Seven ideas to stop marketing wastage
In any organisation, marketing is one of the most difficult functions, largely because there's so much to do and so little time, according to Guy Powell of DemandROMI, who warns that wastage in marketing campaigns has become a key 'pain point' during the recession, and suggests seven ideas to stop it happening.
There are, Powell says, many marketing chiefs and departments who simply don't have the tools or data to answer the most critical of marketing effectiveness questions: "how much extra revenue did the latest campaign bring in?"
To help counter this problem, Powell suggests seven key ideas:
- Account for your costs Determine how much you're spending on each marketing activity, and put in place a cost tracking system that can relate all direct and indirect costs to specific campaigns. For B2B marketers this includes the costs that the sales team, support and the channel spends to promote the product or brand in the marketplace. For B2C marketers, this means capturing the specifics of each campaign plan into a single spreadsheet or database, showing where and how each dollar is being spent for each week of each quarter or year. Remember to track creative development, production, and insertion costs, and compare actual execution costs to planned purchases.
- Track your activities Just as you need to track costs, you also need to keep track of what activities took place and when. How were online ad impressions and clicks purchased, and what media channels were used? What activities were done through partners or through your own sales team? With a good tracking system in place, you can start to look at ways to analyse this data to support strategic and tactical marketing decisions.
- Understand your consumer If you understand how your consumers process media, make purchase decisions and consume products in your category or market, you can be certain that you are measuring the right factors rather than simply measuring a few things that are most easily calculated. For B2B marketers it's very easy to measure the sales cycle, but it's much more important to measure the purchase cycle. And B2C marketers must understand how brand awareness and consideration translate at some point in the future into purchase and consumption.
- Track results Marketing results take place at two levels. Interim results, such as web visits, engagement, leads developed, brand awareness and consideration, as well as units and monetary value sold at the point of sale. Interim results should mirror how consumers act in the marketplace and should not be a reflection of your internal organisation. If you track results with the consumer at the central focus of your metrics you will be much more successful than if your metrics only reflect your own organisation. For point of sale data, in many industries, this means purchasing syndicated data (e.g. Nielsen, IRI or others). Put this data into a time series to see how or if your marketing activities drive incremental changes in the results at any point in the future. Don't forget to include your competitors' actions, their pricing, and their channel, advertising and product activities.
- Choose your analytical method carefully Depending on your environment and the availability of data, determine the kinds of analytical tools you could use to start connecting the dots between marketing inputs and outputs. Statistical modeling is certainly one approach to develop a robust marketing mix model, while other options can include split cell testing or agent-based modeling. Even something as simple as tracking the direct response from marketing activities can lead to some very useful insights.
- Question your results, and then act on them Make certain that your results truly represent how your consumers responded to your marketing campaign, by using control groups to weed out changing consumer trends, external factors, competitors' actions, and changes in the sales channel. If this is done correctly, the results will be robust and you will be able to make significantly better marketing decisions. However, if you're still not comfortable with your results, you should start with an in-market test (or some other form of market research) to revalidate your conclusions.
- Look for areas of improvement Once you start to make better decisions based on the first six ideas, you will quickly see the value of improved data sources, and it will make sense to invest further in more detailed information to make better and better decisions. Marketing risks will consequently be lowered, while forecasts will tend to be more accurate.
According to Powell, "There are two sure signs that you have begun to institute a culture of marketing effectiveness. The first - and probably the easiest - is whether or not you have a specific line item in the budget called 'marketing measurement' or 'marketing metrics'. Without this, you're always going to be wishing you had money and time to measure your results properly - and you will probably be among the first victims of budget cuts when times are hard."
Marketers need tracking and management systems just as much as any other department in the company, so when money is invested in marketing it's also worth investing both time and money in this kind of results tracking to validate each campaign and provide ongoing proof of ROI for senior management.