Predictability 2.0: The Core of Marketing Performance Management

What is the difference between having a campaign that shows ROI and having a campaign that shows predictability? When we look back a year from now, why will we see that “Predictability 2.0” was considered the biggest shift in customer relationship management (CRM) for 2007?

Most companies have been rebuilding their marketing infrastructure of late with the goal of getting a better return on marketing investment. Along the way, though, they encountered two hurdles.

The first hurdle turned out to be discipline. When the Six Sigma black belts entered the equation, the truth emerged that marketing departments that were not built on the infrastructure of database or direct marketing seriously lacked the discipline to measure or generate returns. Even the hardcore database marketers were stuck and unable to significantly shift efficiencies.

The second hurdle became obvious: The customer is the most important part of the performance equation. Specifically, marketers became more aware that if they forgot that customers are people who make choices, they were doomed to achieving subpar returns on marketing and company assets overall.

Infrastructure investments in CRM, campaign automation and management, and marketing resource management (MRM) show no signs of abating. The software industry has been focused on delivering new knowledge-based marketing tools to help marketers unlock the potential of the customer. These tools far outstrip every company’s current processes, metrics, employee and partner skills and responsibilities, and business intelligence. It’s truly difficult to find comprehensive and discipline-inspiring ROI examples as this industry moves onto what Geoffrey Moore coined as “Main Street” in his landmark book “Crossing the Chasm.”

In 2007 the Main Street for marketing is named Predictability 2.0. The only intersection on Predictability 2.0 Street has four roads merging together:

• Customer Way
• Measurement Drive
• Operational Efficiency Road
• Strategy Avenue

Customer Way
This will be the year that customer experience management (CEM) finds its place in the budget mix. The principles behind CEM as described by CRM Guru and Peppers & Rogers Group, among others, now fit cleanly into the drive for marketing investments created through the realization that no acceptable ROI can be achieved without the customer being in the center of the equation. It was almost laughable in retrospect that any of us tried to make the hefty front-office investments of the past decade while forgetting that the only thing that mattered was who the customer chose as the winners of his attention and purchase power.

In the business-to-business and business-to-consumer markets alike, decisions are made by people who are from time to time your customers. The companies that build superior experiences that match and guide customer expectations are the winners. The companies that earn loyalty through understanding and harnessing customer relationships are the winners.

At the root of both is the intelligence of the customer lifecycle. I can predict positive returns when a company has a thorough, dynamic, and operational use of customer lifecycle.

Measurement Drive
The next hot software to take its place in the investment mix will be decision dashboards and visualization (DDV). As did the creators of all previous software, the developers of DDV solutions have responded to a strong customer need. But DDV tools won’t meet this need without the metrics sets, formulas, data sources, and business intelligence capabilities necessary to deliver useful visualizations and drill-down capabilities on decisions and their outcomes.

One fundamental key to Predictability 2.0 is installing the measurement framework and metrics sets that can measure not only campaign performance but also customer performance. In an earlier column (”Marketing Performance Management: The Need for Predictability”) I introduced the Four Layers of Marketing Measurement. This framework connects Measurement Drive with Predictability 2.0 Street.

Operational Efficiency Road
Take a look around the marketing department and try to find a uniform, accepted, or even documented workflow. It is rare to find a company that has put the effort into capturing and designing marketing workflows using established techniques such as SIPOC (Suppliers, Inputs, Process, Outputs, Customers) methodology. Do you have something that looks like our basic marketing workflow framework in your company?

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The new chief marketing officer embraces discipline. A major cause of the rapid turnover among marketing leaders is a lack of solid database or direct marketing practices, let alone customer-driven strategies and practices that win superior results and market leadership. The new class of successful CMOs will be implementing MRM for better control of workflow, budgets, and digital assets. They will be staging implementation of customer touch-point mapping and real-time customer management so that they can make effective use of their customer lifecycle data for CEM.

Strategy Avenue
Let’s face it: Strategy Avenue is where the nightlife and fun is. It’s like the Las Vegas or Atlantic City of marketing. It’s creative, dynamic, and continually evolving, and it requires a great deal of finesse.

Mention “effective” with strategy, and the band goes home, leaving you with a dull party. Well, at least that is the reaction I get when I burst the strategy bubble with facts and best-practice examples that show my clients that they are fooling themselves if they believe that Strategy Avenue runs the traffic on Predictability 2.0 Street. But it turns out that effective strategy has to be fed by business and customer intelligence emerging from Customer Way, by the learning at all levels on marketing decisions and results flowing out of Measurement Drive, and by the control and discipline of Operational Efficiency Road.

Lane Michel is executive vice president/managing director of the Marketing Performance Management business unit of Quaero Corp., a marketing and technology services provider based in Charlotte, NC. You can reach him at [email protected].

Other articles by Lane Michel;

Marketing Resource Management: Delivering Predictability

Marketing Budgets: Zero Sum Wins

Analytics in Perspective: Keep It Simple and Relevant

Analytics in Perspective: Lessons from Sudoku

The Six Dimensions of High-Performance Marketing

Marketing Performance Management: The Case for Customer Experience Management

Marketing Performance Management: Break Conventional Marketing Wisdom