Measuring Sales and Marketing Performance
If You Can’t Measure It…
“If you can’t measure it, you can’t manage it.” We’ve all heard the adage. But that doesn’t mean it’s easy to measure—not to mention manage—sales and marketing performance.
Sales measurements are fairly straightforward. The numbers are generally accessible in financial systems. There may be some squabbles over credit—who gets the commission? And reporting of sales aggregated through channel partners can make it hard to assess performance in individual accounts. But other than that, managers have little trouble tracking sales results.
But what about marketing? There’s the rub. Marketing performance measures are fuzzier. Are we talking about market share? About brand equity? Purchase intent? Sales lead generation? Whatever the objective, it can be tough reporting results with accuracy. Worse, it’s often impossible to tie results directly to marketing investments.
Fortunately, the subject of marketing performance measurement has now taken center stage, and much brain power is being dedicated to solving for the fuzz. In April, the research company IDC mounted a conference on this subject as it pertains to business-tobusiness markets. A number of useful ideas emerged from the podium, among them:
Keep it simple, and relevant. The IDC conference chair, Richard Vancil, advised us to fight the tendency toward complexity in measurements. The larger you are, the simpler your performance measures should be. Also, select metrics specific to your business situation. Yahoo, for example, no longer tracks awareness metrics for its brand. Everyone knows the brand by now. So these days Yahoo has upgraded its tracking to a metric about “brand energy,” to assess the essential hipness, or attractiveness, of the brand.
Monitor your pipeline. Every B-to-B marketer is on the hook to provide sales leads. But it’s not just the quantity and quality of the leads distributed to sales. You need to keep an eye on the entire marketing pipeline. Gottfried Sehringer, VP of marketing at Softrax, instituted such a management system, and learned some surprising facts: 43% of his campaign responses comprised duplicate contacts within target accounts, and only 2.5% of gross campaign responses were converting to qualified leads ready for the sales team. With metrics like these in hand, Sehringer is able to explain, daily, to everyone in the company, what to expect from the marketing.
Try proxy metrics. Robert Reneau of National Semiconductor shared a fascinating technique that his team uses to speed up campaign results analysis in the face of long sales cycles. Reneau assigns an estimated dollar value to each interim campaign outcome, long before the activity has resulted in a sale. When a customer downloads a piece of collateral, for example, they credit the campaign with $1,000. A product sample request? That’s $5,000. A lead entered into the sales force automation system earns $50,000. These numbers may seem arbitrary, but over time, National has found them to correlate with actual sales results. For managers, the proxy metrics allow early comparison of campaign productivity by product or by business unit, and mid-course corrections where needed.
Budget for it. If your most important metrics include anything other than sales leads, you will need to spend money to gather the data. Don’t skimp. Valerie Mason Cunningham, VP of corporate marketing services at Xerox, said she spends 50% of her resources on tracking such otherwise fuzzy marketing investments as sponsorships and “brand esteem” among her target audience segments.