After more than 15 years of downward pressure on marketing costs, the majority of traditional businesses are struggling to deliver growth and yet marketing provides one of the most successful drivers of business growth and performance when properly invested and measured against performance.
The problem is that in many organisations marketing is treated as a cost of business with little or no focus on the return on that marketing investment. No wonder the strategy of cost cutting to profit has had such a major impact on marketing and subsequently the marketing agencies and suppliers.
But with a trend to Zero Based Budgeting (ZBB) in marketing, especially in Consumer Packaged Goods, but increasingly other categories, and an increased expectation of proving efficacy and delivering return on marketing investment (ROMI), more marketers are looking at how they set and apply their budgets against performance metrics than ever before.
But in a world of overwhelming data, marketers are often unsure of which metrics are the best for measuring performance. This is compounded by the fact that many of the marketer’s agencies, suppliers and vendors will be recommending metrics that are directly attributable to their performance, but are often irrelevant to the performance of the organisation.
In our role as completely independent marketing management consultants we bring a holistic view to performance that integrates business metrics with marketing metrics to provide a balanced score card for the organisation, the marketing team and their agencies and suppliers.
Here are three recent case studies of that approach to marketing performance metrics and measures.
Case Study 1
Financial Services – Marketing Performance Measurement
Challenging Problem: A major financial services advertiser had invested heavily in sponsoring entertainment events and products to add value and encourage their customers to participate in high value entertainment products and therefore increase customer transactions and engagement.
This had become a cornerstone or pillar of the company offering as it was seen as a marketing investment for both acquisition and retention. But budget constraints and decreasing customer participation had made the advertiser question the investment.
Creative Solution: TrinityP3 proposed to undertake an independent marketing performance assessment and effectively try and replicate the business case for the program to see if the available data still supported the investment.
It was important that the assessment was empirically measured and evidence based as there were strong emotional ties to the program internally and political support, which had prevented this being undertaken previously.
Process: TrinityP3 was provided with full access to the financial performance of sponsorship, the costs and the performance along with market and customer research to understand the role and impact the sponsorship program had on driving financial performance.
It was decided to take a three-year review period to ensure the results of the performance assessment were robust. The results of the analysis and assessment were shared with the Marketing Director and senior Management.
Result and feedback: The results of the analysis showed that while the investment level from marketing had increased well above CPI each year, over the three years the financial value delivered in customer sign-up, retention and revenue had fallen over the same period. Interestingly the fall was seasonal and not consistent across the year or the assessment period.
The sponsorship program had never directly performed at a profit, but the effective cost was now placing a significant question mark over the continuation of the program in its current form.
Instead of scrapping the sponsorship program, the recommendation was to undertake a one-off alignment of the investment level to bring the cost of the program, after returns to an acceptable level and then implement a series of monthly and quarterly measures to monitor the performance so that the investment level could be adjusted and managed more effectively going forward.
Case Study 2
Education Provider – Marketing Performance Measurement
Challenging Problem: A leading educational service provider operating across three markets approached TrinityP3.
The client engaged TrinityP3 to independently assess the program performance metrics, as well as create a new narrative to position against alternative marketing and channel opportunities.
Creative Solution: We applied our Marketing Performance Model solution to assess the current business approach, program performance data, and reporting frameworks.
The Marketing Performance Model helps navigate and prioritise the most important measures from a quantitative perspective, to prevent drowning in data and convoluted success story communication.
One of the key challenges was to navigate the laws and guidelines of each country and offer next practice recommendations when comparing against competitive channels for future activity.
Process: The first stage in the process was to wade through the wealth of annual quantitative and qualitative research reports and program reporting documents provided for each market.
Measures and results were then calculated to a cost per student and potential lifetime value level, and compared against industry and channel performance data.
Then a third stage allowed for trends, filtering and behavioral journey mapping with the key client stakeholder.
Result and feedback: After extensive assessment and multiple conversations with the client, five challenging themes were identified.
There were also critical meaningful, different and salient brand values and benefits identified that were driving strong positive shifts in attitude, knowledge, self-efficacy and behavioral intent.
These were used to build the new performance model and narrative within a consumer decision journey framework.
Two key measures were calculated to prove the delta – post versus pre session shift in student desire to learn and ask more. Teacher Net Promoter Score advocacy levels were identified as amongst the highest financial service operators around the world. And well above the global financial services industry average NPS of 37.
The client is now embarking on standardising the approach across each market.
There are two key lessons that were highlighted from this project:
- Firstly, in-depth, face to face engagement and experience programs need to develop robust cost and value metrics down to a per unit level. In this case, per student. This allows calculation of an overall potential lifetime value for the total number of students impacted per year, and allows for identification of the incremental percentage of future potential value created by the program investment.
- Secondly, as an independent advisor, TrinityP3 says it as we see it. We helped refocus the positioning story, performance reporting, and strategy from a pragmatic perspective in a world where we are seeing corporate social responsibility, marketing and sponsorship budgets continually being put under the microscope.
Case Study 3
Global Charity – Marketing Performance Measurement
Challenging Problem: A high profile, global charity commissioned TrinityP3 to evaluate its annual marketing campaign results and channel effectiveness in order to:
- Gain greater understanding of the marketing performance and channel effectiveness across four primary markets.
- Identify any gaps in the current tracking and measurement methodologies.
- Share recommendations for evolving the marketing performance measurement in line with relevant next practice given the charity’s stage of marketing maturity.
Creative Solution: We applied a bespoke marketing performance evaluation approach to identify the cost per registration and cost per donation, versus the return on value of registrations, and actual return on marketing investment (ROMI) in terms of donation revenue.
This allowed marketing channels to be assessed by budget splits, channel activity volumes, engagement levels, conversion rates, and effectiveness for digital and non-digital activity including:
- Radio
- Outdoor
- Activations
- PR
- Local Press
- Blogger Outreach
- Partnerships
- Facebook organic
- Facebook paid
- Digital Media
- Digital Retargeting
- Direct Mail
- Ambassador activity
Process: The first stage of the project was to identify the available data. This involved extensive review of marketing strategy documentation, campaign and media reports for each market. As well as identifying the level of unified technology platforms being utilized, and data source quality in order to assess the value of inputs for analysis.
Once the results were unified, we developed a bespoke model to show the marketing impact in driving website traffic, registration, and donation for all tracked channels. This also allowed for comparison of channel performance against each market average to determine success or failure.
The final stage was to identify actionable insights and recommendations based on the performance analysis, as well as recommendations on budget increase, maintenance, or reinvestment down to an individual channel level.
Result and feedback: It may surprise you that mass-market channels, not the digital channels, actually drove the majority of each market’s result. However specific mass-market channel success could not be fully accounted for due to the lack of specific tailored tracking.
Fourteen opportunities to optimise performance and reduce budget fragmentation were presented. The charity is implementing these for the next campaign.
Nine recommendations were presented in order to establish standardised tracking, standardised performance measures across markets, and the development of a unified data platform in order to develop a lifetime value data model.
The key outtake for the charity from this project was that they were focusing effort and resources in the wrong areas. Significantly overinvesting in areas that actually weren’t performing well.
Having benchmarks means better marketing decisions can now be made based on insight rather than gut feel.
You can find out more about our process and methodology for setting marketing budgets and performance metrics here.
