Making Financial Services Marketing Accountable
John Wanamaker, the department store magnate of yesteryear, once said, “Half the money that I spend on advertising is wasted; the trouble is that I don’t know which half.” While CEOs of today are certainly nowhere near as sanguine about wasting half of their marketing budgets, very little has changed. One of the biggest corporate questions remains: What value do we receive from our marketing expenditures?
Marketing has long been the corporate exception to the rule that “you can’t manage what you don’t measure.” Those outside the marketing function have traditionally viewed marketers as creative—as opposed to business—types that help maintain corporate image and support sales efforts, but produce unquantifiable results. In recent years, corporations have accelerated their efforts to develop approaches that quantify the effectiveness of marketing initiatives.
What to Measure
The first difficult challenge is to determine which marketing activity to measure. Some of today’s most promising methodologies simultaneously monitor a number of metrics to obtain a broad perspective on marketing dynamics. Marketing analysts then study the correlation between the effectiveness and interdependence of related initiatives, as well as the patterns of reinforcement between different activities. The result is a “marketing dashboard,” the newest concept in marketing measurement. This valuable tool arrays the most relevant and predictive metrics in a way that will enable marketers and management to rate performance and identify trends. The best marketing dashboards are customized to the organization’s industry, strategy, priorities and objectives.
There is certainly no single measure that can accurately quantify the value of financial services marketing activities that entail a number of financial products, services, customers and distribution channels. As a result, one answer for financial services marketers appears to be a customized, fully integrated performance measurement system that enables a company to develop a marketing dashboard that will provide insights that will guide future decision-making.
How to Measure
The next challenge is the determination of what technology to use to perform ongoing monitoring, data capture and analysis. The options range from multi-million dollar installations to do-it-yourself applications that utilize software such as Excel and PowerPoint to gain analytical and graphic capabilities. A functional system will facilitate mathematical calculations and create attractive graphics that will aid the analytical process.
How to Use It
The objective of the marketing measurement process is not simply to acquire and analyze data, but rather to use that data to develop new, more effective marketing initiatives. The marketing dashboard can provide both marketing and corporate executives with insights that will inform their decision-making concerning products, services, pricing, distribution, target markets, marketing, promotion, and more. Informed, innovative decision-making is most likely to occur if everyone involved understands and has confidence in both the measurement process and its results. Experience shows a direct correlation between the degree of corporate-wide buy-in and the ability to systematically improve marketing effectiveness.
The extensive, rigorous effort needed to develop an effective marketing dashboard may be lengthy and trying, but it can reap ample rewards. The ongoing analysis of consistent, accurate data can help an organization
- determine where expenditures are most effective
- develop realistic performance benchmarks and hurdle rates
- identify under-performing initiatives and institute timely termination or corrective actions
- recognize the interrelationships between different initiatives
- gain meaningful feedback and intelligence that can have a number of important uses such as measuring the efficacy of new initiatives and providing data to support budget requests and/or marketing expenditures.
While it may be easier to measure and analyze individual metrics than to continually seek to identify the interrelationships between multiple metrics, this simple approach does not provide the data needed to properly assess multiple products and services in the context of today’s highly complex marketplace. Instead, new approaches look at all the aspects of the marketing equation in order to engender the insights and understanding that will enable organizations to move forward with marketing initiatives that will provide a systematically increasing return on their marketing investment.
The Bottom Line
If you don’t measure success—you invite failure. While this is true in every area of business, marketing has long managed to get by without providing substantiating metrics to justify expenditures. The tide is now turning for marketers. Technological advances can now support the development of tools and techniques that monitor, capture and organize a wide array of marketing metric data. But effective marketing measurement—like marketing itself—is an ongoing process that is both an art and a science. Technology and number-crunching alone cannot reliably identify the strengths and weaknesses of marketing strategies and their execution. Instinct and intuition are critical to determine what to measure, what the numbers mean and what marketing initiatives are called for. Developing a marketing dashboard to track initiatives and successes is becoming a necessity. This area is still in its formative stage of development but promises to be a significant future trend that may ultimately prove the corporate worth of the marketing discipline.