Technology has created a new age of accountability. To marketers, this means measuring the effectiveness of brand investments in everything from portfolio alignment to advertising to CRM, culture, and a plethora of other dimensions, so each investment can be tracked to ROI. What’s more, we are now seeking ways to more quickly and decisively determine how all these factors interact to contribute to ROI. With this information the mixture can be fine-tuned to optimize ROI.
No big, right?
Recently I’ve had conversations with brand marketing and sales executives, agency heads, and data managers, who agree that meaningful ROI measurement is often elusive for a few key reasons:
Lack of consistent sponsorship
Even though brand marketers “talk the talk” on measurement, many times they really don’t want to know the hard facts because they may be held accountable for “bad” results. But even bad information is good. It’s kind of like getting an annual medical physical; you stress out and really don’t want to do it because you don’t want to know if there is something wrong. On the other hand, if there is something wrong, the earlier you have information about it, the more likely you are to get successful treatment. If you’re doing things right, you want to know so you can do more of it.
Selecting the right metrics
The siege of data in our new information society forces us to choose our data wisely. Too much data is just as dangerous as not enough. If you aren’t relentlessly selective, you can get bogged down and distracted into “analysis paralysis.” Like any other best business practice and for best business results, your metrics program should be aligned from business objectives all the way through tactical execution. The task/objectives method comes in really handy in selecting metrics.
1. First make sure you very specifically define what the metrics are needed for – in other words, what are the business objectives you want to support (usually provided by your executive team…revenues, margins, biz dev, etc.)?
2. Which brand touch point metrics will be used to measure progress toward the business objectives above? (There are 18 of them. Contact me for details.). Research can help you determine which of them are clamoring for attention.
3. Establish marketing objectives that connect with the selected brand touch point metrics above (internal alignment, market share, market/segment growth, arresting declines, etc.)
4. Develop and execute a tactical program (tasks) that serve the specific marketing objectives above (internal/external). Measure tactical success (usually response of some kind).
This approach usually requires building a bridge of a few metrics, at least one from each layer listed above. One metric will inform another, and so on, until you can derive the information that achieves your original business objective. This is one bridge between strategy and execution. You may have to get creative in how you collect data (see point below) and interpolate data among metrics to get what you need, but in every case you can build a bridge of data continuity to support all your investments. But remember, try to limit your appetite to only the handful of key metrics or key performance indicators (KPIs) needed to serve your objectives.
Figuring out how to measure
Marketers may often resist measurement because they can’t figure out what the yardstick looks like. In some cases you may need three, one-foot rulers to make the full yard. Analogies aside, it may require the “cascading metrics” strategy described in this blog to get the info you need to support brand investment decisions. For example, do your customers believe they are buying the same things as your people think they are making or selling (are they buying the widget, the result of using the widget, or the experience of buying the widget)? This is called brand delivery alignment. How do you measure the ROI on an investment in activities to align brand delivery among stakeholders? There are potentially dozens of these slippery, squishy things you’d like to measure if you could figure out how. It’s all possible, and it’s surprisingly practical. I have attached a link to two cascading metrics: one to illustrate how to associate brand delivery alignment with increased margin, and another illustrating how improving brand understanding can be associated with increased revenues.
How does your organization measure brand marketing ROI? Post it here.