By Eran Livneh
"Conviction is the luxury of those sitting on the sidelines."
This is what John Nash's imaginary boss said in the movie "A Beautiful Mind."
For those of us who choose to play rather than watch, Measurement is the compass
that guides us through our mistakes. What is your most important marketing tool?
I would argue that your spreadsheet application should be high at the top of the
list. In this day and age, running your marketing department without constant
attention to the numbers is simply irresponsible.
The starting point is clearly defining the goals. What is the market impact goal
of the specific activity? Is it the total number of leads? Number of qualified
leads? Closed deals? Is it brand awareness? All these goals have to be expressed
in quantified, measurable terms, or Measurable Market Impact.
Ignoring the numbers is not just irresponsible, it is also inexcusable. The great
thing about electronic marketing using e-mail and the web is that almost everything
can be tracked. Making smart use of these vehicles means that you design your
marketing campaign results to be measurable, using trackable links, source-specific
landing pages, and tracking codes. These are relatively simple to implement, so
we'll assume that you've got this part right (let us know if you need any help).
Still, there are plenty of examples where marketing departments don't manage their
activities by the numbers, for a variety of reasons. Let's examine some of these
more common reasons, and see how you can work around them.
Example #1: "our goal is to create brand awareness, but
measuring it is too expensive."
There is hard truth in this statement. Conducting market surveys to measure the
impact of specific marketing activities on brand awareness can be cost- prohibitive
for most small companies. What you can do is estimate the number of people exposed
to your marketing message by each marketing activity. It is not the best or most
accurate measurement, but it's still better than not measuring at all. Defining
the results in such measurable terms allows you to compare different branding
vehicles, such as print advertising and online newsletter sponsorship. Both can
generate brand awareness, but which one is more effective?
Example #2: "we don't expect too many leads from this tradeshow, but
we have to be there; otherwise, people will think we are in trouble."
Maintaining your company's image is a legitimate and important market impact goal,
yet there are many ways to achieve it. This goal can and should be defined in
measurable terms, such as the number of people exposed to your presence. In this
case, the cost of the tradeshow should be allocated against two market impact
goals - lead generation and company image.
Example #3: "we don't know how many people will respond
to our e-mail campaign."
It is easy to estimate the results when you have a history of similar activities
to rely on. Still, not having such history is not an excuse not to estimate the
results or clearly define the goals. Even a wild guess is better than not having
one at all; it may help you see that in some cases even your wildest dreams cannot
justify the
expense. If you have a large list, test a smaller sample of it before you get
started (make sure the sample is randomly selected and statistically significant).
Once you start generating results, it will be easy for you to go back and adjust
your estimates and goals moving forward.
Example #4: "we cannot measure the results of our analyst relationships
program."
You bet you can. If you're only looking for advice, the budget should not come
from your market impact programs. Market impact goals of an AR program are certainly
measurable, such as the number of positive mentions in the analyst reports, media
quotes, and customer referrals.
Example #4a: "but we don't necessarily know when a customer was referred
by an analyst."
First of all, you should know. A sales person should know how the lead was generated
and who influenced the decision. But even if you don't know it in all cases, do
you know it in most of them? Half of them? Put a factor on the results based on
your estimate of how many you miss. Even if you're wrong on the factor, you should
see a trend of improvement when you launch or increase your spending on analyst
relationships. If you don't see improvement - it's a good sign to go and check
why.
To summarize:
Define clear Measurable Market Impact goals. Estimate the expected and
desired market impact of each activity (some activities may have more than one
type of market impact). Prioritize your budget based on estimated results and
Cost per Market Impact. Diligently measure whatever you can. Direct all traffic
to your website and use separate landing pages and tracking codes for each activity
and source of market impact. Estimate whatever you cannot measure directly; imperfect
measurements are still better than no measurement at all.
As former NYC mayor Rudy Giuliani said when asked how he reduced crime in the
city, in reference to the extensive use of metrics and benchmarks exercised by
his administration: "If you can't measure it, you can't manage it."
Eran Livneh is the founder of MarketCapture (www.MarketCapture.com),
helping software companies enter new markets, introduce new products, and increase
market share. Eran is also the publisher of the MarketCapture Newsletter (see
past issues and subscribe at http://newsletter.MarketCapture.com).
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