Ever get the feeling marketing efforts generate value that’s not being accounted for?
The primary reason this happens is lack of a unified, stable approach to success measurement. If the context of measurement keeps changing for each campaign and channel, chunks of value do indeed get dropped out of the measurement model.
If you’d like to get full credit for all the value created from marketing efforts, consider measuring outcomes using incremental value creation as your primary success metric – which activity would not have happened unless we executed this marketing effort?
And where possible (more often than you think), use customer value as primary KPI.
Why focus on the idea of incremental value creation? For one thing, the method used is the accepted scientific standard for evaluating human behavior. Also:
- Intangible and often previously unmeasured effects actually get measured, perhaps for the first time. This can lead to some stunning returns on marketing spend
- Results are typically clear and easy to understand – C-Level types “get it” because the measurement approach and standards mimic models often used in Finance
- Speaking of Finance, when a campaign or program increases the value of a customer, there’s little doubt about the contribution to company profit
Besides, given the focus on customer journey and experience in the marketing world, it just makes sense to align marketing measurement with customer behavior, doesn’t it?
How is this done? The fastest, least expensive, most productive approach is to:
- Set up a simple measurement framework for evaluating incremental value creation
- Review and weight success of current marketing efforts relative to this framework
- Create new / adjust current marketing efforts to increase net customer value
People are often surprised how dramatic the impact of product, service, and operational issues can be on the value created by marketing efforts. To see these effects, marketing success must be measured using incremental customer value metrics like “lift”. Response and conversion are just the beginning of a value creation story; incremental value analysis approaches like Control Groups tie marketing efforts directly to the bottom line.
If you want to really understand attribution, optimize marketing as a whole rather than by each silo in isolation (inefficient), or put hard financial numbers behind the success of any customer-centric initiatives, measure the creation of incremental customer value.
My specialty is ecommerce / retail, where often the best solution not only addresses “marketing” but also directly involves operational issues discovered during the analysis of customer value creation and sources. If you have a business process improvement (BPI) team, they’ll be very interested in learning about these new sources of “defects“.
Please consider joining Listrak, Pfizer, Ingram Industries Inc., Silver Dollar City, The Oriental Institute, Morrison Homes, Ontain, MBNA, Barnes and Noble, Verizon, CBS Sportsline, Tupperware and a host of smaller companies and nonprofits who have successfully turned their customer and operating data into successful ideas and programs.
What Exactly is it You Do, Jim?
How many Marketing people do you know with extensive Analytical awareness? How many Analysts do you know with extensive Marketing experience? For 25+ years I have acted in both roles with hundreds of data sets over dozens of business models.
When you get right down to it, where I can help most Marketing or Analytical folks boils down to one thing: since I speak both the languages of marketing and analytics, I can teach both sides how to move more quickly and confidently to the next level – optimizing by lift in customer value. So let’s teach your marketing and analytical people how to:
- Look at existing campaigns and analysis through the lens of customer behavior
- Identify the drivers of incremental behavior and customer value creation – often, different from the drivers of “response” and “conversion” for specific segments
- Create a new package of campaigns and testing designed to drive incremental value by tailoring copy, offer, and timing parameters to specific customer journey metrics
- Take past knowledge and multiply the value of it with input from customer analysis
If you’d like to start measuring marketing & service success using methods and financial metrics your C-Level will be completely on board with from the start, let’s chat.