InsightIQ Blog

Measurement from the Customer's Point of View - Part I

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Aug 17 2009

When sales are down, people ask questions. The answers are generally a litany of conjecture about what's behind the fatigue in the list, leads, close rates or market conditions. Despite the flying conspiracy theories, no one in the organization knows exactly what's causing the decline, and fingers are pointing.

Without a fully comprehensive diagnosis, marketing executives are brought to the table and asked, "If I gave you another million dollars to spend, what could you do with it?" This usually results in a one-time econometric modeling exercise forecasting the potential return on that incremental spend in a vacuum. And depending on the volume of the sales deficit, the immediate prescription is likely to be your garden variety mass market promotional advertising blitz.

In my 17 years in marketing, I have witnessed this quick fix, dead-end pattern dozens of times. And unfortunately, fixing the immediate problem almost always eclipses any focus on a long-term, sustainable marketing growth model. The emergency spending bridges the sales gap, so people stop asking questions about what happened. And marketing organizations create their own self-fulfilling shortfall year after year.

The truth is, without transparency into every step in the purchase cycle, it is impossible to effectively link marketing activity to financial impact. There are so many variables, some human, that are flawed in the process of communicating with customers that marketers are often left crediting sales through a crude, match-back process that does not feed source intelligence back into the campaign planning cycle. Lack of knowledge about the data and binge spending results in borrowed leads that may never be replenished.

Deploying a customer-centric measurement system

To link marketing activity to business results, you have to look at all of the critical components driving marketing performance-data, tools, people and processes. To effectively analyze marketing investments, data needs to be complete and accurate, and tools must be flexible and able to answer actionable questions. People in marketing must have the right skill sets to perform their function, and sales resources must cooperate in capturing information along the communication continuum. And all of the processes - from test design to accurate source capture and campaign attribution - must be locked down to create a learning loop that results in increased customer intelligence, improved response rates and, ultimately, uncovered opportunities for cross-selling.

Typically, organizations have a strong competency in evaluating individual campaigns, but many lack the measurement tools to assess marketing from a customer perspective - including tracking how many times you are touching the customer and with what message.

In my next post, we'll look at the framework in action.  I'll share the case study of a financial services client that was able to increase its annual return on marketing investment (ROMI) by 18% by deploying a customer-centric measurement system.

 

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