Marketing Effectiveness

New Metrics for a New CMO

April 9, 2009 4:02 PM

by Michael Pierre, VP/Connection Planning, The Halo Group

Ask three CMOs to define their roles and you’ll get three different answers. But one thing they will all agree on is that they are ultimately responsible for and will be evaluated on the growth of their business. The role of CMOs is changing; therefore, the metrics that are used to evaluate the programs they put in place, and that ultimately drive their business, have to change as well. With the consumption habits of today’s consumer in constant flux, CMOs need to build programs that reach consumers across multiple channels. In order to measure these programs effectively, an entire new set of metrics has to be developed that takes into account all the different connection points where consumers go to consume their media, TV, radio, print, online, mobile, and now even social media. These new metrics then need to be put in place, not only to measure and evaluate the effectiveness of the overall marketing campaign, but also to see how each program impacts the others. Did the offline campaign drive people to the site? Did the online campaign drive people to call or go directly into a store? So, taking the time to put these key metrics in place will provide value and will provide the structure needed to properly evaluate what does and does not work.

There are three key metrics that can be chopped up and dissected to meet the needs of any business and that should be at the top of the list: maximize ROI, identify and reduce waste, and compare performance to internal and external benchmarks (if internal or external benchmarks haven’t been set up, that’s an entire topic in itself). Once these metrics are established, a system should be established to enable the results to be communicated to the appropriate people. Hidden within these three key metrics is an ever-growing number of new metrics, such as:

Company Buzz — The level of buzz a company, brand or product is generating over time.
Relevance — How relevant is the company, brand or product to its consumers’ needs?
Sentiment — What’s the positive, negative or neutral opinion about the company, brand or product?
View Throughs — A user sees the company’s online creative and goes to the site, but never clicks on the ad.
Interaction Rate — The amount of time a user spends interacting with a piece of a company’s creative.
Video Plays/Streams — The amount of time an online video was played.

Fortunately, technology is playing a big role in helping to pull all of these metrics together. With the continued evolution of ad-serving companies like Mediaplex and Dart, old-school monitoring companies like Nielsen and Arbitron increasing their digital capabilities, and new technology companies popping up every day, developing new metrics and tying all of this data together is not only a necessity, but is also essential for the new CMOs in driving their business and their bottom line.

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Is Sales Wasting Your Marketing Dollars?

February 27, 2008 12:00 AM

By Linda Passante

Marketers used to believe their job was done as soon as sales leads started coming in the door. And that, ladies and gentlemen, is how marketing dollars are wasted. Successful marketers help turn leads into customer conversions because they understand that ultimately sales is the most valuable metric for measuring marketing efforts.

In attempting to fulfill their responsibility to connect campaigns to the bottom line, CMO's have discovered that their efforts are hampered by poor conversion rates resulting from an underperforming sales team. So, marketing needs to understand how to communicate with the sales department and effectively motivate the team responsible for converting leads. Here are the right questions to ask the sales management team and assess whether the right processes are in place for success.

How can Sales Management get the most out of their sales team?
The sales team leader needs to develop a better understanding of the people in the team he or she is leading. The critical question to ask is if the salesperson had an additional ($X) amount of money, how would he or she spend it? Unfortunately, most sales team leaders do a superficial job of understanding the needs of the people in their team. Here is a typical situation. Sales Management increases a salesperson's sales quota versus last year. There are two things to keep in mind. First, the quota will likely not be achieved if the company lacks a compensation plan that rewards the salesperson for this increased production. When Sales Management sets the yearly quota, they need to answer the critical question: What is in it for the salesperson? Second, the team leader needs to know each salesperson's motivational drivers. How will the incremental income generated by achieving the increased production affect his or her life and the family that depend on him or her? The rudder that steers the ship is aligning the individual personal goals of the team member with the goals of the organization.

What's the most effective way to have a sales team take ownership of the sales process?
Tie the performance goal to a sales behavioral plan. If this year's goal exceeds last year's performance, you should identify what activities they need to be doing now that they weren't doing last year. Exceptional salespeople make their own opportunities, irrespective of market conditions. They typically do this by reaching out to new prospects and expanding the scope of existing relationships. An effective team leader will help each salesperson develop a behavior plan designed to meet the quotas. The plan should include metrics for expected behavior (i.e., number of cold calls, networking events, external referrals received, qualifying meeting with prospects, closing meeting with prospects, current client up-selling, qualifying and closing meetings, strategic alliances secured, etc.).

In establishing a behavioral plan, how can you manage the progress of your sales team?
Develop a mechanism to track each salesperson's behavior, and review actual versus planned behavior on a regular basis. There are a number of contact management systems that now allow a company to customize and track.

Most companies evaluate a salesperson's performance based solely on sales results. The problem is sales results don't often occur until well after the salesperson's behavior or lack of behavior. The amount of time separating the two is predicated on the length of a company's sales cycle (i.e., the typical amount of time to move an inquiry through pre-qualifying, qualifying, requirements, validation, negotiation, and close stages). This can take weeks, months, or even years based on the company's products, services, and the requirements of the potential buyers being targeted.

To illustrate this point, if a company's performance metric is solely sales results and they typically have a six-month sales cycle, the team leader would not know until July whether the salesperson was doing the necessary prospecting activity in January. By the time the team leader could take corrective measures, it might be too late to affect sales results in the company's current fiscal year.

How would you ensure buy-in on the part of the sales staff to protect your investment in a new sales management approach?
Have your salespeople sign a contract. It should outline the behaviors that they pledge to perform in meeting the sales quotas. Each salesperson would also agree to report honestly and factually his or her actual sales activities versus the plan. In addition, the team leader should sit down to adjust, refine, coach, and mentor every few weeks with each team member. During these sessions, the team leader should keep the personal goals in alignment with the business goals, thus achieving the highest level of motivation.

Tim Brenton is President and founder of the Brenton Group, Inc., [www.brentongroup.com] a sales, sales management, and negotiating skills training company located in Boston, MA. He has a national reputation as speaker and trainer to professional services companies looking to create high-performance business development people. Some of Tim's accounts include EMC, Palm, HP, McCann Worldgroup, American Association of Advertising Agencies, The Halo Group, The Boston Globe, and Boston Private Bank & Trust Company. He can be reached at tbrenton@brentongroup.com.

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A Performance Dashboard for the New CMO

January 22, 2008 12:00 AM

By Linda Passante

The marketing department has traditionally existed outside the revenue column. But, it's time to demand the same demonstrable results that you would require of any of your business units. Marketing is more than a maker of multi-media; it is a catalyst that reenergizes how the company thinks, invests, acts and connects to your bottom line.

However, traditional business standards of measurement don't tie marketing directly to that bottom line and companies struggle to establish performance benchmarks for their marketing teams. So how do you measure the efficacy of your marketing efforts?

Revenue is still the key metric. And your marketing department will help you produce it. But rather than simply measuring quarterly spikes in sales revenue, growth should be linked to activities along the entire customer continuum: reinforcing the brand message with all customer-facing employees, engaging the consumer, and empowering the sales team to close the deal, and training customer service departments to protect your customer relationships.

Evaluate your customer against goals. There is a lot of available data. Lead generation, website visits and click-to-open rates must be measured. But a deeper analysis of the synergistic relationship between marketing and sales should reveal the programs that have delivered the most profitable, long-term customers that every business needs. There are clear indicators of success. How many potential customers are at the top of the pipeline? How did they find out about your service? How many pitches are you converting into business? More important, is the business you're converting in line with your marketing strategies? Global diversification, channel development, and breaking into new customer segments can be more important markers for success than overall sales volume.

Buzzmetrics may be a better indicator of market awareness. Market awareness is always a marker of performance. But, traditionally, it has been a static statistic. In today's engaged marketplace, customer-generated media such as tweets, blogs and online forums can influence your brand's image, impact sales and are important to track. Articles involving your corporation, expert quotes, invitations to speak or requests for intellectual capital are all measures of trust and credibility. Determine if your Google page rank is ascending as you look at mentions of your brand online. By finding the baseline of coverage, you can identify the tipping point for when your company's ideas went mainstream.

Retaining top quality staff is critical in driving revenue. The ethos of your organization should be defined when a new hire walks in the door. By firmly establishing your corporate culture and the expectations of staff, you're enabling your team to create a better customer experience. The appropriate step at every interaction for the customer should be understood and assessed through internal interviews and training knowledge surveys.

Client satisfaction is a key indicator of continued financial stability. Do you have an online brand manager or is your agency "listening" to the chats, tweets and blogs where your customers are commenting? There are now a number of formulas to measure your customers' level of satisfaction, based on their activity. Surveys are a diagnostic tool designed to capture specific customer feedback, identify service gaps and pinpoint weaknesses in operations to more effectively strengthen customer relationships.

Ultimately, you need to develop a dashboard of richer metrics of success, which account for other aspects of business development, in addition to revenue growth. With the creation of multi-dimensional metrics, you can create the same culture of accountability in your marketing department. By formalizing the capture and reporting these metrics, you can streamline your marketing initiatives and also develop a deeper understanding of what drives revenue growth and bottom line performance.

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