Part I: The Strategic Framework
I recently spoke with a friend and former colleague who’s now the CMO of an early stage company. They just launched the beta of an online/offline service targeted to consumers in their local market. I asked him how things were going. He told me that the site was getting a lot of traffic and that calls were coming in but then he sighed a little and said, “To tell you the truth, I really don’t know. I wished we’d built the company with measurement in mind.” I was stunned. This was coming from a seasoned marketer with substantial experience in measurement and analytics and a history of working for some of the top brands in the country. I started thinking: what does it take to build measurement into a new company’s DNA?
A successful marketing analytics program has three key elements: a strategic framework, a work-flow process and a technical infrastructure. As intimidating as it might sound it’s actually easier to consider this early in company development and build accordingly than it is to retrofit later. (Just ask your friends who work at Fortune 500 companies about their latest adventures with large-scale Oracle or Seibel implementations.) And the good news is that as with everything else, technology has evolved and there are now much better, lower cost, less labor-intensive options which are well suited for use by smaller organizations.
To begin the process, you should start by establishing a strategic framework. The strategic framework sets the guidelines and expectations for the program. There are two important aspects to this. The first is a company mindset that measurement is a way of life. Early in my career I worked for what was then one of the leading telecommunications companies. At the time we were a hot marketing shop, turning out a huge array of products, promotions and campaigns in record time. Our typical timeline from conception to market launch was 6 – 8 weeks. It was common for us to have 150+ call center campaigns or 75+ direct marketing programs at any given moment. While speed-to-market was our mantra, we didn’t sacrifice analytics. Every single campaign had to go through a business case and meet certain ROI criteria prior to launch. Measurement and analysis were part of the company DNA. This came from the top down and was drilled into every new hire. And instead of being a management-imposed barrier, it became a lingua franca for even the newest, youngest employees to converse with our senior executives. (I can think of a least one freshly-minted MBA who was particularly talented at seeing the story behind the numbers and interpreting that for management. He’s now a partner at a top venture fund with a strong track record of success.)
The second aspect of the structural framework is a company-wide basis for measurement and analysis: a marketing dashboard. Think of this as a snapshot of the company which shows performance against top priorities and goals, and which enables everyone in the organization to have the same understanding of what’s working, and what isn’t. I’ve seen these used successfully at leading global companies and small, technology-driven nonprofits. The process is fairly straightforward: define the top metrics for the company (number of sales, revenue per customer, number of users, conversion rates, etc.), identify the sales, marketing and customer service activities which drive these metrics, and summarize them all in a 1 –2 pp report, using simple graphs and charts to track progress over time. The report should show a direct link from your business goals and milestones to your sales and marketing programs. The idea is to telegraph critical information. This isn’t supposed to be an exhaustive (an exhausting) “Big-Six” style wonky deck. Don’t try to cram every possible data-point into a group of tiny charts which overwhelm the page. The challenge is to keep the report simple and succinct. In a quick read you should be able to understand whether the trend-lines are headed in the right direction and what issues require focus.
Depending on the industry rate of change (things like sales cycle, competitive moves, etc) and the intended audience, this report can be done daily, weekly, monthly or even quarterly. It provides a mechanism for all levels of management (including your investors and board) to understand the company’s progress, evaluate success and trend early warning signs of problems. Distributing a distilled version of this throughout the company puts everyone on the same page – literally. It helps your engineers understand how those apparently unrelated product features actually drive revenue. And it shows the CFO that it’s not just “marketing alchemy” … there’s a direct correlation between meeting sales and revenue goals and strategically-driven marketing programs. My experience is that startups attract smart, highly motivated people. The more they understand the company’s success drivers, the better they’ll be able to contribute to that success.
I’m sure this seems like fairly practical, even obvious advice. For anyone who’s been in a sophisticated marketing company this is a standard way of doing business. And it’s true, it’s not rocket science. But it may help you avoid having to hire one to interpret your data down the road.
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