Monday, February 27, 2006

7 Organizational Obstacles to Marketing Measurement

Effective marketing measurement on a strategic (vs. tactical) level is undermined by seven common organizational mistakes. See which ones pertain to you.

  1. Setting performance metrics beyond the span of control: Keeping everyone’s eye on the bottom line is good. Linking too much of their bonus or merit consideration to key performance indicators based on financial outcomes too far removed from marketing influence, isn’t. It often results in a demoralized marketing team that is resentful of other functional departments and less likely to seek input or build consensus when it comes to strategy development, program execution, or measurement.

  2. Letting the metrics become the objectives: One of the big automotive components suppliers challenged its team to build a car-door hinge system that was significantly more smooth and quiet than the current approach. They succeeded. But, the cost per door tripled. If you’ve hired smart people, be careful how you state their objectives. They will find a way to achieve them.
  3. Impeding the flow of bad news: Metrics in marketing won’t work unless they promote objectivity — which means accepting the bad with the good. Equating reward solely with success sends the clear signal that being the messenger is a good way to get shot unless all the news is good. Find subtle ways to reward truth along with success, and link the two together in the minds of your team.

  4. Delegating measurement strategy: In selecting the right marketing metrics, the decision maker has to have not only a big-picture perspective, but the clout to negotiate marketing’s new science with the rest of the organization. Mid-level managers can’t do this. Only a person at the top can assess how much change marketing can take in one step and in which direction the group must move. Plus, when measurement strategy is delegated, truth and insight often take a back seat to rationalization and justification. Measurement requires leadership that ensures that every person in the organization is focused on being creative, being supportive, taking initiative, and performing as a team player. Appointing a trusted staff member to be the chief of the measurement police is a sure way to cut them out of the informal communications channels where the real information is shared. You may decide to have someone coordinate the process, but the actual measurement (and results) should be owned by a broad group of marketing leaders, chief among them the CMO.

  5. Allowing IT to control the agenda: In an increasingly data-driven marketing era, IT is responsible for collecting and storing data, mining customer transaction files, and sending and receiving messages in record time. Consequently the path to progress in marketing measurement is often dependent upon the same time- and resource-starved IT people who support all the other mission-critical company functions. But the prioritization of those IT resources is most often made with an eye toward fixing holes in cash-flow management or operations support, not marketing process improvement. Consequently, marketing must be prepared to present its case by simultaneously forecasting the business value of the proposed changes and the cost of outsourcing the work. In larger marketing organizations, it often makes sense to have an IT liaison on the marketing team whose responsibility includes the mid- and long-range planning of company IT capabilities to support marketing evolution and to translate the inevitable “we can’t do that” IT response into creative solutions for progress.

  6. Neglecting to give researchers and analysts respect: When was the last time you met a CMO who rose up through research? Researchers and analysts typically live at the lower end of the marketing pay scales and often have no career path. They need to act as thought leaders within the organization, leveraging the thought and data models they build in marketing and in all of the business functions it touches. When researchers rise as thought leaders, they encourage the use of facts and data to make smart decisions. So the smart CMO will see that these people get the training in communications skills and leadership development to expose their talents more broadly and spread that discipline within the department. It’s time to rethink the role of research and decision analytics in our marketing structures, not just expand on the same old models.

  7. Forgetting about training in measurement: And we wonder why we hear so much complaining about skill shortages. Survey after survey on improving marketing measurement cites the No. 1 CMO need as “getting the right skills in place.” But by our observation, fewer than one in 10 mid-to-large-sized marketing departments have comprehensive skill-building programs.
Each and every one of these common symptoms is sufficient to block progress in achieving measurement synthesis horizontally across the marketing organization. Only when we start breaking down these barriers will we begin to see the “big picture” of marketing performance in the context of the whole company’s continuous improvement plan.

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