Few members of the C-suite rely on marketing data to make strategic decisions, according to the joint VisionEdge Marketing (VEM), ITSMA, and Forrester Research, Inc. (Nasdaq: FORR) 2013 Marketing Performance Management (MPM) Survey. Just 9% of CEOs and 6% of CFOs leverage marketing data in this manner. The reason? Marketing dashboards report marketing activity rather than business outcomes, as marketers cling to performance metrics to continuously justify budgets and resource allocations — when instead they should show how marketing moves the needle on top-line growth or profitability.
The 2013 MPM Survey captured input from more than 400 respondents, enabling ITSMA, Forrester, and VEM to expose valuable insights on the performance measurement and management challenges that marketers face. The study, which VEM began initially, is now in its 12th year.
“The data demonstrates how marketers rely too much on their CRM and marketing automation systems to produce dashboards or report on marketing results. These systems are fine for providing a view into marketing program activity and pipelines, but the research shows that most fail to produce the level of information and metrics that business executives want to see,” said Laura Ramos, Vice President, Principal Analyst serving CMOs at Forrester.
Operational Efficiency, Not Effectiveness
Measures of operational efficiency, such as on-time delivery, budget, productivity, campaign performance, and lead data, are the most common metrics that marketing tracks and reports. On average, 54% of marketers use data analytics to fine-tune the marketing mix. However, few marketers are using data to predict customer behavior, make strategic recommendations, drive innovation, or have an impact on customer acquisition, retention, or growth — measures that make a stronger connection between marketing activity and business outcomes. For instance, just 35% of marketers, on average, use data analytics to predict customer buying behavior.
“The metrics that marketers say they use suggest an almost myopic focus on efficiency instead of effectiveness. Marketers need to add metrics that measure the effectiveness of their programs as well as measures that will help them make strategic recommendations,” said Julie Schwartz, Senior Vice President, Research and Thought Leadership for ITSMA.
Past Performance, Not Predictive Insight
A key component of the annual study is the number of marketers earning an A grade from the C-suite for their ability to affect the business and measure their value. The grades remain relatively stable compared with last year, with 27% earning an A, 38% earning a B, 29% earning a C, and the remainder failing. The A marketers are better at using data and analytics in general, but all the groups primarily use data and analytics to report on past performance rather than to support future decisions. “Marketers are at various stages of their journey, some further along than others. One step all marketers need to address is to have the building blocks and repeatable processes needed to support alignment, analytics, and accountability,” said Laura Patterson, President, VisionEdge Marketing.
The final reports from ITSMA/VEM and Forrester, respectively, will include select survey results along with recommended action steps to help marketers improve marketing effectiveness, efficiency, and value for their organization. The results will be previewed at the ITSMA Marketing Leadership Forum in Napa, Calif. (http://www.itsma.com/events/2013-marketing-leadership-forum/) and presented in the June 4 webinar, Measuring and Communicating Marketing Performance (http://www.itsma.com/events/measuring-and-communicating-marketing-performance/).