Quantifiable marketing measurements can be a double edged sword
I think that everyone will agree that marketing is most effective when it is fully connected and integrated with every aspect of a company’s behavior in the marketplace. For example – marketing cannot succeed if it is disconnected from customer service, nor can it achieve its goals if it is disconnected from sales, or from product development, etc.
So, not only do we need to break down the silos that exist within marketing departments – but if we really want to ensure success – we also need to break down those silos that exist between marketing and the rest of the company’s operations.
While counter-intuitive at first, the increasing trend for companies to hold marketing departments accountable for ROI’s and other quantitative program measurements can potentially have very negative effects – not only on marketing integration, but on its overall potential for success.
When people are made accountable for programs that can be measured, two things tend happen. First they will dump or under-fund projects that cannot easily be measured – the “soft stuff”. Second, and based on our predominantly western “atomic” worldview – causing us to always want to break down processes into their tiniest core elements – most people will split up marketing into the smallest subsets that can still be measured and goaled – thus creating worse silos than we used to have in the first place.
The problem with dumping or under-funding the soft stuff is twofold. First off, some of those activities are actually real high value activities or even “must have” activities, even though they are hard to measure. Think of reaching the influentials, or the connectors in your markets, and other thought leadership programs. If you do it right they will not only form a social network system that will serve as an amplifier for any good message in your marketplace, they will also serve as a dampening system for negative messages that invariably will emerge from time to time. That is invaluable – yet most companies will only pay lip service to thought leadership – as it cannot be measured. The second problem with under-funding the soft stuff is that you risk killing off all innovations and the much needed continuous learning that you should be expecting from your marketing department.
The second side effect of relying too hard on quantifiable measurements in marketing – that of increasing silos – is easily proven by looking at some recently announced marketing conference programs. Take for example the upcoming conference on marketing from the IIR – it has 7 tracks! And if you’ve been in the trenches, you have probably experienced the silo madness firsthand.
So all in all – and while there is no question in my mind that marketing should be held accountable with quantifiable goals – I also think that companies that rely too much on quantitative measurements for their marketing programs – and especially those that are too granular in their measurement – are potentially doing themselves a disservice.
Marketing has to include the “soft stuff” and it cannot be siloed. It needs to be fully integrated with all market-related business processes!
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January 3rd, 2006 at 9:56 am
I don’t know much about how ROI is traditionally measured, but it seems to me that everything can be measured at some level, and from those data, ROI can at least be estimated. For example, you can count the number of “influentials” who you contact, you can measure their responses, and you can estimate the effects of those responses, no?
Got any good examples of high-value activities where these estimates would really be meaningless?
January 3rd, 2006 at 10:29 am
Hi David - thanks for the comment.
You are right - everything can be measured. The problem is that if you measure something on a level that is too granular, you may be meeting your goals while your company goes down the tubes.
Take customer support for example. A set of metrics could be length of time that a customer is on hold (as an indication for customer satisfaction) and length of support call (as a measurement for cost containment). The service department could do real well on both those metrics and still deliver bad customer support - leaving the customer to buy from someone else the next time around.
The same could be said in marketing. Events people are routinely responsible for # leads coming from an event, and email marketers are measured on email open rates. The real important measurement is how all these programs build upon one another to create better results than they would by themselves. That gets lost when you break them apart like that. And the results that people get often give them a false sense of success.
And then of course there are the innovative new programs. If they are new, then by definition you really do not know how to measure them. And in most companies, if you cannot justify something on measurements, you will not get it budgeted. So in effect you are killing innovation and the learning that goes with it.
In terms of reaching the influentials and building a social network system that can help with everything you do - I am not sure how you can measure that. How many people do you need in the network in order to make a difference? How do you know you actually reached a real “connector” and not a self-promoter? A lot of companies are struggling with this and even in very large innovative companies that I have recently worked with you will find the influential marketing person budget-less - left to beg borrow and steal from other marketing sub-departments.