Lynn Hunsaker, President of ClearAction, and our President, Laura Patterson, were asked to update the marketing performance management wiki. Below is what was submitted to the free encyclopedia.

See how close we came – check out the final version. 

Marketing performance management is the systematic management of marketing resources and processes to achieve measurable gain in return on marketing investment and increased marketing efficiency, while maintaining quality and increasing the value of the corporation.[1]

Marketing performance management is a central facet of the marketing operations function within marketing departments.

Marketing performance management relies on a set of measurable performance standards, a pointed focus on outcomes, and clear lines of accountability (i.e. roles and consequences).

Marketing performance management comprises six success factors: 1) alignment, 2) accountability, 3) analytics, 4) automation, 5) alliances, and 6) assessment. [2]

1. Alignment
Alignment of marketing activities and investments to business outcomes occurs when a marketing organization establishes a direct line of sight between marketing activities, investments, and business outcomes.

Alignment begins with enterprise objectives to ensure that marketing efforts are in sync with what the company is striving to achieve. Enterprise goals can be cascaded to the business unit level and then to the department level to maintain consistency and drive synergy both horizontally and vertically. Marketing objectives that are developed this way can be cascaded to all of the marketing sub-functions for alignment.

2. Accountability
Accountability is the monitoring and measurement of the commitment a person, group, or organization makes to deliver specific, defined results relating to the enterprise’s financial and strategic objectives.

Selecting the right metrics, integrating performance targets, and producing actionable dashboards are all integral to accountability.

Accountability encompasses making a commitment to a particular action, accepting responsibility for completing that action, and then disclosing how well you performed against your commitment. Accountability requires commitments, metrics, and consequences (positive and negative).

2a) Metrics
Measurable performance standards are called metrics, which are the cornerstone of accountability. Marketing metrics encompass Activity, Output, Operational, and Outcome categories:

  • Activity metrics relate to the number of things done in a process, such as the number of new blog posts or the number of events.
  • Output metrics relate to the result of a process, such as website traffic, media mentions, or event participants.
  • Operational metrics relate to the efficiency and effectiveness of a process, such as cost per lead, revenue per customer, revenue per sales representative, cost per customer, or leads per sales representative.
  • Outcome metrics relate to the consequences of a process’s outcomes, such as revenue, profit, win rate, pipeline contribution, share of preference, share of wallet, or share of market.

2b) Indicators
To manage causes and effects, managers identify Leading Indicators and Lagging Indicators:

  • Leading indicators are metrics that a manager can monitor before stakeholders see results. They are in-process metrics and process-input metrics that serve as warning signals of output, operational, and outcome metrics. Within a workflow diagram, the questions represented by a diamond are typical sources of leading indicators. They indicate whether there will be re-work, scrap, waste, or delays in what the process is meant to achieve. They are actionable and predictive. By monitoring leading indicators, managers can intervene to attain higher performance.
  • Leading indicators are metrics that a manager’s stakeholders see. They are post-process metrics (i.e., output, operational, or outcome metrics). Lagging indicators are important for seeing the big picture, but they are not actionable in and of themselves.

2c) Reporting
Marketing performance can be reported in a wide variety of formats (verbal, pictorial, graphic, tabular, text, dashboard), which are used for accountability and decision-making. Ideally, reports revisit past commitments or forecasts to enable learning and refinements for future performance.

Dashboards are particularly important in marketing performance management, visually displaying multiple metrics on a single screen or page. This allows managers to monitor performance at a glance and to be alerted when performance varies significantly above or below expected levels. Ideally, dashboards show the relationships between leading and lagging indicators. This can empower people at every managerial level.

3. Analytics
Analytics seeks to identify patterns in data by organizing it and applying mathematics, statistics, or algorithms to it. Analytics foster fact-based, data-driven customer, product, market, and performance decisions and develop models to support scenario analysis and predict potential outcomes.

Marketing analytics can be used to create models to help understand, monitor, and predict customer behavior, such as likelihood to defect or predisposition to purchase. It can help managers quantify performance, make and optimize channel and mix decisions, understand the impact of a campaign on a sales list, and create many other types of insights.

Data availability is accelerating at an unprecedented pace, and analytics technologies can help marketers quickly synthesize data from various sources. Analytics can harness the power of data by converting it to actionable information and models that guide strategic investments and decisions that drive marketing performance.

4. Automation
Automation of marketing processes reduces manual labor, errors, and inconsistency. It enables timely, personalized messaging to customers, prospects, and other stakeholders.

Automation provides infrastructure for marketing performance management. It spans marketing resource management, campaign automation, business intelligence, data management, reporting platforms, and scenario analysis tools.

5. Alliances
Alliances are arrangements between companies to create additional value together. Distributors, resellers, marketing agencies, and other companies may co-develop, co-promote, and/or co-deliver various parts of the marketing mix (product, price, promotion, placement).

Marketing performance management requires information transparency, clear roles, and smooth handoffs between alliance members.

6. Assessment
Assessment is the evaluation of strengths, weaknesses, and opportunities in marketing performance management. Assessment is typically conducted by benchmarking other organizations or comparing performance to a standard. Ideally, assessment is supported by a culture of genuine concern, dedication, and willingness among management and employees to continually improve performance.

Notes
[1] American Marketing Association, 2005.
[2] Marketing Performance Management Study, VisionEdge Marketing, 2001-2015.

See also

References

FAQ:

(written by Penn of Sintra.ai)
Q1: What is Marketing Performance Management (MPM)?
A: Marketing performance management is the systematic management of Marketing resources and processes to achieve measurable gains in return on marketing investment and increased efficiency—while maintaining quality and increasing corporate value. It is a central facet of the Marketing Operations function.
Q2: What are the foundational requirements of effective MPM?
A: A set of measurable performance standards, a pointed focus on outcomes, and clear lines of accountability—defined roles, commitments, and consequences.
Q3: What are the six success factors that comprise MPM?
A: MPM comprises six success factors:
  1. Alignment
  2. Accountability
  3. Analytics
  4. Automation
  5. Alliances
  6. Assessment
Q4: What does “Alignment” mean in MPM?
A: Alignment occurs when Marketing establishes a direct line of sight between Marketing activities and investments and the business outcomes the enterprise is trying to achieve. Alignment begins with enterprise objectives and cascades to business units, departments, and Marketing sub-functions to ensure consistency and synergy.
Q5: What does “Accountability” mean in MPM?
A: Accountability is monitoring and measuring the commitment a person, team, or function makes to deliver defined results tied to the enterprise’s financial and strategic objectives. Accountability requires commitments, metrics, and consequences—positive and negative.
Q6: What are the four categories of Marketing metrics used in MPM?
A:
  • Activity metrics: Number of things done (e.g., blog posts published, events executed).
  • Output metrics: Immediate results (e.g., website traffic, media mentions, event participants).
  • Operational metrics: Efficiency/effectiveness measures (e.g., cost per lead, revenue per customer, leads per sales rep).
  • Outcome metrics: Business consequences (e.g., revenue, profit, win rate, pipeline contribution, share of preference, share of wallet, market share).
Q7: What is the difference between leading and lagging indicators?
A:
  • Leading indicators are in-process or input metrics that provide early warning signals and enable intervention before results are visible (often tied to decision points in a workflow).
  • Lagging indicators are post-process metrics (typically output, operational, or outcome measures) that confirm results and provide context, but are not actionable by themselves.
Q8: Why are dashboards important in MPM?
A: Dashboards visually display multiple metrics in one place so leaders can monitor performance at a glance, detect meaningful variance, and make decisions. The most useful dashboards show relationships between leading and lagging indicators and connect Marketing performance to business outcomes.
Q9: What is the role of “Analytics” in MPM?
A: Analytics identifies patterns in data using mathematics, statistics, and algorithms to enable fact-based decisions and build models for scenario analysis and prediction (e.g., likelihood to purchase, likelihood to defect, channel/mix optimization, campaign impact).
Q10: What is the role of “Automation” in MPM?
A: Automation reduces manual work, errors, and inconsistency, enabling timely and personalized communications. It provides the infrastructure for MPM across resource management, campaign automation, business intelligence, data management, reporting platforms, and scenario analysis tools.

One response to “Marketing Performance Management Wiki”

  1. Suggestion: step one should be to develop or adopt an objective view of the market relevant to your company. For example, list Step #1 as:

    [1] Market Analysis / Environmental Scan

    This step is necessary to provide the proper context for all other steps.

    (Marketing departments that skip this step often miss golden opportunities, as well as threats.)

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