The Marketing Performance Index– Part 3
One of the most important objectives for any CMO is to achieve consensus on how you will be measured. That’s a key reason I created the Marketing Performance IndexTM – an objective framework to prove the value of marketing. As I have shared in my previous blogs, the Index is a method for quantifying the impact of Marketing. It tracks 24 key metrics for assessing a company’s relative brand, demand and market strength, and provides a standardized marketing effectiveness score. This framework also serves to better integrate program efforts, helps connect brand to demand, and measures ongoing performance throughout the buyer’s journey and customer’s lifetime.
I was recently a guest on the Rockstar CMO podcast with former colleagues and co-hosts Ian Truscott and Jeff Clark. We discussed how Marketing leaders can establish baseline metrics to track and demonstrate the value marketing delivers and the ROI of marketing. A few highlights follow:
Ian: You’ve defined 3 measurement components (market presence, brand strength and pipeline health), 6 key performance indicators, and 4 metrics for each, for a total of 24 KPIs. Let’s dig into Market Presence. The performance indicators are Reach and Share. Tell us about that.
Grant: Reach consists of physical and virtual/digital market presence, including the Web, and Share is primarily comparative metrics vs. your designated competitors.
Jeff: When you’re doing your SWOT analysis vs. competitors, these are key metrics to understand both what you’re up against and what levers you can use to expand your presence, i.e., punch above your weight.
Ian Let’s move on to Brand Strength. The performance indicators are Engagement and Loyalty. What should marketers aim for there?
Grant: We all operate in crowded markets that compete for mind share and if fewer people are engaging with your communications and programs, you will fare a lot worse than companies that garner relatively high engagement, whether in digital or physical spaces. Loyalty is a tried and true predictive indicator of company health, and NPS and CSAT scores are standardized measures that have been around for decades.
Jeff: You want to move buyers to brand preference, and these are all leading indicators that you’re moving in the right direction (or not). You’re either gaining or losing momentum, or at times, standing still.
Ian: Final measurement, and this is music to ears of our chums in Sales who would probably prefer us to focus on this one first – Pipeline Health – your performance indicators for this one are Pipeline and Progression. The interesting thing about this is it’s a bit out of our control, why is this important for marketers to measure?
Grant: I spoke to a few CMO’s who argued that the Marketing Performance Index should not include Sales efficiency metrics. My experience has taught me that you need to hold Sales accountable as they hold you accountable. It’s quid pro quo. If Sales is not converting leads, progressing and closing deals within industry standards benchmarks and agreed upon SLA’s, you are going to have a very hard time making marketing contribution targets. The answer isn’t I need more pipeline, the answer is, we are one team working together and we both need to deliver results.
Jeff: What I’d add is that marketing, particularly product or solution teams, are the best able to provide the content that enables Sales to be more effective. So, we need to have skin in the sales productivity game.
Ian: Finally, we can’t let you go without referring to you chucking attribution into the Rockstar CMO swimming pool – our portal to marketing hell for all the snake oil, bullshit, and over-hyped trends of this wonderful industry of ours – you said we should think differently and spend less time trying to be precise with attribution, but think ‘contribution’. Which is something I’ve riffed off, with full attribution, do you still stick to that or would you nominate something new?
Grant: If I were to add a new one, it would be: Program or Tactic ROI. It’s crazy to expect to measure and report on the program ROI for every tactic and dollar spent. I know that all interactions with prospects shape purchase intent and brand preference, from emails, to Webinars, to G2 review sites, to in-person events to the entire self-driven Web experience itself. If I can deliver a 5-15x return on the overall spend, let me manage the marketing mix and orchestrate which tactics, vehicles and touch points fully optimize my budget, create pipeline, nurture opportunities, and lead to closed-won business.
You can listen the full podcast and many more scintillating shows here: https://rockstarcmo.com/podcast/
In upcoming blogs, I’ll delve more in the range of scores reported by the Index, what good looks like, how to structure your measurement systems to accommodate for variances in company size (e.g. $10 million vs. $100 million or more) growth strategy (typical SaaS vs. PLG), industry, market (fast-moving SMB/transactional markets vs. enterprise markets), and strategies and tactics to improve all metrics, etc. In the meantime, please share your comments here or directly with me. If you’d like to take the online MPI assessment while I’m developing the self-serve Web version, send me a note and I’d be happy to arrange.
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