Internal Metrics for Marketing

Marketing measurement and accountability are the roots of our company. From the very beginning, our passion and focus have been on measuring Marketing, Marketing metrics, Marketing accountability, Marketing alignment, Marketing analytics, and performance-driven Marketing. We’ve published a steady stream of articles, white paper,s and books since we began in 1999. In all of these, the underlying message to marketers is that business is all about number,s and while Marketing must retain its creative capacity, it must also demonstrate analytical competency.

In a world where data has become a primary asset, every marketer needs to be data literate and a good data steward in order to support measurement initiatives.  Solid measures and metrics take quality data.  What kind of data and measures? As an outward-facing organization, Marketing leaders and professionals must focus on measures that enable the company to acquire and retain customers, and grow customer value. Our presentations and practices all strive to help business and Marketing executives and professionals link Marketing initiatives to business outcomes and to measure Marketing’s impact on the business.

While being able to demonstrate how Marketing is moving the needle, we must also keep in mind how we will measure how well we are running Marketing.  These measures need to move beyond reporting on the percentage of the budget spent, the number of programs per people or the cost per program. These types of measures lead us down the path of trying to do more with less.  This approach often leads to sacrificing effectiveness for the sake of efficiency.  So, what metrics should Marketing use to measure the internal workings of the organization? This is an especially important question to answer if you are trying to create a world-class Marketing organization and a culture of accountability.

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The Business of Running Marketing

Below are our recommended performance indicators for the running of Marketing. These will provide insight into your organization’s effectiveness while still maintaining focus on creating business impact. CMOs are continually working to strike a balance between measuring performance in order to reduce costs and making sure they’re spending enough on people and programs to improve the business.

1. Failed customer interactions: How many customer interactions (both internal and external) failed? This could provide valuable ways to create an early warning system to identify when a customer engagement is at risk of failing, so intervention steps can be taken.

2. Staff Strength: Performance, analytical capabilities, technology, and new marketing techniques competence, and marketing spending as a percentage of gross profit are all important measures, because strong teams should be able to deliver more for the money.

3. Perception of the team: Measures might include measuring availability, responsiveness, and on- time and on-budget project delivery, and the gap between perception and actual performance.

4. Speed of execution: Quality, spee,d and efficiency in program development are all needed for competitive advantage and cost-effectiveness.

5. Team turnover: Team retention, loyalty, and tenure are all important to improve team effectiveness. Just like a Net Advocacy score for external customer satisfaction measurement, you can create an internal advocacy score around two questions: Would you recommend my area to a co-worker, and would you recommend your boss to a co-worker?

6. Innovation: We want both proven and tried as well as innovations in our marketing mix. This metric examines the time spent on creating new capabilities, how many programs use new technologies or processes, and how much, if an,y the innovation affects customer engagement.

7. Innovation to support ratio: For this metric, you might look at the number of dollars allocated toward innovative projects versus support functions.

8. The ratio of high impact to low impact projects: Compare how many projects score high on impact criteri,a such as increasing revenue, improving customer loyalty, decreasing costs, etc,. vs. those that don’t.

CMO’s who want to look at these types of metrics will need to be sure they have the right tools for tracking. If you are interested in learning more about Marketing accountability best practices, we encourage you to give us a call or schedule a meeting. What have you got to lose?

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