This is the story of technical advance: do something, do it right, and then do it fast. Too often in our world we stop paying attention after the first phase and the history of technical advance is told in a series of do-its.
You see this happening in marketing today. It’s a discipline undergoing a great deal of change and as recent IPOs and acquisitions can attest, marketing is a happening thing. One of the biggest changes has been in taking marketing from a practice that concerned itself with brochures, press releases, and slide decks, to one that has become much more quantitative.
Being quantitative means doing things with data — capturing it, analyzing it and developing measures, metrics and ultimately KPIs. Many companies have resisted simply capturing data and wondering what to do about it. They’ve progressed to analysis, to producing information that savvy marketers transform into knowledge used in decision-making. But if a little knowledge is a good thing, more is more better.
So consider this. Marketers got smart and developed some metrics to gauge how well their programs work. Let’s focus on campaign ROI, a classic measurement that many people use in many ways to compare what was spent on a business activity and what revenue or profit was generated. So far so good, but I think you need to delve deeper.
Classic ROI on a marketing program or campaign tells you something about the revenues generated by a campaign and if everything was that simple, all of the revenue attributed to a campaign would provide a clear understanding of its effectiveness. This would mean that a revenue dollar came directly from the campaign and no other factors influenced that spend. Would that this was true.
In reality we all know that marketing campaigns are leaky and that is a very good thing. A campaign might generate revenue immediately but more often than not, the campaign influences the deal because it prepares the prospect to take advantage of an offer from a follow-on campaign. You can see this more clearly with baseball.
If you have two really good hitters, a good strategy is to make them numbers three and four in the batting order. Often a pitcher might elect to walk, i.e. avoid, a good hitter in the hope of getting to the next guy who may be an easier out. But in this case if you walk number 3 you have to pitch to number 4 otherwise you are just walking the bases loaded and then you have real problems. So the presence of number four gives number three more chances and, being a good hitter, number three will respond with more hits. This is a tough situation for the pitcher who therefore has to be on his game for both batters. Ok, back to marketing.
Marketing campaigns are like the batting order to a degree. One can influence the next one down the line. If you are a manager over the course of a season you can run A-B tests to see the effects of the batting order strategy. To get really concrete, when David Ortiz batted third and Manny Ramirez hit cleanup the Red Sox won two World Series titles.
Ok, but the idea of campaign ROI misses all this. To get an apples to apples comparison in marketing you need to develop the idea of campaign influence. How much downstream influence can we attribute to a campaign beyond its ROI? Campaign influence is a metric that I think falls into the “do it right” bucket alluded to at the start. You can say that ROI is the big picture, highly granular measurement, and that campaign influence is more fine grained and I think you’d be right.
But here’s the important point to consider. Nothing remains stagnant, especially in the fast moving front office. Campaign ROI was a great idea, it still is. It got us to think differently about marketing and how to quantify what was almost purely qualitative. However, it already isn’t enough. It’s just a do-it today.
When we are able to attribute influence to different campaigns we can more clearly see that some campaigns are more effective with specific products, offers and customers. And once that happens we can tailor campaigns for better results. The A-B test is no longer this or that but this or that in which circumstances? Under what conditions?
This turns us from gathering data to massage into information to using information to produce knowledge about customers inside of a sales process. Campaign influence might tell you, for instance, that prospects that have been exposed to certain campaigns close faster, a valuable thing to know in the middle of a quarter when you need more revenue.
It’s like when we had David at bat, Manny on deck and a runner on second. Odds were good that the runner would be crossing home plate soon. I just love baseball, err, I mean, marketing.
(Cross-posted @ Beagle Research, LLC)