by Jim Lenskold
Leveraging Marketing Automation for Better Measurements
More and more marketing organizations are adopting marketing automation for campaign management, lead management, and the emerging area of revenue performance management. Marketing automation not only improves efficiency, it drives increased marketing effectiveness through better targeting, content management, nurturing, scoring and closed-loop tracking. Most systems have very good reporting but that is only the start for generating more robust measurements with this new source of marketing data and customer behaviors.
Companies that have implemented or are planning to implement marketing automation should understand how these systems support and enable better measurements. There are opportunities to generate better insights into marketing’s contribution to incremental sales, revenue, and profits. I’ll share with you the limitations current systems have in terms of measurement capabilities as well as tips to gain more insights from the tracking capabilities and rich data within these systems to guide marketing decisions towards higher ROI.
Keep in mind that our primary goal for marketing measurements is to guide strategic and tactical decisions so the next dollar spent on marketing is more profitable than the last. Our requirements are different than simple results reporting. We need actionable insight on strategies in addition to comparisons of tactic performance.
We’ll cover the following three categories of measurement improvements related to marketing automation:
- Better management of basic measures
- Modeling & analytics measures using captured data
- Key metrics and performance management
This information is not intended to provide a comparison of technologies but instead to provide guidance for improving measurement capabilities using marketing automation technologies such as Aprimo, Unica, Marketo and Eloqua.
Better Management of Basic Measures
Many marketing automation systems have basic measurement capabilities built in to provide detailed results tracking and support for market testing. Current automation solutions are generally managing and measuring direct marketing and online marketing campaigns that track responses, leads, and sales to a specific tactic. Historically, direct response marketing has been well-measured so the new benefits come from campaign reporting that is delivered faster, with less effort and with more detail.
Results tracking measures allow marketers to compare the impact of individual tactics on outcomes such as leads, sales, revenue and profit. While an important measurement tactic, results tracking is a basic measurement approach that does account other marketing and non-marketing factors influencing those outcomes; yet it offers plenty of insight. This measurement approach allows for comparisons to identify higher performing tactics and weaker tactics that need to be improved or eliminated. Results measurements can provide a good indication of relative ROI when comparing the financial contribution against the cost for each tactic.
Recommendations to get the most from results tracking measurement processes follow:
- Track or project results through to sales conversion and average profit per sale for a more accurate comparison than responses alone
- Analyze results at a segment level to identify where performance meets objectives and to guide future targeting
- Supplement tracking with more robust modeling and analytics when insight is needed into the impact of multiple touch points
The second capability is marketing automation’s support for using market testing measures. This support involves creating matching treatment and control groups and generating results for direct marketing campaigns. The control group excludes a specific direct marketing tactic to measure the true incremental lift of that specific tactic. Market testing to comparable treatment and control groups will eliminate the influence of other marketing and non-marketing factors, providing a more reliable measurement than basic results tracking. Market testing can also be set up for assessing online media campaigns or online content using A/B splits. This approach is primarily used to test a “challenger” campaign against a “champion” campaign to assess the relative impact and requires a comparable control group to measure the incremental lift of the specific campaign within the broader marketing mix.
Actions to improve market testing measurements:
- Set up market test measures to assess and identify higher-performing strategies; don’t be limited to only measures comparing tactics
- Expand current measures beyond single tactics to assess contact strategies, contact frequency, or the integration of multiple tactics over time
- Experiment with alternative strategies and tactics to accelerate improvements in effectiveness
Rich Data for Advanced Modeling & Analytics
A significant gap that creates a major measurement barrier for many companies is access to detailed marketing data. Marketing automation greatly reduces this barrier by serving as a repository for a good portion of marketing activity and responses. Marketing automation systems capture data on the marketing initiatives that are planned and executed through those systems, which tend to consist of direct response programs and online campaigns. These systems are also starting to capture social media activity, which enables better measurement of these emerging marketing channels.
When this data is combined with data for missing mass media marketing and offline marketing programs, modeling can be run to assess the marketing mix and identify performance drivers. Sophisticated modeling measurements can identify the sales contribution of each tactic within the overall marketing mix, eliminating the attribution of each sale to a single tactic that is used in results tracking.
Even without the addition of non-tracked marketing, there is plenty of rich data to support analytics assessing marketing performance. Modeling of tracked campaign data can include:
Lead Quality Analysis – Predictive modeling is used to project sales conversion rates and average customer value to assess the effectiveness of specific tactics to attract higher value and higher potential prospects. Measuring lead quality will lead to decisions that drive better marketing performance compared to relying only on lead quantity.
Multi-Touch Drivers & Synergies – Modeling to assess the relative contribution of tracked marketing campaigns on generating leads, opportunities or sales within a complex mix of multiple touch points. This analysis uncovers hidden marketing drivers that get missed when results are tracked to the first lead source or last contact. With this analysis, the incremental contribution of these tactics that would otherwise be missed can now be quantified.
Engagement Lift – Analytics are run on specific forms of buyer engagement such as educational programs or social media contacts to determine the incremental lift on sales outcomes. This analysis quantifying the impact of a non-purchase action helps marketers assess marketing initiatives aimed at motivating such forms of engagement.
Actions for better model measurements:
- Capture weekly data on marketing activity and response for more precise modeling
- Aggregate marketing data not managed through marketing automation for more complete modeling
- Run modeling to eliminate the complexity of multi-touch marketing environments to better understand the effectiveness of current tactics
- Use analytics with available data for deeper insights into specific aspects of marketing performance
Key Metrics & Performance Management
Marketing automation systems provide dashboards and other reporting capabilities to help track key metrics. Metrics can be tracked back to specific marketing initiatives or rolled up into a collective view. This functionality is a huge step forward in managing marketing performance and effectiveness. There are many valuable metrics and we’ll summarize what’s most important for guide marketing decisions and maximize ROI.
Recommendations to gain better insight from key metrics reporting:
- Choose metrics that align well to ROI. Start with the primary drives of ROI, which include sales conversion rates (sales as percent of responses, leads, or opportunities), average profit per sale and average cost per sale.
- Monitor purchase funnel progression metrics and analyze leakage points to determine where marketing improvement is needed to better influence purchase decisions.
- Metric trends tell much more than the current value of a metric so monitor changes over time.
- Use forecasting where possible to understand how changes in metrics today will influence financial outcomes in the periods that follow.
Innovation in marketing automation is moving at a very good pace. Marketers benefit from capabilities to better design and manage campaigns, as well as deriving better insights into marketing performance. Automation enables enhanced measurements and analytics so marketers can manage and improve effectiveness. Technologies will continue to capture more of the data that is so critical for advanced analytics to address the complex questions of marketing contribution. Marketers that use marketing automation as a resource for managing, measuring, and improving marketing effectiveness will certainly gain great advantages in achieving their goals.