While marketing can rightly be considered an art form – understanding the nuances of human psychology and behaviour to attract potential customers – efficient marketing is a science, with performance monitoring and management taking centre stage.
Companies have a wealth of data at their disposal about every aspect of their marketing activities, from internal efficiency to effectiveness of marketing efforts, so the question of what is and isn’t working, and the real value that marketing is creating, can now be answered.
But availability of mountains of data is not necessarily a guarantee of success. Not only do company need to identify the right data to gather, they need to use the right measurement and analytics approaches to measure and interpret it. Furthermore, companies need to make sure that the right decision-makers have access to the insights in order to take data-driven strategic decisions.
On this page, we look at what marketing performance management is and why it’s so important to your company, how to set up comprehensive marketing performance management processes, which KPIs you need to be focusing on across different channels and activities, and how you can represent all this in a clear and understandable way so that decision-makers can easily see the path to take.
What Is Marketing Performance Management?
Marketing performance management is basically the practice of monitoring and measuring the performance and effectiveness of marketing activities, with the goal of gaining insights that can help you continually improve the processes, and ultimately improve the ROI.
While the monitoring and measurement aspects are highly important, real results will only come if you also focus on how this information is incorporated into decision-making, i.e. the ‘management’ side of performance management.
Some of the key advantages of implementing marketing performance management are:
- Justifying spending and deciding how to allocate budget: Without a method to monitor and measure effectiveness, it’s impossible to know if investments are actually paying off, of whether they are not contributing to your overall objectives.With the right insight, you’ll be able to identify the activities with the highest return, and make objective decisions about which to continue and which to adapt or eliminate entirely.
- Fostering accountability: By establishing a clear link between your teams work and how that feeds into the overall company goals, you are increasing transparency and creating a sense of accountability. Also, with the motivation to show the real value of your marketing efforts, your team will be much more focused on how each and every aspect of what they do can help show the value of the team.
Learn more about the benefits marketing performance management can bring to your business.
How to Set up Marketing Performance Management for Success?
With a strong right marketing performance management framework in place, your marketing teams will have a clear view on how their efforts contribute to not only your strategic marketing goals, but also your company goals. Furthermore, your key decision-makers will have access to the data they need to help steer your marketing efforts toward bottom-line results.
Our article on how to set up marketing performance management for success, guides you through the process of establishing a framework that:
- aligns marketing strategy and goals with your overall business goals
- identifies the marketing processes needed to achieve your strategic goals
- uses a marketing dashboard to monitor and measure performance, and a balanced scorecard to monitor and measure progress
- defines how data insights will be used to continually improve marketing strategies and tactics
How to select the right marketing KPIs?
When it comes to determining what areas of your marketing mix – product, price, place, and promotion – need to be adapted or improved, choosing the right KPIs can provide the data-powered insights you need to be able to make strategic decisions. But with KPIs being so specific to each individual company, depending on their sector, maturity and goals among other factors, how do you select the right ones?
Here are a few important things to keep in mind when choosing KPIs for your marketing dashboard or balanced scorecard:
- Choose KPIs that are align with your strategic goals: remember that KPIs are way to measure progress towards your marketing and/or company goals. If they’re not directly linked, then they shouldn’t be a KPI.
- Keep your company’s maturity in mind: where is your company in terms of growth? Brand awareness might be more important if you’re just starting out, while KPIs related to customer loyalty might not be so relevant yet.
For more factors you should take into consideration when choosing your KPIs, and an overview of some of the most useful KPIs for measuring brand awareness, lead generation, engagement, and customer acquisition and loyalty.about marketing performance management, take a look at our article how to select the right marketing KPIs to track marketing performance.
Marketing Dashboard vs. Balanced Scorecard: Which Do I Need?
Tracking and measuring data is one thing, but unless that information can be presented in a clear and user-friendly way, valuable data risks being trapped in never-opened reports and spreadsheets. This is where marketing dashboards and balanced scorecards come in:
- Marketing dashboard: A marketing dashboard is a centralised hub that gives simple, real-time access to datasets from multiple reports simultaneously. Data is updated constantly, letting teams monitor their performance in real time.
Dashboards also provide useful comparison between current and past performance, e.g. website traffic over a 12-month period, or email open rates.
- Balanced scorecard: Unlike a dashboard, which provides a real-time view of operational performance, a balanced scorecard is used to show the progress of your performance towards a certain target.
This strategic planning model typically involves measuring your company’s overall health by looking at four aspects: learning and growth (also sometime thought of as organisational capacity), internal business processes, customers and finance.
While they serve different purposes, both offer great value to your department or company as a whole by bringing increased transparency and accountability.
For a more in-depth look at this topic, see our article on marketing dashboards and balanced scorecards.
Effective marketing performance management is essential to any businesses. By taking an organised and structured approach to determining exactly how to monitor and measure performance, companies can help align employees, resources, and systems to meet their strategic objectives.
With increased transparency and accountability, potential problems can be identified early and corrective actions taken to get things back on track on track.
In the longer term, measuring the performance of a company’s marketing mix, and turning that data into insights and intelligence, helps key decision-makers in making strategic decisions about the future.