March 29, 2021
by Raj Goswami, SVP, Marketing Sciences
The only constant is change. If you haven't learned that yet, you will soon enough. Knowing this endless cycle of change permeates all aspects of life, it's interesting when companies refuse to amend or update their tools, methodologies, and performance metrics for sustained success.
In the early days of marketing, where access to customer data and technologies was limited, tools such as target rating points (which helped measure audience reach) and Net Promoter Scores or brand trackers (to measure the brand's health in the eyes of the customer) were perfectly aligned to marketing goals of brand awareness, interest, and perception.
However, with the emergence of the internet, new media channels and identity resolution technologies, brands now have easy access to customer behavior and preference data that can be used to precisely target and deliver personalized, relevant messages to customers in an individualized way.
The Expansion of Marketing Metrics
These internet and social media revolutions have changed the approach for marketing. Whereas efforts used to be led with the brand or product first, they are now customer-centric. The role of marketing has officially moved into lower-funnel territories that were traditionally owned by sales or customer service teams. As such, marketing metrics have expanded to include KPIs such as conversion and retention, and measurement tool sets need to evolve accordingly.
New media channels also require marketers to expand their aperture to measure all brand exposures across offline and online (impressions/clicks) to compliment TRPs, as well as leverage tools such as social sentiment analysis to complement the traditional approach to NPS. Marketers need to expand their perspectives to a broader, more holistic view of measuring their efforts through the entire customer journey — across paid, owned, and earned channels — and measurement needs to be inclusive of awareness, interest, interactions, conversions, and retention, all leading to ROI and grounded in customer lifetime value.
While it may not always be simple depending on the industry, regulations, and customer data availability, brands should strive to utilize tools and methodologies that provide that perspective. Measurement techniques such as MMM (marketing mix modeling) to assess the value of investments across the entire marketing mix and MTA (multi-touch attribution) to assess the contribution of touchpoints in the customer journey have become the anchors for more holistic marketing measurement.
Therefore, CMOs of the future will need to be holistic strategists who can utilize qualitative and quantitative insights about their brands and customers to make decisions and drive business results. They will need to be both left- and right-brained. They will need to have broad skills and understanding of data and technology, as well as creative and media channels to be able to lead and provide guidance to a diverse team. CMOs should also be thought leaders within their peer group and change the conversation from marketing being a cost center to a profit and revenue center by showcasing the impact of marketing efforts to the bottom line of the business.
Future Focuses for Measuring Marketing Performance
Marketing leaders and their teams can begin to implement this shift in mindset and measurement by focusing on the following four elements:
1. Customer-centricity: Change your mentality from thinking brand-first to thinking customer-first. Spend time and resources understanding your audiences — their preferences, triggers, and behaviors — and work to develop messages and offers that target them in the right place and the right time.
2. Data- and insights-led strategy: Utilize customer and market insights to develop your brand positioning as well as go-to-market campaign strategies. Incorporate both qualitative and quantitative data to map the customer journey and assess opportunities for optimization across the funnel.
3. Team makeup: Ensure your teams have the breadth of skills and expertise across analytics (insights and marketing measurement), experience design (UX, art, copy), and campaign management (across paid, owned, and earned media) using marketing and data technology platforms for enablement.
4. Think like a CFO: Align brand measurement KPIs with the bottom line (customer lifetime value and profitability) to change the perception of marketing as a cost center to a profit center for the business. Measure the performance of campaigns and programs holistically across the entire customer journey (awareness, conversion, and retention) to assess their impact to business results and optimize accordingly.
CMOs need to accept and understand that their role in this new business environment cannot be limited to driving awareness and interest for their brands. They need to stretch themselves and their teams beyond positioning to understand the value of different customer segments, where to find them, and how to target them with the right message at the right time using data and technology.
Change is inevitable, so we must change the way we measure success and track performance. The evolution of marketing demands it.