Ted Levitt is the author of The Marketing Imagination. He writes: “The role of marketing is to create and keep customers.” A Marketing Plan can be a useful tool in helping Marketing plan its strategy for acquiring and keeping customers.
You are probably tackling your marketing plan and Budget now that the fall has arrived. Marketing organizations are under increasing pressure to justify spending, demonstrate the value of their programs, and prove their contribution to their organization.
Forbes Insights conducted a study in the summer of this year that found that measuring marketing efforts is “not going away” and that “proving how budgets are spent remains a high priority.”
In the current economic environment, it’s important to make each investment count. Alignment and accountability are interdependent. It’s impossible without alignment between Marketing, the business, and other departments to measure the value Marketing brings to the organization or to focus on the metrics that will help the organization reach its goals.
Budgeting becomes a guessing game without the ability to demonstrate value because there is no connection between the expenditures and the desired results.
A study conducted by The CMO Survey this past summer with over 4,000 top-level marketers found that the marketing budget is expected to rise, but only if Marketing can measure its impact.
A customer-centric marketing plan based on metrics is the first step that every marketing organization should take, regardless of the sophistication of their data systems and measurement tools.
A plan like this is the basis for better marketing accountability. It will give you guidance on how to evaluate the effectiveness and value of Marketing.
You can secure your marketing budget by following these three steps to ensure that you are aligned properly with your organization.
- Ensure that your business objectives are clearly defined.
- Establish outcome-based marketing objectives.
- Create performance-based programs
Secure-defined business outcomes.
To help Marketing succeed, you should ensure that you align yourself with the business goals of your organization.
To be successful, an organization must have clearly defined business results. Quantifying business outcomes will help you understand what changes are needed. Since marketing doesn’t target revenue buckets, marketing organizations that work with a revenue goal are blind to the business outcomes.
As you work with your leadership team, ensure that you collect the following information.
- How many customer deals does your organization need?
- How many of these deals will be from existing customers purchasing current products?
- How many of these deals will be generated by existing customers purchasing new products?
- Where are these new customers located, and how many deals will they bring in? Do we continue to do business in the same geographies and verticals? In new verticals or geographies?
You should clarify the marketing’s role in achieving the business goals and the way that Marketing will be evaluated.
Remember that business outcomes will be the way the organization measures success at the end time horizon. These are quantifiable and specific, such as:
- WIDGET X will be adopted by X% (of Tier 1) of current customers, resulting in revenue of $.
- Increase market share by Y% by acquiring X new net customers in the ABC segment.
- The marketing department is expected to play a 100% role in the adoption of WIDGET by Tier 1 customers.
- Marketing will contribute 100 % of net new customer-qualified opportunities in the ABC segment.
Establish outcome-based marketing objectives.
Each marketing objective should be directly related to one or more of the business objectives.
Measurable Marketing Objectives articulate how marketing will help the company achieve its business goals. The goals should be time-bound and quantifiable.
As an example:
- By the end of 2Q, ABC products will be preferred by top share-determiners in the XYZ market from A to B.
- You will need to generate X qualified leads in six months from the launch of your product at $Y per lead.
Measurable marketing objectives that are based on outcomes facilitate the development of metrics. This example illustrates the share of preference, qualified lead, and cost/lead metrics.
Your objectives should reflect Marketing’s core responsibilities, which are to find, retain, and grow the value of your customers. These responsibilities are directly related to what organizations want to achieve as a result of revenue and sales. They include increased market share and customer lifetime value.
After you have defined your objectives, get the agreement of the leadership team on the fact that achieving these objectives is a success. This agreement must be obtained before you can move on to the program and strategic development elements of your plan. You may have to do a lot of work if you don’t get the agreement.
Create performance-based programs
Forbes Insights conducted a study that suggests marketers should determine the success of their marketing programs before implementing them and then evaluate performance against these targets.
This exercise is about setting program performance targets. Setting performance targets can be a challenge for marketers.
The days of listing something generic, like advertising or public relations, are long gone. The days of using output-based goals, such as an email campaign per month to prospects or a webinar each month, are also long gone.
Marketers must now set outcomes-based goals for their programs. Instead of setting a monthly performance goal of hosting one webinar, a result-based target could be to generate a certain number of Stage 1 telephone appointments.
What is a performance target, and what does it entail to set one?
A performance target can be thought of as a stake in the ground that shows what the program must achieve to be considered successful. The measures and targets selected must be relevant to both the objectives and outcomes.
Performance targets are valuable because they can help improve performance, provide focus, allow course adjustments, and measure effectiveness.
When setting performance targets for programs, baseline data can be very useful. The past performance of a program does not necessarily predict its future performance. However, knowing what was achieved, how much it cost, and when it happened can be helpful information.
Clarify what success is before you can set a performance target. The more success can be defined behaviorally, the better.
Set a numerical performance range once you have identified the behavior that you wish to motivate (e.g., instead of setting a target of X, consider using a range such as X-Y). The program must be credited for the behavior or action.