Marketing Analytics & Accountability To Optimize Revenue
-
Upload
julie-benlolo -
Category
Documents
-
view
650 -
download
0
Transcript of Marketing Analytics & Accountability To Optimize Revenue
AMA Marketing Effectiveness
Online Seminar Series
Anna Carbonara
American Marketing Association
Check out the AMA website
Marketing Analytics
HelpingYouStayAccountable,Op5mizeRevenueandSleepatNight
Page
Agenda
1. Marke5ngischanging‐wherearewetoday?2. Outcomebasedmeasurement3. Performancedrivenmarke5ng4. Keyanaly5cprocesses5. Casestudy:howMarketomeasuresmarke5ng
performance
© 2009 Marketo, Inc. Marketo Proprietary and Confidential
Page
FaddishMissingthebroadperspec5veThegroupthatmakes“colorbrochures”Metricsthatdon’t(directly)impactthebusiness–awareness,leads,andcoverageCostcenter
Fundamentalproblem:otherCXOsdon’tunderstandtheroleofmarke5ng,andmarke5ngdoesn’tcommunicateit
Marketing has an Image Problem
© 2009 Marketo, Inc. Marketo Proprietary and Confidential
Page
The Changing Role of the CMO
Strategicandfinancialleadershiptotheorganiza5onCustomerfocusExcep5onalmeasurementandanaly5calcapabili5esRigorousfinancialandbudgetmanagementHardfinancialmetricslikerevenueandcashflow(“thefinanciallanguageofbusiness”)
© 2009 Marketo, Inc. Marketo Proprietary and Confidential
Page
LessonslearnedfromSales:DefinedprocessandmethodologyMeasureoutcomes,notinputsForecastresults,notspendingUseautoma5ontechnology
WhoOwnsRevenue?
Salesowns“in‐period”revenue
Marke>ngowns“out‐of‐period”
revenue
Earn a Seat at the Revenue Table
© 2009 Marketo, Inc. Marketo Proprietary and Confidential
Page
…andigniteexplosiverevenuegrowth.
“InoursecondyearofusingMarketo,wenowdrivesignificantlymoresalesopportuni5eswiththesamebudgetandhaveincreasedsales‐readyleadsby400%.“‐JohnWaEon,ShipServVPMarke5ngandB2BMagazine2009MarketeroftheYear
...tochangethewaymarke>ngandsalesworktogether…
Priori5zeanddeliverhighqualityleadswithlesseffort
Understandandinteractwiththehofestleads
Closemorebusinessfaster
Achievesmartersellingandhigherwinrates
• Lowersriskandtotalcostofownership
Morethan300mid‐marketandenterprisecompaniesuse…
• ‘BestMarke5ngAutoma5on’appbySalesforcecustomers
…MarketoLeadManagementandMarketoSalesInsight…
• Uncompromisingsolu5onsformarke5ngandsaleseffec5veness
Introduction to Marketo
© 2009 Marketo, Inc. Marketo Proprietary and Confidential
Page
Foundedin1999andheadquarteredinAus5n,TX,VisionEdgeMarke5ng,Inc.servesmorethan100customers,andcoun5ng.
VisionEdgeMarke5ng,Inc.isadata‐drivenandmetrics‐focusedmarke5ngfirmthatspecializesinimprovingmarke>ngperformanceandcrea>ngcompe>>veadvantagedesignedtoafract,secureandretainprofitablecustomers.
Servicesinclude:
Marke5ngperformancemanagement
Marke5ngandsalesalignment
Productandstrategicmarke5ng
Pipelinere‐engineering
Professionaldevelopment
VisionEdge Marketing: Experienced Practitioners
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Marke5ngbudgetswerecutover20%onaveragein2009vs.levelsin2007/2008AccordingtoB‐to‐BMagazine2010Outlook:Marke5ngPriori5esandPlans”survey,“in2009nearly60%ofmarketerscuttheirmarke5ngbudgetsinresponsetotherecession.”
Thenumberofcompaniesthatcutmarke5ngbudgetsin2009is25%higherthanpredictedinJanuary2009Inonesurvey(Forrester)lessthan20%ofcompaniesareexpec5ngmarke5ngbudgetincreaseswhileover40%areexpec5ngfurtherreduc5onsin2010.
The State of Marketing Budgets
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Theproblemfacedbymanymarke5ngprofessionalsisthat,tradi5onally:
marke5ngbudgetsarebasedonapercentageoflastyear'srevenuesorbudgetwhichignorestherela5onshipbetweenmarke5ngspendingtoeffec5venessandhasashort‐termfocusleadingtolimitedsuccess.
Op5mizingthemarke5ngbudgetisavaluablestrategictool
A Never Ending Cycle
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Show Me the Money
VEMMPMStudy2009
•Whereisthemoney?•Whatisthebusinessimpact?
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Understandthemarketandcustomers
Developandexecuteastrategytocreatepreferenceandconsidera>onthatenablestheorganiza5onto:
Acquiremoreofsomething
Acquireitfaster
Acquireitcheaper
Otherwise,youmightaswelljustputmorefeetonthestreet
Needtodemonstrateweare“geqngthejobdone”
Why Companies Invest in Marketing
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Customers Connect Marketing to the Business of Business
“Thepurposeofabusinessistocreateacustomer.”
‐PeterDrucker
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Marketing’s Three Primary Roles:
FindProfitableCustomers/Consumers Theprocessofacquisi5on Newcustomeracquisi5on–netnewbusiness
KeepProfitableCustomers/Consumers Theprocessofreten5on/renewals
GrowProfitableCustomers/Consumer Theprocessofincreasingthevalueofyourcustomerfranchiseandbrand‐Cross‐selling
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Our 3 Roles Enable Us to Move 3 Business Needles
Find/SecureProfitableCustomers
Acquisi>on
KeepCustomers
Penetra>on
GrowCustomerValue
Mone>za>on
MarketShare Life>meValueBrand/
CustomerEquity
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
The Impact of a Job Well Done
•EnjoyEconomiesofScale•MaintainGreaterProfitability•MoreLeveragewithSuppliers
•Higherreferralrate•Lesscosttoserve•Lesspricepressure
•Lessvulnerabletocompe55on•Befersuccessrate•Higherprices
Acquisi>on MarketShare
Life>meValuePenetra>on
Mone>za>onBrand/CustomerEquity
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Our Objectives Aren’t Aligned with the Business
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
And Neither Are Our Budgets
Ahypothe5calbutalltoocommonmarke5ngbudget:
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
As A Result, We Have Trouble Demonstrating Our Value
VEM MPM Study 2009; n=232
Lessthan20%ofC‐SuitegiveMarke>ngan“A”vs.nearly50%ofCMO/VP
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Time for a new approach and a new way to budget
•BuildIni5a5vesAroundBusinessOutcomes
•Alignbudgetandmeasureourimpact,valueandROIonwhatmaferstotheC‐Suite
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Performance Management
…theprocessofmeasuringprogresstowardachievingkeyoutcomesandobjec5vesinordertoop5mizeindividual,groupororganiza5onalperformance.
CMOCouncil's2008Marke4ngOutlook
“ThetopchallengeformarketersremainstobeEerquan>fyandmeasurethevalueofmarke>ngprograms,"inspiteofimprovementsinaccountabilityoverpreviousyears.
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Performance Management Best Practices
MeasurementCompetence
Analy>csandSkills
MoreStrategicMetrics
BeEerToolsandProcess
Nearlyeveryonesaysbusinesswithexis5ngcustomersisimportant,fewusemetricssuchaslengthofcustomertenure,purchasefrequencyandrecency,valueoftheoverallcustomerbase,customerlife5mevalueandshareofwallet
•Otherthanleadstoconversion,tracklifleelse.(VEM2009)
“Shockinglylowinvestmentsinmarke5ngtechnologyands5llimmatureprocesses”(IDCDec2008)
“Realsuccesswillcomefrombeingsmarterandmorestrategicinopera5ons”(B‐to‐B2009)
“Lackemployeeswithspecificmarke5nganaly5csexper5se”(Forrester2008)
“Lessthanhalfofrespondentsuseanaly5cs”(Alterian2009)
“Pressurehasmountedonmarketerstoaccuratelypredict,measure,andop5mizeresults”(Marke5ngSherpa2009)
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Requires Performance-Based Marketing
Haveasetofmeasurableperformancestandards,apointedfocusonoutcomesandclearlinesofaccountability‐allofwhichareimportantifamarke4ngorganiza4onwantstoproveitsvalue.
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Measurement Competency
Seemeasurementandmetricsatpowerenablingmarke5ng
Influencedecisions Communicateimpact Demonstrateaccountability Recommendac5on Playastrategicrole
Takeanoutcome‐basedapproach
UsePerformanceTargetSeqngforcon5nuous
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
It all Starts with Business Outcomes
Name Descrip5on/Defini5on Examples
Outcome Aconsequence,result,effect
Howtheorganiza5onwillmeasuresuccess
Ranked#1intheregionformyage
Achieve#1marketshareinXYZmarket
MeasurableObjec5ve
Stateswhatistobeachievedandwhenresultsaretobeaccomplished
Whatyouwilldotomovetheneedle?
Accumulatethemostpointsperraceinmyagegroup
IncreasepreferenceforABproductamongtopsharedeterminersinXYZmarkets
KeyPerformanceIndicator(KPI)
TheonlydifferencebetweenametricandaKPIisthataKPIembodiesastrategicobjec5veandmeasuresperformanceagainstthatobjec5veand/oroutcome.
RaceWins
Shareofpreference
ProductAdop5onRate
PerformanceTarget
Acommitmenttoachieveaspecificandbeferqualityorlevelofperformanceoveraspecified5meframe.
Usedtoevaluateperformanceachievedcomparedtoperformanceexpected
Pace(miles/hour,mins/mile)
#ShareDeterminerQualifiedLeads
#ShareDeterminerRFPs
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
A Vital Relationship:Outcomes and ObjectivesOutcomes
Tiemarke5ngtothebusinessoutcomesattheoutsetUnderstandwhatyourcompanyistryingtodoandwhichofthosethingsyoucandirectlyandindirectlyimpactAimforcustomer‐centricoutcomes Finding Keeping Growingthevalueof
customers
Objec5vesEstablishmeasurableobjec5vesandstrategies5edtocustomer‐centricOutcomesYouranalysisservesasthebasisforseqngperformancetargetsforyourobjec5vesandstrategies
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Improve customer advocacy score by 10% by YE2009
Performance Based Marketing Objectives
Realis5c
Measurable
Timespecific
Alignedandconsistentwiththeorganiza5on’spriori5es
Establishperformancetargetsthatare:
25% of existing customers will adopt new XYZ product within 6 mos. of launch at launch price $A
Contribute 25% of the qualified new opportunities to the pipeline quarterly
Increase referral rate of existing customers by 40% by YE2009
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
WhatWouldTheShi`LookLike:
FROMMeasuringAc>vity
• Runsixhalf‐pageadsinallTieronetradepublica5ons
• Exhibitattheprimarytradeshowforeachver5cal
• Createproductbrochurefornewproduct
• Reviseonlinedemo• Generate500leads• Implementapromo5onwithtwo
distributors• Distributenewslefer65mes• Sendemailblaststoprospectsmonthly• Conductcustomersa5sfac5onsurvey• Researchcustomerproduct
requirements
TOLinkingtoOutcomes
• Add7‐8newstrategicaccountstosupportNAMarketPenetra5on
• Increasecustomerlife5mevaluefromXtoY• Growshareofwalletamongourtopcustomers
fromAtoB• IncreaseTieronecustomerspurchaseto2or
moreproductsfromtheYFamily• Add3newVARsineachofthreeprimary
ver5cals• Addonenewchannelpartnerineachregion• GrowTieronedistributorssalesbyX%• GrowourproductcategorybyX%• Increasepenetra5onofABCproductinTier
onecustomersby15%• ImproveourNASfrom10.2to16• ChangeourMVIfrom<100to>100
Howdoesthischangethebudgetprocessandconversa>on?
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Adopt a Metrics Framework:Tactical Strategic
Ac>vity‐Based
Opera>onal
Outcome‐Based
Leading‐Indicators
Predic>ve
Coun>ngMediaMen5onsTradeshowleadsClickThroughRatesSiteRegistra5onsDemoDownloads
EfficiencyLead/RepLeadAgingCampaignROIProgram:PeopleRa5o
BusinessOutcomesMarketShareCategoryOwnershipLife5meValueAdop5onRates
LikelihoodofOutcomeShareofWalletRateofGrowth:MarketBrandPreference
Cost/BillingDollarProgramspend/headcountProgram/TotalSpendAwareness:DemandRa5o
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Illustrating the Importance of Selecting the Right Metric:
CaloriesorPacevs.Running5x/week
Lose20lbs.bytheendoftheyear
Finisha5Kinunder28minutes
Differentoutcomesmeandifferentmetricsofsuccess,eventhoughmayusethesametac>cforeach
What’sthemetricforthe:
Loseweightoutcome?
Finish5Koutcome?
MeasuringAc5vityvs.Outcomes
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Outcome-Based Measurement
Characteris5csofEffec5veMetricsAccurateandPreciseReliableRelevantAlignedOwnedPredic5veAc5onableEasytounderstandTransforma5veStandardized
ConnectMarke>ngInvestmentsandMetricstotheBusiness
1. Beginwithbusinessoutcomes
2. Iden5fymostimportantmeasuresofsuccess
3. Defineperformanceindicatorsconnectedwiththesemeasures
4. Determinewhichdataprovidesnecessaryinforma5on
5. Focusonthemostrelevant,essen5al,&valuableac5ons
6. Analyze&report
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Select Outcome-Based Metrics Based on Marketing’s Job
BusinessOutcomesandMarke5ngObjec5vesProvideInsightintoMetric
CertainFacetsofPerformanceMoveNeedlesforEachGauge
5Customer/BrandEquityIndicators
• PricePremium
• NetAdvocateScore
• CustomerFranchiseValue
• NewProductAcceptance/Adop>onRates
• ProductMargins
4Life>meValueIndicators
• PurchaseFrequency
• ShareofWallet
• Advocacy/Loyalty
• Tenure
5MarketShareIndicators
• ShareofPreference
• ShareofVoice
• ShareofDistribu>on
• RateofCustomerAcquisi>on
• RateofGrowth:Market
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
1. Engage‐theleadershipteamtounderstandtheorganiza5on’semphasisintermsofresourcesonfind,keepandgrowtocreateanalloca5onmodel
2. Establish‐measurablemarke5ngobjec5vesaroundcustomeracquisi5on,reten5onandvaluegrowth.
3. Develop‐programstosupporteachobjec5veandlinkeveryprogramtooneoftheseobjec5ves.
4. Iden>fy‐everyelementinthemarke5ngmixanditsassociateddollarsforeachprogram.
5. Tally‐theinvestmentneededforeachprogram,objec5veandoutcome
6. Allocate‐thedollarsbasedonthemodel
7. MonitorMonitorhowwelltheprogramsperformedagainstyourcommifedtargetsandbudget
Trackandmeasuretheimpactofmarke5ngprogramsTrackandmeasuretheexecu5onofamarke5ngprogram.Trackallthepeoplebothinternalandexternal,andallthesteps,includingapprovals,tounderstandthetotalcostofprogramexecu5on
8. Report‐effec5veness,impact,efficiency,valueforthemoney
Tie the Budget Back to the Business
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Measurement is the Foundation to ROI But…Itisn’ttheonlyfactor1. Designandselectmetricsthatmeasure
marke5ng’simpactonthebusiness
2. Usemetricsthatmeasureefficiency,effec>venessandpayback
3. Createameasurementmanagementsystemandconsistentlyuseit
4. Captureperformancemetricsasquicklyaspossibleinordertoins5gateimmediatechangeinexecu5on
5. Reportresultsandperformanceinreal5me
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Analy>csandthePerformance‐DrivenMarke>ngOrganiza>on
Analy5cs:Theabilitytodriveac5onableinsightsfromdataCri5caltofacilita5ngbeferandfasterfact‐baseddecisions
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Data and the Performance-Driven Marketing Organization
PerformanceDriven‐Marke5ngOrganiza5ons Embracedata‐Seedataasthe
founda5onforsuccess Getthebestdatapossibleanduseit
inapre‐defined,unbiasedway Installanduseadatamanagement
system Createandmaintainadatainventory
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Three Additional Critical Success Factors:
Processes,Systems,Tools
Skills&Training
Solu5onstotheproblemsofmarke5ngaccountabilityandcrea5ngaROMIculturebeginwithtraining(ISBM)
Culture
Create,rewardandliveameasurementculture
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Four Key Processes:
Establishaprocessthatenablestheorganiza5ontomakeadjustmentsinreal5me–ratherthanlookingintherear‐viewmirrorLeverageindustrybestprac5cesandcompanyinsightsforcon5nuousimprovementopportuni5esDeployprocessesthatallowyoutomodifymetricsandthedashboarddesignasneeded
Doyouhavetheseprocesses?
Datacollec5onandanalysisprocess
Programperformancetargetseqngprocess
Metricsandmeasurementprocess
Repor5nganddashboardprocess
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Take Your Accountability to the Next LevelCreateaperformancemeasurementsystembasedondataandanaly5csAdoptaframeworkthatiden5fiesmetricsthatimpactorganiza5on’seconomicperformanceandstrengthsLinkmarke5ngandthebudgettobusinessoutcomesEmbraceacultureofaccountabilityAddtherightskills,systemsandtools
© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential
Page
Marketo Demand Generation Funnel
Pend
ing
ProspectRecycled
Lead Oppor‐tunity
Cust‐omer
Awaren
ess
Name&Email In‐Profile Sales‐Ready
/Score>65SalesActive
Anony‐mous
Inqu
iry
NurturingDatabase
© 2009 Marketo, Inc. Marketo Proprietary and Confidential
Page
Demand Generation Model
Opportuni5es($1,550)
NewCustomers($5,166)
Leads($140)
NewProspects($72)
29%
Ac5veProspectDatabase
4.0%/month
25‐30Opps.from:‐SalesOutbound
75%
PaidInquiries($33)
7.2%FreeInquiries($0)
75%
25%50%
30%
Inac5ve
30%
52%ofprospectseventuallybecomealead
12.6%ofleads/1.4leadsperopty=9%leadtoopty
71%
© 2009 Marketo, Inc. Marketo Proprietary and Confidential
Page
Demand Gen Metrics Dashboard
Prospect Lead Opportunity Win
Allnumbersthreemonthaverages(exceptOpportunitySources)© 2009 Marketo, Inc. Marketo Proprietary and Confidential
Page
Demand Generation Forecast
Leads Jun Jul Aug Sep Oct Nov Dec Jan FebJun 403 450 470 500Jul 462 470 500 530Aug 475 500 530 600Sep 521 530 600 625Oct 557 600 625 800Nov 782 650 800 825
Opps Jul Aug Sep Oct Nov Dec Jan FebJul 61 63 66 70 72Aug 65 67 70 72Sep 69 72 74 80Oct 74 74 83 85Nov 81 83 85 90
Prospects Q2 2009 Q3 2009 Q4 2009Aug 1,824 2,500 3,050Sep 2,668 4,250Oct 4,500Nov 5,200
Forecast Actual
© 2009 Marketo, Inc. Marketo Proprietary and Confidential
Page
Lessons Learned
Today’smarketersmustearnaseatattherevenuetableMarke5ngobjec5vesandbudgetsmustalignwithbusinessobjec5vesMetricsshouldbebasedonoutcomes,notac5vi5esPuttherightprocessesinplacetocapturemetricsandoutcomesTiebudgetbacktothebusiness
© 2009 Marketo, Inc. Marketo Proprietary and Confidential
Page
Question and Answer
LauraPaEersonPresident&[email protected]
©2009Marketo,Inc. MarketoProprietaryandConfiden5al
For More Information on our host, ReadyTalk, visit ReadyTalk.com/ama
Thank you for your Participation!
To replay this webcast:www.marketingpower.com/webcasts
Continue the Conversation on Twitter: #MARKETO
Questions for the AMA:[email protected]