More than ever, large companies are focused on cutting costs and measuring performance. At the same time, Chief Marketing Officers (CMOs) are struggling to adopt best marketing campaign management (MCM) principles. This topic is the focus of a new book Data-Driven Marketing – the 15 Metrics Everyone in Marketing Should Know by, Mark Jeffery, senior lecturer of technology at the Kellogg School, Northwestern University.
Jeffery’s research shows that “four out of five senior marketing executives have not adopted best-practice marketing campaign management.” For the most part, Jeffery had studied companies with an average marketing budget of $400 million. At these companies, senior managers are not using business cases or return on investment (ROI) metrics to make funding decisions. Here’s why these businesses are not adopting strict measures to use in making funding decisions:
- Senior managers use instinct and ‘gut feel’: 63%
- Lack employees to track and analyze data: 64%
- Organization lacks knowledge on topics such as ROI, net present value (NPV) and customer lifetime value (CLTV): 50%
Jeffery classifies the steps necessary to achieve effective MCM as follows:
- Defined: The organization establishes processes and procedures to achieve stated goals
- Intermediate: The organization is centralizing marketing resources and developing specific metrics for measuring investments and outcomes
- Advanced: The organization is tracking and monitoring investments and results and then acting on the data as it becomes available.
It should come as little surprise that achieving the advanced level of MCM “provides real results to a firm's bottom line," said Jeffery. As more companies tighten the funds flow, look for marketing departments to invest in better ways to measure outcome.[Source: Kellogg School Study Finds CMOs Still Struggling to Make Marketing Campaigns and ROI Transparent. Kellogg School of Management at Northwestern University. 2 March 2010. Web. 11. March 2010]