Tuesday, August 24, 2010

Achieving Simplicity in Measurement

So often I hear that a given approach to measuring the payback on marketing is “too complex”. It often gets voiced as. “This is too complex for our executives to understand. Can’t we just make it simple?”

The answer is YES. We can make it simpler. To do so, we need to start by recognizing that there are several types of “complexity” that need to be managed:

Over time, I’ve come to learn a few things that help in trying to manage these complexities:
  1. Simplicity is the destination, not the starting point. If the answers were simple, you would have found them already. The challenge is to sift through the complexity to identify the real insights - e.g., discovering brand drivers, identifying customer segments, etc. The path towards marketing measurement excellence requires working through complexity to arrive at the core set of appropriate measures, processes and frameworks.

  2. Complexity in measurement is a reflection of complexity in the business. The measurement plan just reflects the nature of the business, and should be on-par with the complexity management already deals with daily. The goal of the measurement plan is to establish a more structured framework for systematically eliminating complexity over time by isolating the most meaningful areas of focus. If you knew those already, you wouldn’t need to search for them through your metrics.

  3. Complexity is only a problem when introduced to the BROAD organization. The totality of the measurement plan and activity will be contained within a small group of people who already manage the current complexity. It is the responsibility of this core group to communicate comprehensiveness without adding any un-necessary complexity. Roll-out to the broader workforce will be the gradual and likely limited by function.

  4. Simplicity, if not thoughtfully pursued, can inhibit competitive differentiation. If the real competitive insights were are as obvious as picking up shells on the beach, everyone would have them. Try not to limit yourself to picking up the same shells as your competitors. Complexity is often a necessary part of meaningful innovation.
Specific to each type of complexity, there are some clear resolution strategies…

In the end, the goal of enhanced marketing measurement is to guide the organization to take bigger, smarter risks to achieve competitive advantage. Identifying and analyzing those risks is always complex. Your measurement approach needs to be based upon the processes, skills, and tools designed to make it SIMPLER in the future than it is today.
Pat LaPointe is Managing Partner at MarketingNPV – specialty advisors on measuring and improving the payback on marketing investments, and publishers of MarketingNPV Journal available online free at http://www.marketingnpv.com/.

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