Magic Pill for an Instant Change
The size or industry of a company doesn’t matter.Every aspect of marketing performance management often requires cultural, process, and skill changes.
Many times these organizations underestimate the effort required—they want something fast and easy. It reminds me a little of people who want to lose weight, but they don’t want to make any activity changes or diet. They want to take a pill to lose weight, preferably while they sleep, and watch the pounds quickly melt off.
Unfortunately, such a magic pill doesn’t exist. Even the diet pill companies clearly state, “X pill was designed to be used in conjunction with a healthy diet and exercise. Some users may lose weight without changing their diets or exercising, but exercise and healthy eating are recommended for optimal results.” And there you have it, most of us who want to lose weight are going to have change—change our diet and/or change our exercise routine.
Change Is Part of a Company’s Improvement
Change is pervasive in our society and a fact of life in organizations. Change involves making alterations to the organization’s purpose, culture, structure, and processes in response to seen or anticipated changes in the environment. It can also facilitate prosperity and growth, even in volatile, uncertain, complex, and ambiguous environments.
Effective strategic marketing leaders realize that change is part of the continuous improvement process, and CMOs bent on survival embrace change.
Three Elements of Change
Author Dallas Willard tells us that successful change takes three elements: vision, method, and will.
Successful change hinges on a picture of a desirable future.
Vision can provide both a corporate sense of being and a sense of enduring purpose. In 1995, John Kotter, a professor at Harvard Business School and world-renowned change expert, introduced his eight-step change process in his book
Leading Change. Kotter posits that without a sensible vision, change efforts can dissolve into a list of confusing projects that take the organization in the wrong direction. Kotter strongly emphasizes that the vision must be easy to communicate. That is true for marketing teams adopting performance management. The CMO must create the sense of urgency, craft and communicate the vision, remove obstacles, produce short-term wins, anchor the change in the culture, and build on the change.
One of the easiest, least expensive ways to create a quick win is to change the approach to the marketing plan, which is an existing process and output for many organizations.
Once you have a vision, the next thing you need is a method.
Using the losing weight example, let’s imagine that there is an upcoming event in a few months where being slimmer is important, a class reunion for example. You can envision all the benefits dropping 20 pounds offers both in the short term, for this event and, in the long term, for your overall health. The next step is to decide how to lose the weight… Will you hire a trainer and nutritionist? Join a gym? Join a weight loss group?
When you work with a firm that specializes in marketing operations, marketing performance measurement, marketing accountability, and so on, they should have a well-defined method you will use and can then adopt.
The last item is intention or will. This is probably the most critical for any successful change. If you don’t really want change and/or you can’t get your team onboard, the probability of success is slim. An initiative is only successful when individuals change their daily behaviors and workflows. Being able to mobilize the individual change necessary for an initiative to be successful and deliver value to the organization is the essence of change management.
Here are five important steps to support will:
- Be aware of the need for change. If you don’t think you need to lose weight, you won’t.
- Desire the change. Even if you may know that your life or quality of life depends on making a change (stop smoking for example), you have to want to change. Performance management takes hard work, so the payoff and value needs to be very clear.
- Know how to make the change. The team members need to know how the change is going to take place and their roles in the change. They need to understand the timing and rhythm.
- Develop the skills needed to implement the change. Most likely, team members will need skill development, and hands on training is key to adult learning. Include this investment in your performance management budget.
- Reinforce the change. For the change to be sustained, constant vigilance and reinforcement is vital.
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In a world where the rate of change is speeding up, the best defense is a good offense. So, master change management by planning for these three key elements: vision, method, and will.
In 2000, the Advertising Research Foundation probably didn’t realize that their report about marketing’s ability, or lack thereof, to measure its value and contribution would initiate numerous studies, conferences, and products on the topic. This year’s joint VEM/ITSMA Marketing Performance Management Survey* , which looks at how marketers and C level executives would rate marketing’s value, revealed that 85 percent of the nearly 400 study participants are seeing increased pressure for marketers to measure marketing’s value and contribution.
A key component of the annual study looks at the comparison of the number of marketers earning an ‘A’ grade from the C-Suite for their ability to impact the business and measure their value with their counterparts who are falling short. The grades remained relatively consistent with prior years, with only a quarter of the marketers earning an ‘A’ for their ability to measure and report the contribution of marketing’s programs to the business.
By now one would think this journey would be nearing completion, but there appears to still be plenty to learn. Over the years, the study has revealed that ‘A’ marketers exhibit a number of differences from their colleagues–they are better at alignment, accountability, analytics, automation, assessment, and alliances. The investments in these capabilities and how they approach the work of marketing has enabled them to serve as value creators for their organizations. On the other hand, the marketers in the “middle of the pack” focus more on enabling sales, and the laggards operate primarily as campaign or program producers. In this day and age, with all the technology that marketers have at their fingertips, it begs the question “Why can’t ‘B’ and ‘C’ marketers get close to C-level executives and show their value?”
Become a Value Generator
Marketing organizations that create value are proactive. The ‘A’ marketers hold themselves accountable for contributing to business outcomes even if senior leadership doesn’t. They believe it is their responsibility to identify, investigate, evaluate, recommend, and prioritize market and customer opportunities. These marketers implement continuous change to maximize the organization’s success, and enable it to stay abreast or ahead of market, customer, and competitor moves. ‘B’ and ‘C’ marketers don’t seem to do that, don’t ask the right questions, or don’t know how to show their value.
Make Marketing Performance Management a Priority
According to the data, organizations that are performing well when it comes to customer value and business growth, are those where the marketers excel at performance management. ‘A’ marketers prioritize performance management, establish a clear roadmap for performance improvement, and focus on aligning marketing to the business not just sales. They have regular two-way dialogue with senior leadership and are motivated to select and report on the metrics that matter most.
Here are three qualities of this elite group that any marketing organization can emulate:
- Be a business person first, a marketer second
- Provide customer and market insight to inform business strategy, in addition to enabling sales
- Tap experts to hone skills and improve capabilities
Join the conversation with VisionEdge Marketing and ITSMA in our webinar, The Link Between Performance Management and Value Creation, Tuesday, June 17th, from 10:00-11:00am CST.
*VEM has been conducting the survey for 13 years. ITSMA has co-sponsored the survey for the past three years.
Here’s something we know after conducting the marketing performance measurement and management study since 2001: Best-in-Class marketers are relentless when it comes to continuous improvement. How do they know how they stack up? They regularly audit and benchmark. We know this can be expensive—even a small benchmarking study for marketing typically takes at least $20,000. With marketing budgets still feeling the crunch, it makes sense to be a bit more creative when it comes to benchmarking. And that’s where our annual marketing performance study comes in!
There are plenty of studies out there, and only you can decide which ones are worth your time. As a marketer you could probably complete a study every day, but if you are feeling the pressure to prove the value of your marketing, then this survey is for you. With 13 years under its belt and participation from marketing professionals and executives from around the world, in every industry and of all size organizations, we are able to provide a solid view into what Best-in-Class marketers do better and differently when it comes to measuring marketing’s contribution and value.
Given how hard you’re working every day, it’s frustrating when budgets are slashed and programs are terminated. You know Marketing is highly valuable to the business, but can you prove it? If you can, you may be among the ranks of the Best-in-Class—those marketers who have made marketing relevant to the C-Suite! If you can’t, it’s probably time to make some changes.
Find out how your organization stacks up against the Best-in-Class. Give 15 minutes of your time to participate in the 13th Annual MPM Survey and save the benchmarking dollars.
What does the survey benchmark? The focus of the survey is Marketing Alignment, Accountability, Analytics, Operations, and Performance Management capabilities. Complete the survey, share the link with your marketing colleagues and leadership team, and use the survey and the upcoming results to spark internal dialogue on the state of your marketing!
You can access the survey by following this link: https://www.surveymonkey.com/s/2014MPM_VEM
Customer Experience (CX) is one of the most highly discussed topics in organizations today. By definition, CX encompasses all interactions across the entire life cycle of the customer relationship. According to a recent survey by Oracle, of 1,300 senior executives in 18 countries, 97 percent believe CX is critical to their success. In addition, the study revealed a significant difference in perceptions between what executives think about the experience that they provide customers, versus what customers think about the experience that they receive. Only 49 percent of executives believe customers will switch brands due to a poor customer experience, yet 89 percent of customers say that they have switched because of a poor experience.
In the same study, improving CX was found to be one of the top three priorities for the next two years, according to 93 percent of study participants, and 91 percent want to be a CX leader. However, 37 percent are just now getting started on a formal CX initiative, so when it comes to execution, businesses seem to be stuck in idle. To be effective, a CX strategy must be aligned across the organization and encompass all customer touch points. The survey results found that conflicting key performance indicators and lack of alignment are among the biggest hurdles to achieving CX success. Alignment is especially critical to developing a CX strategy that results in positive, consistent, and brand-relevant experiences for your customers. Your business must align organizational goals between departments and lines of business to facilitate the best customer experience possible.
The first step in moving your CX initiative forward is to fully understand the actual customer experience. The saying, “walk-a-mile in their shoes” could not be more apropos. One of the best ways to begin to capture the customer experience is with a journey mapping exercise. This process helps you understand what it is like for your customer to interact with your business. The good, the bad, and the ugly of your customers’ experience becomes apparent through this exercise. Once you have the map, you can begin to prioritize your next steps.
Experience Impacts Loyalty
How a customer engages with your organization in order to do business with you is known as your service model. It consists of various touch points that set the tone for overall customer satisfaction, trust and loyalty. These touch points include interactions with marketing, sales, service, operations, product, finance, and so on–from transactions via phone, meetings with account teams, receipt and payment of invoices, to using the website and social media channels. Satisfaction at each of these touch points should be measured and managed because each one influences loyalty–positive sentiment, purchases, references, etc. If the service model meets your customers’ needs and expectations, they will be loyal and become brand advocates, possibly bringing in new business for you.
Capture Critical Touch Points
In-depth interviews and focus groups are two of the best ways to begin collecting customer touch point and experience information. These types of conversations make it possible to identify and understand all the stages your customers experience across the life cycle, and from these conversations you can learn about the specific contact points customers have when they do business with you. The objective of this step is to define the broad stages (such as purchase, delivery, deployment, service) and their associated contact points (trouble tickets, invoices, contracts, etc.). It shouldn’t be surprising if you end up with a complex map that includes a large number of stages with a multitude of contacts.
Once you have the touch points mapped, the next step is to understand the following attributes for each touch point: frequency, value in the experience, impact on loyalty, and level of satisfaction. Transactional and intercept surveys can help with capturing this information. This level of information will help you associate touch points with loyalty and business impact, enabling the development of a CX strategy that will create a predictable, consistent and positive experience and prioritize to your action plan.
Companies who want to retain or expand their relationships with existing customers are finding that measuring and modeling customer loyalty is very valuable. We were recently asked “Do you need to measure loyalty if you are measuring retention-aren’t they the same thing?” Our answer, no, they are not the same thing, and you may need both.
Retention is a measure of whether an existing customer continues to do business with you. That is not to be confused with loyalty, which measures a customer’s predisposition to select a business entity as a preference, and indicates a certain resistance to competitors. Loyalty is a behavioral disposition that suggests that a customer will consistently respond favorably toward a brand/company, and also suggests the willingness to engage. As you can see, there is a distinction and it’s important to understand that a customer who continues to do business with you may be retained, but not necessarily loyal.
Responding favorably covers a lot of territory-from passively choosing to remain a customer, to actively choosing to advocate for a brand/company. Therefore, while measuring retention, once you define what a customer is in terms of tenure, it is a matter of counting. Loyalty takes a bit more sophisticated measurement and needs to take into account three potential behavioral responses if you are going to use the concept to build a model:
- Expansion–the likelihood the customer will increase their level of business, such as by purchasing more of the same product or other products in your portfolio
- Influence–the degree to which they can be influenced by the company in a way that positively impacts the company, such as seeking out advice, paying online, complying with new policies
- Advocacy–the extent to which a customer is willing to actively promote the company, such as online reviews, supporting the company’s position on an issue, participation in case studies, serving as a reference, or making referrals.
Note: The Net Promoter Score (NPS) methodology attempts to account for these 3 behaviors, but the primary goal of this score is to help you ascertain the number of promoters vs. detractors.
You will want to determine which of these behaviors (it can be all of them) best define loyalty for your company. If you don’t know, the answers to these five questions will help you get started:
- What is the ideal customer for your company? What do they do/not do? What does a less-than-ideal customer look like?
- What does your company want from its relationship with customers and why?
- What can customers do to support the company’s mission?
- What can customers do to help the company improve service and reduce the cost to serve?
- What can customers do to reduce the cost of doing business with them?
You may want to engage a number of stakeholders in conversations around these questions. Once you determine the behaviors that define loyalty, you can build a model and begin to measure loyalty. It may be necessary to take different customer segments into account, and as a result you may need more than one model. To validate the model, you may need to conduct some research with customers who meet the loyalty criteria as well as customers you believe do not. Then, set about defining how you will use the model to measure and improve loyalty.
Customer loyalty is an intangible but extremely valuable company asset. By distinguishing retention from loyalty you can begin to understand the customer experiences, interactions, perceptions and attitudes that drive and impact loyalty.
Many companies tell us that they are creating a marketing dashboard to improve visibility and alignment. As a key element of performance management, a marketing dashboard also serves as an important vehicle for assessing marketing’s contribution. Almost every week, we’re working with a company who is trying to select the right performance metrics and develop an actionable marketing dashboard. In addition to internal factors, good data is a vital ingredient to successful dashboard. Data is needed to employ metrics and establish key performance indicators. Without the data, it would be difficult to measure marketing’s value, determine how well marketing is moving the needle, and/or how well marketing is aligned with the rest of the organization and the overall strategy.
However, even with the data, it’s possible for the metrics to distort reality. For those of you investing in business intelligence tools and various marketing and sales software systems, remember to put the necessary checks and balances in place to evaluate the usage and quality of the data. You will need a way to quickly address data inaccuracies so that the metrics don’t steer execution in the wrong direction. It will also be important to have a process for evaluating aspects of the organization that are hard to measure.
One thing to keep in mind throughout your journey is that metrics can help create alignment as well as improve and prove the value of marketing. One of the most overlooked aspects of the performance management process is the dialogue it creates and the opportunity for organizations to discuss the meaning and implications of the metrics. The journey to create a Marketing Dashboard can be a difficult one, but once you have an excellent dashboard at your fingertips, you’ll see its value and will agree that it is well worth the investment.