• October 1, 2009
  • By Jessica Tsai, Assistant Editor, CRM magazine

Required Reading: Measuring Your Marketing

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For the rest of the October 2009 issue of CRM magazine please click here.

Marketers have always had it a little tougher: They’re dealing with consumers who are tuning them out on one end and executives threatening to pull the plug at the other end. The only way to be taken seriously these days is for marketers to bring something to the table that can’t be refuted—metrics. Of course, doing so is never quite as easy as it sounds. (See “Mistaken Metrics,” page 30, for a look at the current state of measurement in the CRM industry; also see columnist Lior Arussy’s Customer Centricity piece, “You Are What You Measure,” page 12.) 

In his book, The Marketing Performance Measurement Toolkit, David Raab, principal at consultancy Raab Associates, examines the varying approaches to help marketers identify what “success” means to them and their organization. Associate Editor Jessica Tsai had the opportunity to speak to Raab about how measurement complexity doesn’t mean impossibility.

CRM magazine: Does trouble typically begin when marketers fail to articulate a business plan before diving in?

David Raab: That’s a huge mistake that people make. Somebody says, “I gotta get me some of that marketing measurement stuff,” and they really don’t know what they need except what they read [in] an article somewhere. 

It’s a very common mistake to just jump right in and do one of two things: One, measure what’s convenient to measure because the data’s available; or, two, look at what everybody else is measuring, or what’s being talked about in the industry, because it’s the best practice. It might be the best practice, but may not be the best practice that’s appropriate for your business. 

There’s no shortcut to understanding what your situation is, and what your objectives are.

CRM: You attribute failures in part to a lack of education. How do you propose marketers get smarter? 

Raab: The challenge is that things are changing so quickly in this industry. What you learned in school even five years ago has very limited relevance. It’s much more important that people know how to ask their own questions, understand their own business, and figure out what’s right for them today, rather than going to any external source of standard metrics.

The reality is there are certain kinds of broad purposes of a marketing project—justify marketing investment, demonstrate strategic alignment, and measure marketing execution. You have to figure out which kind of project [you want] and each of those implies a certain set of metrics. Even without too much experience, you can work your way down [the list in this book] and given what you’re trying to accomplish, figure out the measures and metrics that are relevant.

CRM: Industry reports seem to indicate that marketers are beginning to demand a more strategic role in the overall organization. Are you seeing a similar trend? 

Raab: There’s a greater realization that their role is important and there’s greater willingness on the marketers’ part, particularly using metrics, to say, “This is what we contribute strategically to the company.” There’s long been a great deal of resistance to marketers being measured. They wanted to be left alone to do their own thing, which is a natural thing to want and professionally you don’t want to be second guessed, but you have to justify that to senior management. Marketers are recognizing that [they] can quantify [their] contribution. It might not be as simple as some of the financial guys would like it to be but it’s certainly doable. In that sense, they’re more prominent as a strategic participant in the company.

CRM: Given the challenges in measurement, is marketing perpetually burdened by uncertainty? 

Raab: It is harder in marketing. If I run a factory, I know that if I change the dial on this machine, [this is] what the outcome is going to be—I can measure it very precisely. 

If I dial my marketing spend up 10 percent, it’s not too clear what’s going to happen. There are all kinds of more difficult-to-measure, subtle effects that are, in many cases, the primary effect of marketing. 

The whole issue of brand marketing—how much is brand marketing worth?—is extremely difficult to measure but we all know it’s worth something.

There’s more of a realization that you do have to tie the marketing to the end result—the marketers really do need to understand the whole downstream impact of what they do. 

It’s a very complex set of interrelated activities; but just because it’s complex, there’s no reason you have to throw up your hands and say, “Oh, I can’t measure it.” It just means maybe you have to work a little harder—maybe a lot harder.

CRM: Will digital media make marketing more measurable now?

Raab: Digital marketing is highly measurable in the mechanical sense. But understanding the final business value is equally as tricky in the digital [arena] as it’s always been in other kinds of marketing.

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