Measure Your Marketing Success By Christopher Ryan Get a group of B2B marketing professionals together and ask: What are your most important criteria for benchmarking performance? You will get some blank stares and some muddled answers. However, the fact is that good marketing is both an art and a science, and unless you can explain how you measure and report on your work output, you will not be recognized as a good marketer, let alone be viewed as an indispensable employee in a tough economic climate. Start by asking these six questions: 1. Do you have a welldefined value proposition that you communicate in all your marketing messages and promotions? Can your entire team express this message in a concise and compelling elevator pitch? 2. Has the marketplace accepted your brand/image? Do your prospects and customers see you in a way that is congruent with the way you see yourself? 3. Do you have a Service Level Agreement (SLA) with your sales department that specifies the quantity and quality of leads you will be delivering? 4. How many of the leads that you deliver to sales are truly qualified—that they meet the agreedto criteria and may actually buy something? 5. Are you targeting the right individuals at the right companies? Have you captured them in a system (CRM or contact database) that allows for ongoingtargeted communications? 6. Does every part of your endtoend marketing and sales model work? Are there gaps that keep you from achieving your goals? Each of these sample benchmark questions addresses a significant part of the value you may provide to your organization. I suggest that you need to determine and publish your own performance indicators. Fortunately, you can measure many aspects of marketing and sales, including: • What it costs to get an inquiry • Percentage of inquiries that turn into leads • Percentage of leads that turn into revenue • Productivity of the sales force across territories/regions • Average sales price per order • What the marketplace thinks about you • Your market awareness vs. your competitors • Lifetime value of the customer Focus on Lifetime Value Too many marketers have a shortsighted view about objectives. They may rightly be concerned with a campaign's efficiency in generating leads or sales, and evaluate the results of each campaign in terms of the total amount of money spent and the shortterm gain achieved. By contrast, the successful marketer knows that marketing is a longterm process. He knows the true value of each new sale is not just the immediate profit received; it is in the lifetime value of the new customer. He also knows it costs only onetenth to onefifth as much to sell a product or service to an
existing customer as it does to acquire a new customer. This is why progressive organizations spend so much effort on the care and feeding of the customer, and on understanding their lifetime value. After calculating lifetime customer value, two things should become apparent. First, because of the longterm profit potential, most organizations should be willing to increase the amount of money they are willing to spend to acquire a new customer. Second, individual customers are more important (and profitable) than most of us realize, and should be treated accordingly. Avoid Paralysis by Analysis I have always found that the best marketers possess a good blend of intuition and analytic ability. While both are valuable, one of these traits without the other can be problematic, and both styles can become weaknesses if not addressed appropriately. The pure intuitive type says, "Full speed ahead—don't worry about the facts—I know how this is going to turn out.” However, few of us are born with a builtin crystal ball. What some people think of as intuition is really the result of trying a lot of stuff, making mistakes, and learning by trial and error. One of the most humbling things you can learn is that your instincts about what is going to work can be faulty. On the other side of the spectrum are those people who practice “marketing by spreadsheet.” They figure that if you just pore over the data long enough, you will learn everything you need to know to market successfully. Their battle cry is, "The data, the data, give me more data." The problem is: data does not buy anything—only real people make purchases. The data can hide many important factors. There is a real danger of substandard marketing research and the many things that can cause it, including a small sample base, missing data, and a nonrepresentative audience. The lesson is that marketing is both an art and a science, so don't rely solely on either intuition or data. You need to have a blend of both, and if you do not, concentrate on your core strength and find someone to collaborate with who can help you overcome your weaknesses. This complementarystyles approach certainly works for marriages, and it can work equally well for marketers. About the Author Christopher Ryan is one of the nation’s foremost B2B marketing and sales experts. Author of How to Create an Unstoppable Marketing and Sales Machine (Fusion Marketing Press, 2009), Mr. Ryan is founder and President of Fusion Marketing Partners www.fusionmarketingpartners.com, and formerly a senior marketing executive for companies like Stellent, FrontRange Solutions, PeopleSoft, Sybase, and Group 1 Software. His latest book can be obtained at Amazon.com or at http://fusionmarketingpartners.com/ Summary Now more than ever in today's very competitive landscape marketers are challenged with doing more with less, and proving their results and value in their organizations. Christopher Ryan, one of the
nation's foremost experts in B2B marketing, discusses how marketing is a blend of art and science and the importance of measuring and documenting performance of marketing efforts. He offers helpful questions you can use right away to evaluate your own organization's marketing performance and the importance of focusing on the lifetime value of your customers.