Metrics Deficiency
DIRECT MARKETERS WANT TO do the right thing when it comes to metrics. But their desire far outpaces their ability, judging from a new survey by the CMO Council.
For example, almost 75% lack a dashboard, or performance measuring system, for tracking and adjusting marketing expenses. And 66% don’t have a formal method to trace marketing’s role in customer acquisition and retention.
“Marketers have become very good at talking the talk,” said Christopher Kenton, senior vice president at the council. “But they seem to be quite a bit behind when it comes to putting those processes in place.”
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 with customer data. Asked to list the information 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 DMers have in calculating it.
“For a lot of companies, lifetime value is still a bit of a holy grail,” Kenton continued. “There are a lot of ancillary calculations 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 “segmenting their market in terms of customers, top-line yields and other low-hanging fruit,” Kenton noted. “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’re on the right track with their marketing.
The poll was conducted online in January and February, and drew 568 respondents. Among them were CMO Council members, and readers and customers of Chief Marketer, BtoB magazine, ClickZ, Marketing Sherpa, and the Promotion Marketing Association.
