Marketers Suffer from a Metrics Deficiency: Survey

Posted on by Chief Marketer Staff

Marketers want to the right thing when it comes to metrics. But their desire far outpaces their ability, judging by a new CMO Council survey.

For example, almost 75% lack a dashboard for tracking and adjusting their marketing spend. And 66% are missing a formal system for tracking marketing’s role in customer acquisition and retention.

“Marketers have become very good at talking the talk,” says Christopher Kenton, senior vice president with the CMO Council. “But they seem to be quite a bit behind when it comes to putting those processes in place,.”

And why is that? Because “those programs are “complex,” Kenton says. “And marketers don’t have the autonomy or mandate to actually carry them out.”

The metrics gap is apparent in many areas. A mere 44.8% monitor churn and retention rates, compared with 42.2% who don’t and 12.8% who don’t know.

What’s more, 36% have no formal system for evaluating and scoring leads and contacts. Only 10.3% have a rigorous process.

It’s the same when it comes to customer data. Asked to list the data most valuable to the planning process, 43% cited the value and profitability of an account, making this metric the winner by far.

In contrast, only 26.3% put lifetime value in the most valuable category, perhaps because of the difficulty they have in calculating it.

“For a lot of companies, lifetime value is still a bit of a holy grail,” Kenton says. “There are a lot of ancillary calculations that you have to put in, and they’re not trivial: Things like cost allocation, or how much of your plant expenses can be attributed to marketing or to a customer.”

But there are ways around it. Some firms are going for a simplified LTV, “segmenting their market in terms of customers, topline yields and other low-hanging fruit,” Kenton adds. “In broad strokes, those things can help you determine general lifetime value for broad segments of your market.”

Meanwhile, campaign response was seen as most valuable by barely 20%, and cost of acquisition by 11%. These numbers were higher among firms that feel they are on the right track with their customer programs.

Executives and managers (those in the trenches) see things differently. Over half of the executives listed buyer demographics and transactional history as the leading piece of customer data. But managers are much less likely to agree.

Kenton feels marketers should be cut some slack. Between the new tools, increasing competition and other complicating factors, CMOs are facing a “perfect storm of pressure,” he says.

The findings on metrics are all of piece with the rest of the survey. When it comes to customer retention, only 22.6% have a customer advisory board or council. And of those that do, only 26.2% get strong and valued feedback from it.

What difference does it make? Quite a bit: Those with advisory boards are far more likely to model or profile their best customers, according to the survey.

Overall, just over half of those surveyed do such modeling and profiling. At 63%, computer and technology marketers are most likely to do it. Healthcare/pharmaceutical firms rank near the bottom at 48%, and banking, finance and insurance in the middle.

Who influences the segmentation and targeting strategy? For 27%, it’s the CEO or business unit manager. Another 21.4% said it’s the CMO or vice president of marketing.

And this causes obvious internal tensions. Asked what prevents their firm from achieving the highest level of customer insight and intimacy, 26% of the executives said it’s the cost and complexity of data and systems.

But only 15% of the managers agreed with that. On the contrary, 21.4% of them blamed competing department goals and personalities (an opinion shared by only 13% of the executives).

The survey also revealed some tension between sales and marketing. While over half said the relationship was positive, almost 30% claimed that it is only occasionally effective, and 6% called it downright adversarial.

And this, too, can have consequences. Most firms have reliable data on the revenue, value and profitability of key accounts. But those in which sales had a dim view of marketing are less likely to have it.

And that isn’t the only byproduct of interdepartmental strife. Kenton cited one Fortunate 500 insurance company that had four CRM systems in its marketing department, “all championed by different groups within their organizations.”

How do firms drive customer conservation and interaction? More than half do it through their sales organization. Running a distant second was customer conferences or gatherings, and third was continuously evolving campaigns.

At 26.6%, the fourth method was surveys and audits, and almost 25% cited monthly customer newsletters. Customer advisory boards were cited by 8.3%. Blogs and podcasts? They were mentioned by a paltry 1.9%.

The rankings different slightly for firms who say they’re on the right track. Customer conference were the top device, followed by the sales organization.

The end result is the marketing is driven “more by processes and methodologies and less and less by meaningful interaction,” Kenton says.

The survey was conducted via the Web in January and February, drawing 568 respondents. They included CMO Council members, and readers and customers of Chief Marketer, BtoB magazine, ClickZ, Marketing Sherpa and the Promotion Marketing Association.

Most respondents are from companies with yearly revenue of over $10 million, and almost 25% are from firms with $100 million. Almost one fourth of are directors of marketing, 16.5% are vice presidents of marketing and 14.2% are chief marketer officers.

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