The start of business planning season is upon us. It’s tempting to just pull out last year’s plans and make some tweaks, but if you don’t factor in the past year’s marketing performance, you may miss some big opportunities in the coming year.
Recently Allocadia co-founder and Chief Product Officer Katherine Berry and I hosted “Looking Forward & Back in Marketing Performance” — a webinar about best practices and tools for measuring past marketing performance and preparing for 2016 planning and budgeting. Read my recap below and check out the #mktgperformance conversation on Twitter.
Marketing Performance Defined
Katherine shared a simple, clear definition of marketing performance from one of our customers:
“Are we spending to plan? And what are we getting out of that spend?”
Notice spending is included as part of performance. Investments and returns go hand-in-hand, as seen in “The Path to Performance” framework we’ve developed:
— Allocadia (@allocadia) September 10, 2015
Why Many Marketers Don’t Measure Performance
Measuring marketing performance has long been a challenge — and one many marketers simply avoided taking on all together. Some of the biggest challenges include:
- It’s complex. Not only are there many marketing spend and performance data points to consider, but those data points are constantly evolving.
- It takes too much time. It’s hard enough to process and aggregate data — especially when it’s in silos — but it becomes even more difficult if you have to manually gather both past and present data.
- It’s easier to stick with the status quo. Marketers get comfortable with what they’re doing, and find it simpler to stick with the same spreadsheets from year to year.
- Many marketers lack analytics expertise. It’s hard to find marketers who have an analytics skillset. Katherine shared a VentureBeat report that noted 45 percent of marketers don’t formally review their data.
Understand Your Data
If you’ve never measured marketing performance before, the best place to start is by developing an understanding of your past and present data. Start with a view of what you’ve spent from your finance systems, and work your way up the funnel through your CRM, marketing automation, social and Web analytics. Gather present data by automating your marketing technology systems. Be aware of your different audiences and what each will want to know. For example, a CMO will care more about impact from a business perspective, while field or corporate marketing teams will care more about campaign specific metrics. Once you’ve gathered all your past data and set up processes to capture present data, you can look at your past actuals next to your plan for the future to generate a forecast. There are four elements of performance measurement:
- Goals. What your company is trying to achieve.
- Targets. Steps to align to those goals.
- KPIs. Standards to measure whether you’re meeting those goals.
- Motivation. The incentives you put in place to drive team members to meet those goals.
5 Recommendations for Setting Meaningful Performance Targets
We have five recommendations for setting performance targets to promote not only better alignment within teams, but greater accountability for each marketer on that team, that is, how they are contributing to the overall target.
- Start by understanding your company’s overall business goals and make sure marketing targets are aligned.
- Make adjustments to your targets based on historical data and present conditions.
- Compare your targets to historical, industry and/or industry benchmarks.
- Communicate your targets to your internal team to create alignment on a granular level and inspire team members to define individual performance goals.
- Have strategic plans that empower marketers to hit your targets — and make ongoing adjustments as needed.
Are you ready to get started with next year’s planning and budgeting? Remember these three key takeaways:
- Understand your business objectives.
- Communicate your targets to your team so they have visibility into their progress.
- Aim to create a real-time forward-looking view of performance.
Watch the webinar recording to see a real-world planning scenario that includes reviewing past performance and setting meaningful targets based on the information gathered.