This month’s blog post talks about the importance of making sure your marketing measurement process gives you the data you need to compete for money at the budget table.
I don’t know about you but I seem to be in front of my computer screen more often than I’d like. Unlike my three nephews, who would do almost anything to get more screen time, I’m usually looking for ways to get less.
One way I reduce my screen time is to invite a colleague out for a coffee, or lunch. I think there’s no substitute for a face to face discussion, and I’m also happy to disconnect electronically for a while, even if the freedom is fleeting.
Over Thanksgiving weekend, when my need to disconnect aligned nicely with a spectacular autumn afternoon, I chose another strategy. I put on my hiking boots, grabbed my camera and drove off in search of fresh air, nature and autumn colours.
I decided to walk in the conservation area around Crawford Lake, a rare meromictic lake atop the Niagara Escarpment. Some of the hiking trails intersect with the Bruce Trail and while I didn’t take many photos, I enjoyed the hiking and the fresh air.
As I hiked along, taking in the fresh air and fall aromas, aside from wondering what the hell a meromictic lake is, I thought about how the fall can mean different things to different people. For kids and parents, fall can be about back to school time. For sports junkies, fall is the time when all the major sports are in full swing. For many in business, fall is the time for strategic planning and budgeting for the coming year.
Marketers have an important seat at the budget table, as the company looks to marketing (and sales) for revenue projections. In addition, marketing must also battle for its share of the expense budget in order to run the right programs to help meet those revenue projections. Everyone at the budget table understands this and will ask marketing “If we give you the money you say you need, what are you going to do with it and what will the company get in return for that expense?”
This is where the discussions get interesting. The planning and budgeting process is a negotiation over limited funds. The battles can be won with data, or lost due to a lack thereof. Consider the battle between operations and marketing.
The head of operations might ask for a million dollars to improve operational efficiencies and supports this request with data that shows by what percentage this will reduce operating costs and how quickly the resulting profit increase will recover the million. Everyone at the table can easily grasp the concept, do the math and approve that expense.
When marketing gets its turn in the hot seat, fighting for its million, it needs to be able to talk about more than new customer insights or breakthrough marketing programs. These things help, but marketing needs data.
Marketing measurement is at least part of the answer. If you don’t already have a marketing measurement process in place, it may be too late to arm yourself with data for this year’s budget meetings. However, it’s a great time to add creating a measurement process to your strategic plan so you can start collecting data. These are some of the elements you’ll need to consider.
- Don’t bite off more than you can chew. While it would be great if you could accurately quantity Return On Investment for each marketing program, that very complex and costly undertaking is best left for the most sophisticated marketing driven organizations, with big budgets and tons of data. Focus instead on creating a measurement process that identifies the most effective ways to market to your customers.
- Set clear and measurable objectives. In the planning process, hold each marketing program up to a simple test. Ask “How will we know we have succeeded, and what business outcomes would make us happy?” If you don’t have good answers to those questions, maybe those programs don’t belong in your strategic plan.
- Create a measurement process you can execute consistently. I create a standard scorecard to measure every type of marketing program. A standardized scoring method gives you a way to rate and rank all your marketing programs according to how well they each met their objectives.
- Involve the right people, get them on side. For your process to really work, it needs to be embraced organizationally, especially by those who sit around the budget table. If they had a hand in designing your measurement process, selecting metrics or providing data, then it’s more likely that they’ll believe your data when you’re asking for money.
- The most important thing is to start. Marketing measurement is a journey, but if you don’t get started, you won’t get very far. You’ll make mistakes along the way, but you will also learn things that help you to make better strategic decisions.
The deep waters of measurement can be murky, much like those of some meromictic lakes, but with a little effort you can get some clarity. In a world where everyone’s got data to support their position, marketing needs to go to the table with marketing effectiveness data, otherwise it can be like going into battle unarmed.