You’ve probably heard this story before: Today’s marketer are aggressively being asked to prove their impact to the business. No doubt, this can be an imposing task that creates major challenges and changes within their organizations. The benefits of succeeding far outweigh the risk; success leads to marketing gaining a more prominent role and greater influence within the company.
To help companies navigate this challenge, our Director of Customer & Marketing Insights Sam Melnick recently joined Jerry Rackley, chief analyst at Demand Metric and Brian Brownrigg, managing director at QuintoVate, for a webinar: Proving Marketing’s Impact: Advanced Marketing Performance Management.
They discussed several important topics around Marketing Performance Management (MPM):
- Why MPM is required to optimize marketing performance.
- How winning marketing departments are excelling with this competency.
- How to create the needed change and action across your global marketing organization.
Why Is MPM So Important?
Marketers have two major jobs: running marketing and doing marketing. The do side of marketing is everything the customer sees – like the event or campaign execution that happens in the market. The run side of marketing is the behind-the-scenes strategy, planning, investing and measuring to determine the next best marketing action. In essence, the run part of marketing is Marketing Performance Management.
When marketers aren’t connecting the run side with the do side, or they aren’t spending enough time or energy on MPM, issues arise. According to SiriusDecisions, fewer than 20% of B2B organizations are comfortable with their ability to quantify the returns on marketing spend. And a recent CMO Survey found that only 35% of marketing decisions are made using marketing analytics. These statistics only point to the fact that marketers are not putting enough effort into MPM and running the business of marketing.
The best way to highlight this is in the words of one of Allocadia’s customers, “If I don’t Run marketing efficiently, then I can’t Do marketing effectively.” At Allocadia, we truly believe that to succeed, marketers have to focus on MPM – the strategic arm of marketing.
How Do Best-in-Class Organizations Approach MPM?
This section was led by Jerry Rackley, who drew from the report“Proving Marketing’s Impact: Advanced Marketing Performance Management.” He shared data about how well marketers demonstrate value and contribution to the organization.
- 26% of marketers graded their MPM efforts as an “A,” meaning marketing is able to measure and report contributions to the business.
- 50% of marketers rated their efforts a “B.” Marketing programs made a difference, but contributions to the business weren’t measured or reported.
- The rest of marketers reported their MPM as a “C” or “D.” Efforts made some impact, but they weren’t material or measured, or their efforts didn’t make a difference and there wasn’t clarity in how marketing contributed to the organization.
Jerry went on to highlight that there are three key areas of differentiation between the best in class – the “A’s” – and the rest of the marketing pack:
- Marketers who exceed expectations understand the businesses they serve. Best-in-class marketers are effective in communicating their impact in terms of revenue, market share, customer loyalty and other measures relevant to the business leaders.
- Top-performing practitioners build a culture around informing their decisions using data and derive metrics from corporate objectives.
- Best-in-class marketers have a defined and dedicated marketing operations function.
Becoming an Organization That Is Great at MPM
As you start making organizational or technology changes, Brian walked through three foundational elements needed for successful MPM progress.
- Leadership alignment on objectives. What are we going to accomplish and how will we measure success? Find representatives from finance and IT to partner with to establish your MPM program. Identify and agree upon the most important priorities for the organization to address now, and then in the mid- and long-term.
- Change management within the marketing and finance teams. Change can be especially hard for team members who haven’t been part of the leadership discussions about MPM. Use a structured change assurance program to manage and measure change progress carefully.
- A communication plan to ensure organization-wide commitment to the change. Get to know ALL of your stakeholders intimately – including executives, campaign managers and directors, finance and IT – and plan your communications throughout the process around their needs.
To succeed in marketing, you have to place energy in MPM. MPM enables marketing to consistently achieve business goals and sustain performance – and function as a center of excellence.
Watch the full webinar recording for additional resources – including the MPM Health Check.
To learn more about how marketing organizations can use MPM to create high-performing environments, see The Essential Framework for Optimizing Marketing Performance.
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