Five immutable laws of marketing measurement

Unfortunately, in a world where anyone can publish anything electronically and everything looks good at first glance, marketing measurement solutions are being tossed about rather casually. "ROI" has become shorthand to describe any ambiguous effort to associate spend with economic value. "Metrics" are anything on which you can build a bar or pie chart. And don't even get me started on "dashboards."

Measurement is not a fad; it is a cornerstone of success for marketers. Along with brand building, customer value creation, and product/service innovation, comprehensively and objectively measuring the payback on marketing investments, regardless of channel, is price-of-entry for a CMO to earn a "seat at the table" with other functions.

How then do you cut through the clutter of "surveys," "benchmarks," and other "best practices" being reported by software vendors, data purveyors, and consultants?

Here are a few common-sense guidelines to apply to anything you may read or hear.

1. The purpose of marketing measurement is to enable the firm to take smarter risks to achieve growth and attain competitive advantage. It is motivated by a desire to be more aggressive, efficient and effective with the marketing budget, not to "cover your ass." Check your motivation before you launch and make sure you are being honest about the desired outcome.

2. Everything can be measured. The question is, how much time or money is required to achieve a level of confidence in the outcome, and what is the value of higher confidence? Do not accept data gaps or inter-dependency as an excuse for inability to measure marketing's contribution to business outcomes. Some creative and cross-functional thinking can convert the challenge into an opportunity.

3. Make judgment explicit. When objective data is lacking, we all make decisions based on judgment, experience, and intuition. Most of that judgment is informed judgment. Making our assumptions and judgments explicit allows us to share them with others and benefit from being challenged, which in turn builds credibility in the inevitably judgment-based aspects of the measurement plan. Do not let waiting for hard data inhibit better decision-making.

4. Marketing is not an island within the company. Consequently, its measurement cannot be isolationist. Engaging finance, sales, and business units in the marketing measurement process is critical to learning and to credibility.

5. Availability bias is blinding. Looking only at the data you have (or that which is easiest to collect) inevitably reinforces the current view of the world. Altruistic attempts to use available elements will almost always distract constrained resources from the path of progress. Effective measurement defines knowledge requirements beyond the information at hand and relentlessly pursues closing the gaps.

So the next time someone trumpets their survey of what 1000 "marketers like you" are doing "to increase ROI," challenge it with the same vigour you would a business plan requesting your funding. Resist the temptation to believe that the median scores of companies having little in common with yours are meaningful. And when someone trumpets talk about "best practices," ask if anyone has experienced success doing it any differently.

In the end, all we know for sure is that effective marketing measurement takes courage, sweat, and persistence to break down organisational, political, and cultural obstacles. The insights you derive from it cannot easily be bought, only earned.

Article courtesy http://publications.mediapost.com/