Marketing performance management, commonly referred to as MPM, is the process of enhancing the effectiveness of the marketing strategies, with the goal of improving the ROI. This is a process that will encompass technologies, planning processes, services as well as the performance measurement and eventually establishing predictive marketing data. Ultimately, the purpose of MPM is to access date and analyze it so as to make predictions that will help in enhancing the marketing campaigns and resources that are effective.
In order to make the most of the MPM function, your marketing team needs to establish a reliable cycle that is mainly in three levels, namely:
- Alignment to revenue goal
- Access to accountability to revenue
- Develop predictive metrics for revenue.
Alignment to Revenue
The sole purpose of any business is to ensure that it is making profits, and getting a good ROI. The first stage in MPM will, therefore, entail creating a process that will manage the resources for the marketers. This will be done with the key objective being to achieve the main goals of the company, with key attention to the revenue that is generated. Some of the processes that will be set up at this stage include:
- Building marketing teams
- Managing the team
- Allocation of budget
- Setting goals
- Tracking performance accurately
- Measuring the correct metrics
As you will realize with this process, it is quite different from the actual marketing activities. This is the strategizing side of marketing, and this is why it will mainly revolve around planning and measuring, so as to get accurate predictions in relation to revenue.
Setting clear targets is important as it will help the marketing teams to align to the overall objective of the company. Marketing performance management will give you a strategic framework to be able to set and measure revenue and accountability. This is the stage that will also help in figuring out the specific role that marketing is playing in achieving the wider goals of the company.
For a long time the marketing department has been considered to have a minor role as far as revenue generation goes. However, with MPM, the aspect of measuring revenue and accountability is introduced and as such, the marketers can find their place in the organizational structure. This will help them to align and commit to the set goals of the company.
Access to Accountability to Revenue
With the help of MPM, the marketing teams align to revenue and this will make it easier to have the whole company be on the same page and be accountable to the same objectives. This moves the responsibility of the marketing team from merely reporting their leads and CTR, to a position where they can give a report on the revenue of the company. Revenue is the ultimate goal and MPM is the only function that gives the marketers access to accountability to revenue.
When every team is accountable to revenue, then your company will easily enjoy full-funnel tracking. This will also allow the marketing team to, seamlessly, implement the multi-touch attribution approach. Attribution can connect each marketing interaction and this helps to report on each channel and marketing campaign, while still unifying the revenue metric.
The marketing report will be more detailed and have relevance to the ultimate goal of the company; revenue. As such, we can detail the reports and illustrate the amount of money that the marketing team was able to bring. In the past, the sole objective of the marketing teams was to analyze and report on the CTR. This does not mean that factors like CTR and lead conversion are not important, only that they are not the measure of the revenue of the company. This is achievable through marketing performance management.
Develop Predictive Metrics for Revenue
While other leaders in the company have a wide range of tools to use for planning and execution of their responsibilities, marketers have the limit of spreadsheets for forecasting and planning purposes. With a simple excel sheet, it would be almost impossible to forecast on the marketing performance of the company. With marketing performance management, you will continually improve and understand the metrics that contribute to revenue.
As such, as a CMO, you can confidently use MPM to develop forecasting capabilities, which will help you in making informed decisions. With the proper application of the MPM function, you will be able to contribute significantly to the main goal of the company.
p.s: Image source: https://go.forrester.com/f/b/users/LRAMOS/measure-marketing.jpg