Pressure continues to mount on marketing professionals as they are asked to increase revenue streams as marketing budgets remain the same (or decrease). Therefore, metrics and measurement are becoming an even more critical factor in driving marketing success for organizations.
Marketing professionals need to track and analyze the effectiveness of their marketing programs. Best practices align marketing activities, strategies, and metrics with business objectives. Creating a framework to track and measure marketing performance is critical in today’s marketplace.
Marketing metrics focus on measuring, managing, and analyzing performance to maximize effectiveness and optimize marketing ROI. Three elements play a critical role in managing marketing performance: data, analytics, and metrics.
To measure the success of your marketing programs, it is important that you collect the necessary data. Gathering the right types of data is critical in developing an effective metrics and measurement platform. After determining what data is needed, marketers need to search for this data, and determine the decisions that will potentially result from this data mining. By thoroughly analyzing the data, organizations can identify insights to improve marketing results.
Analytics optimize marketing spend by building models and test/control strategies that measure the impact of marketing activities. These approaches help determine the right spend on who to target, when to communicate, and with what channel. With the dramatic increase in multi-touch, multi-channel campaigns to understand the best communication mix, the interest in sophisticated modeling and analytics has increased significantly.
As marketing programs are designed, the method to measure them needs to be designed. Metrics enable marketing professionals to justify budgets based on returns and to drive revenue streams. Marketers use these metrics as ways to prove value and demonstrate the contribution of marketing to the organization.
Marketers then need to design metrics and business objectives known as key performance indicators (KPIs). To create metrics and KPIs, marketers must first establish the outcome they are trying to achieve. Metrics to consider may include cost per lead, cost per sale, conversion rates, and most importantly, sales revenue, to name just a few. What every organization must determine, is what critical information is needed at their fingertips to help drive their business. The metrics should demonstrate the progress of marketing and determine what is working and what isn’t. In addition, metrics support the decision-making process and helps to align marketing with the business.
Today’s marketing executives need an in-depth understanding in marketing measurement. They must have visibility into customer information that enables them to provide strategic guidance to their respective organizations. Those responsible for marketing accountability need to be heavily involved with defining marketing objectives, determining marketing investments, and proving the value of marketing in their organizations. Marketing professionals are responsible for the creation of new metrics to measure and improve marketing performance. They are expected to evaluate and implement systems to improve marketing efficiency and effectiveness.