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The Marketing Centre’s Robert Stead on managing marketing performance


 
We asked The Marketing Centre’s Robert Stead what marketing management means, why it matters, and the simple steps B2B businesses can take to add rigour to their sales and marketing processes.

The Marketing Centre: Hi Robert. We’re talking about managing marketing performance; perhaps we should start off by defining exactly what we mean by managing marketing performance.  Can you enlighten us?

Robert Stead: I’ll try! The CIM – the Chartered Institute of Marketing – defines marketing as ‘a management process responsible for identifying, anticipating and satisfying customer requirements profitably.’

What I take from that, is it’s management, and it’s a process, and clearly you’re going to measure that management process; you’re going to measure your marketing to see how well you’re doing.

Frankly, if you can’t measure it then you can’t make it any better, and if you can’t make it any better why would you do it?

TMC: Exactly. So why would a business not manage its marketing performance? Surely any company worth its salt is tracking KPIs and such like?

RS: Well, sort of yes and sort of no. I think there’s a view still that marketing must be right because everybody does it: everybody has a website, everybody produces brochures, makes the phone calls – there’s almost a herd instinct at times to say, ‘Well, we’ll do this.‘  

I mean, one of the most common advertising sales pitches that I get, even now, is, ‘You should do this because all your competitors are,’ never, ‘You should do this because it works.’ And I think whether it works is an essential part of it.

That said, sales is really easy to measure: you take orders, you add up the orders you receive. Marketing isn’t so easy to measure, and I think sometimes the reason people don’t measure it in the right way, or thoroughly, is because it can be quite complicated to do. There’s more to it than just adding up how many orders you got last month or how many new customers you signed.

TMC: Can you give us an example of what good marketing performance management would look like?

RS: Yeah, I think there are several different threads. The starting point, which sounds obvious but is commonly missed, is you have to decide what it is that you want to achieve with your marketing, because until you understand what you’re trying to achieve it’s very difficult to measure whether you actually got there. And I think that has to be measured in the context of the whole business.  

So, for example, it might be the number of new customers you acquire; it quite likely would be the cost per new customer you acquire. Sometimes you would look at the amount you’d spent on existing customers and how much revenue was gained as a result of that.  

Very commonly you’d look at the cost per new lead, for example. And as an overall measure – which I always find quite useful – which I call measuring the marketing cost envelope i.e., how much investment is made in marketing activities and marketing people as a proportion of your overall sales revenue. There are lots of different ways of doing it but you have to start by understanding what you’re trying to achieve.

TMC: In terms of advice for business owners looking to get a handle on their marketing, the start, then, is to plan?

RS: Yes: to start with the plan and what you’re trying to achieve. And marketing people can be very good at providing lots of details about activity but not so many details of achievement.  

What do I mean by that? “We have a website, people like it, it’s great”. That’s a measure of activity.  

“We have a website, we got 500 new visitors, three of them bought something”: that’s a measure of achievement. So, what we need to be focusing on is what the marketing achieves. And it’s always good to focus on two or three key things.  

Don’t get buried under statistics. Consider a website, for example. How many people visited it? How many of the people who visited it then ordered something? Two very different statistics, very easy to track.

TMC: But often – I’m thinking particularly for B2B companies that don’t have any commerce function, or ones with a long sales cycle – the weighting doesn’t seem so simple. 1500 people might visit a website in a week, with a few downloading a resource and a few contacting the business. But then the sales cycle runs on for another six months after that. How do you square that off?

RS: What you do there is you look at the process, and you measure at each step in the process. So a typical B2B cycle would be: I don’t know you, I know you, I know something about you, I’m interested in what you do, I’d like to talk to you, I’ve bought from you, and then I buy from you again. And the measurement you’d make at each point in that process, from I don’t know you to I know you,– is how many people have visited the website, and how visible your brand is, for example.  

Further along from this point – at I’d like to talk to you – that’s where the how many responses you get to your marketing activity and then how many sales conversation begins; that’s how many leads you produce. So you just pick the measurement to match the point in the cycle and then you could look at the rates of conversion between visitors to interests, to conversations, to leads, to sales and you can see how efficient your processes are in marketing because you’re moving people down that funnel.

TMC: Great. One final question. How often should a business be reviewing their performance?  Is this a weekly activity, a monthly activity, quarterly? What’s right, what’s relevant?

RS: I think it runs at two levels. I always produce a simple weekly summary of what’s gone on. That keeps people focused on what’s happening, keeps the marketing team focused on what they’re delivering, and it provides a track.  

Underneath that, what generally happens is that things will go well or things won’t. If that simple metric says things are going well, you dig to find out what works particularly well and do more of that. If it says things aren’t working so well, you dig underneath it again in a bit more detail and then change things around to manage it. So on a weekly basis I’d take key metrics – literally just two or three – and then when things needed adjusting or when planning needed repeating I’d take a much more detailed look at it, not to understand what the results were as much as why they were what they were, and what then needs to be done about it.

Robert Stead belongs to The Marketing Centre’s team of part-time marketing directors, working with clients across London, the South East and Thames Valley. For information on how Robert and directors like him work, get in touch.