We all use measurement as the way we tell how well our efforts are achieving our goals. The most important element of this statement is "achieving our goals". So, before we talk specifically about types of measurements, let's talk about marketing's goals.
Marketing isn't an island. Marketing sits between the product team and the sales team. Marketing is the ultimate middle man. And because marketing is a middle man, organizations can get confused with how to measure marketing.
Making the Business' Goals Marketing's
Before we can establish measurements, we need to understand the business' goals and how they relate to marketing. Most business' goals are defined by sales, margin, and profits. Sure, there may be other goals such as good will, giving back to the community, green investments, etc. However, for-profit businesses will rely on sales and profits to help further their other goals.
This means that marketing's goals must be related to sales, margin, and profits. This is true for both product marketing and marketing communications. If you want marketing to contribute to the business' goals, marketing must also be measured by these goals.
Now, marketing doesn't like being tied to sales and profits. And why would they? Marketing doesn't have direct control over sales. Sales can (and often does) take what marketing gives them and use it as they like. Sales does this with messaging, leads and pricing. So, why would marketing ever sign up for sales and profit goals?
As CEO, you need marketing and sales to work together to achieve the highest sales and profits. You can't afford marketing and sales to work at cross purposes. When that happens, the business loses.
The way you drive cooperative behaviors is to have both organizations share in the same goals, yet have different responsibilities in achieving those goals.
Driving Cooperative Behavior
You decide to have marketing and sales focus on the same goals and distinguish their activities with different responsibilities. So, how do you create measurements that will drive these goals? You do it by pulling out key marketing activities and relating them directly to the goals. Let's look at some ways you might relate marketing activities to business goals.
- Product marketing product definition - Tie features to closed deals
- Product marketing competitive analysis - Tie the analysis to competitive wins and losses
- Product marketing messaging - Tie the messaging to third party validation
- Product marketing buying processes - Tie buying process implementation to sales cycle measurements
- Product marketing buyer personas - Tie created buyer personas to matches to sales cycles
- Product marketing collateral creation - Tie content to usage in closed deals
- Marcom lead generation - Tie lead generation to closed deals
- Marcom lead nurturing - Tie lead nurturing to closed deals
You can see in these suggested measurements how essential good marketing is to business success. If marketing is "on the hook" for the results that truly drive sales, they must engage in cooperative behavior. Cooperative behavior with the product team through which they convince the product team to invest in the features that will enable the business to win competitively. Cooperative behavior with the sales team through which they show how their activities facilitate the sale.
What does this look like?
Let's take a common example. Marketing is often measured on the number of leads that they generate. However, every sales person knows that quantity doesn't mean quality. As sales digs through the reams of leads dumped on them, they quickly realize that many leads are quite simply trash.
It doesn't take long for sales to turn on marketing who retreats to the world of "but I am delivering according to my measurements". Now you have marketing and sales at each other's throats. And you aren't getting those qualified leads that drive real purchases.
You don't want sales to get bogged down with lots of bad leads. That doesn't help them in selling. So, you need marketing to stop passing bad leads on to sales. Well, if marketing has to deal with the lead quality issue, they are going to work smarter and figure out how to find and nurture to develop more highly qualified leads.
When marketing delivers real deals to sales, you start to see the cooperative, successful behavior you want.
Driving Measurements Down
It is not enough that you create the right marketing measurements (and compensation) for the executives in your marketing team. You need those executives to do the same throughout their organization. The right measurements incent the cooperative behavior that benefits your business.
However, you cannot give marketing this responsibility without creating similar responsibilities in the product team and sales. If you are going to tie marketing measurements to purchases and profits, then marketing needs to be able to ask for and receive the appropriate responses from the product team and from sales.
In other words, you need to protect the marketing team from non-cooperative responses from the product team and sales. It is not acceptable that marketing be responsible for collateral creation and then sales decide not to use that collateral. It is not acceptable that marketing identify a critical feature to win against the competition and the product team decide not to implement it.
There may be valid reasons why sales doesn't use collateral and the product team doesn't implement recommended features. But these decisions aren't individual employee decisions, they are business decisions. These decisions need to be made at the management level. When management makes these decisions, then you need to review and revise marketing's measurements.