By: John Lavey | Hammock President/COO
Measuring the impact of marketing investments, including content, on a company’s bottom line is a struggle for marketers—at least for those who are being honest.
A recent Harvard Business Review article offered CMOs a framework for thinking about how to demonstrate financial results to CEOs and CFOs. One of the key themes of the article is understanding the difference between validity and precision. “The apparent imprecision in measuring marketing’s financial outcomes does not undermine their validity,” the authors write. “Marketing leaders also need to protect against over-indexing the marketing mix toward the most trackable tactics merely because they offer more precision.”
My read? We measure a lot of things that don’t matter because it’s relatively easy to do so, and we reject things that do matter because we have a hard time measuring them. We choose precision over validity.
How can we preserve valid marketing efforts, yet show the impact of our marketing strategies and investments to other business leaders? Consider these eight keys, according to the HBR article:
- Define how CMOs can impact the overall business value
- Understand what that business value means to each company function (sales, finance, supply chain) and show the most relevant metrics for each function
- Have a deep understanding of how your metrics are constructed
- Explain inherent uncertainty of marketing measurements
- Emphasize validity over precision
- Have a budget story that shows rigor in managing marketing budget and alignment of spend with key organizational priorities
- Show transformation of marketing and how it is being run more efficiently
- Meet one-on-one with leaders, beyond reporting in a monthly group meeting
Takeaway: Creating meaningful marketing takes a lot of work to make an impact, and you have to be able to defend the strategy and investments internally. What are you doing to be persuasive in your inside sales job?
Image: Getty Images
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