Marketing is experiencing unprecedented change. From Social networking to Customer Relationship Management (CRM) and Marketing Performance Management (MPM). How it responds to the challenges of the digital age on the one hand and the calls from the C-Suite for accountability on the other, may be a defining moment in its quest to be regarded seriously as an investment and not just a cost of sale.
Is it time for Marketing to subject itself to the kind of scrutiny that other functional disciplines have faced for decades and begin to recognise its need to show a legitimate ROI?
Marketing ROI Not Just Tactics
If Marketing is the ‘voice of the customer’ then it must show that it can truly align marketing tactics to the strategic imperatives of turning customer demand into profit. In high-tech, marketing continually competes for attention with R&D – who make the products – and Sales – who sell them. R&D know that they need to ‘package’ ‘price’ and ‘promote’ their products (marketing tactics). Sales like trade shows, sales aids and the web site – the ‘shop windows’ of their trade.
But these are just the costs of ‘doing business’ – no one is really clear, in my experience, what the true ROI of Marketing is: how to measure it; how much to spend; whether PPC is ‘better’ than Twitter etc. The smoke-and-mirrors of marketing will remain that way unless Marketing itself shines some light (excuse the mixed metaphors) on what we do.
Marketing Metrics Drive Accountability
When the annual budget round comes along, Marketing needs to have a case to present to the CFO that demonstrates why the budget should not be cut; or, indeed, why it should be increased, for example, from 6% to 8% of revenue.
Metrics need to be established for demand generation tht are tracked through to sales revenue using marketing automation/CRM systems such as Eloqua and Salesforce,com. Metrics for intangibles, such as brand awareness and brand value are harder to establish, but again need to be agreed and reported against. These metrics should be part of the CMO’s dashboard.
Is Marketing ready to stand up and be counted? The digital age presents the opportunity – we need to seize it.