Documenting the value of marketing is no simple task. So how can you measure it to increase and improve your marketing performance?

Marketing’s impact can be difficult to isolate from that of other organizations within the firm (e.g., sales and delivery), and results are often intangible and long term. External factors, including competitive initiatives, industry trends, and economic changes, are also extremely important.

Despite the difficulties, recent research from ITSMA shows that companies that measure marketing's impact receive more support from top executives and better allocation of marketing resources. Marketing dashboards, therefore, can be powerful tools to help business and marketing leaders see what's working and where best to invest their marketing dollars.

But, as our work with several leading IT companies demonstrates, a dashboard is only as good as the metrics that support it. Marketers must strive to create a value measurement system that provides compelling, easy-to-understand data that validates the benefits of marketing investment.

Choosing the Metrics

Choosing the most appropriate activities to measure is one of the most difficult aspects of the design process. ITSMA is a strong advocate of a balanced-scorecard approach to measurement (Figure 1). Utilizing all four dimensions of the balanced scorecard—financial, customer, learning and growth, and internal business processes—ensures that a value measurement system pays adequate attention to both past performance and the underlying dynamics that will drive future performance.

Figure 1. A Balanced Scorecard for Services Marketing: Sample Metrics

Source: ITSMA, 2006 (click here for larger graphic)

Determining the right set of metrics, one that is strategically relevant, clearly defined, and concretely measurable, will likely take time. When we worked with Unisys to design, develop, and implement a marketing dashboard, for example, determining what to measure—and how to display that information—took a full six months. But the process of building agreement on those metrics is itself valuable in getting everyone to understand what is truly critical to business success and what is necessary to ensure a credible measurement system for the longer term.

Creating a Weighted Index for Marketing Performance

A core goal of the dashboard is producing a simple score or index to evaluate marketing performance. The most basic assessment for executives is thus checking the score and comparing it to previous scores, probably on a monthly or quarterly basis. If last month’s score was a 75 out of a possible 100, you’ve got a good idea of what to shoot for this month.

But not all goals are created equal. Once you’ve selected the primary goals, it’s time to zero in on their relative values.

For example, a very simple system might focus on four goals: increasing revenue by 10%, increasing brand value in a target market by 20%, increasing client satisfaction by 30%, and increasing staff skills by 40%. Are all these goals equally important? You might decide instead that revenue growth is clearly the most important of the four and assign it a weight equal to 40% of the total score. Increasing client satisfaction might be worth only 20%.

Once you’ve selected and weighted the goals, you need to identify the key objectives in each area, the activities required to achieve those objectives, and the best way to measure the activities.

Figure 2 shows how you can begin to construct a weighted index.

Figure 2. Elements of a Sample Value Measurement System

Source: ITSMA, 2006 (click here for larger graphic)

Developing the Dashboard

The dashboard itself is typically a browser-based tool that provides easy online access to most or all of the data generated by the value measurement system. Given the pace of business today, a dashboard that enables anytime, anywhere assessment of marketing performance can be extremely valuable in supporting faster and more effective decisions about the most productive strategies and tactics. The dashboard is thus designed to aggregate and structure the data to allow different audiences to view marketing performance in different ways, according to their needs and interests—ideally with real-time updates from the relevant sources of data.

In developing or purchasing a dashboard tool, pay attention to several features that will make the tool especially useful:

• Simple presentation of key marketing objectives
• Drill-down capabilities to multiple levels (e.g., goals, objectives, individual activities)
• Capability to generate custom reports
• Capability to support trend analysis
• Easy customization to support changes in plans, goals, and objectives
• Easy to update
• Integration with marketing data from other systems (e.g., CRM systems)

Given sufficient data integration, the dashboard can enable detailed, real-time review of performance against virtually all critical marketing goals and objectives.

Conclusion

A marketing dashboard can be a powerful tool for managing marketing performance, but only if it sits on top of a well-developed value measurement system.

Establishing a value measurement system should not be taken lightly. Doing it right takes time, money, and probably some organizational change. If done properly, though, the system will not only generate real insights into the value of marketing—it will also uncover substantial opportunities for enhancing future performance.

By Steve Hurley,
Vice President, Member Engagement, ITSMA

ITSMA specializes in helping companies market and sell technology services and solutions. Steve Hurley leads the company's member engagement team, which works directly with ITSMA member companies to provide focused advisory support on a wide range of marketing and sales challenges, including: go-to-market strategy; portfolio rationalization; account-based marketing; and relationship growth.