10 Immutable Laws of Marketing Measurement
By Dave Reibstein and Pat LaPointe, Managing Partners, MarketingNPV
- The purpose of marketing measurement is to enable the firm to take smarter risks to achieve growth and attain competitive advantage. It is motivated by a desire to be more aggressive, efficient, and effective with the marketing budget, not to “cover your ass.”
- Everything can be measured. The question is, how much time or money is required to achieve a level of confidence in the outcome, and what is the value of higher confidence?
- Strategy is as important to measure as tactics . Forecasting the financial value creation from strategic alternatives ensures continuous success. Optimizing the near-term tactical mix helps achieve targets in the next few quarters.
- Make explicit our judgment. We all make decisions based on judgment. Most of that judgment is informed judgment. Making our assumptions and judgment explicit allows us to share it with others and for it to be challenged. Don’t let waiting for hard data inhibit decision making.
- You can’t measure the payback on Marketing unless/until the role of Marketing is clearly defined within the organization. Ambiguity in the role undermines confidence in the solution.
- Marketing is not an island within the company. Consequently, its measurement cannot be isolationist. Engaging Finance, Sales, and business units in the marketing measurement process is critical to learning and to credibility (see 4 above).
- There are a million metrics , but only a few are right for any situation. They tend to be the ones that build consensus within the executive committee, not just the ones marketing finds useful. Too many metrics can be paralyzing.
- Availability bias is blinding. Looking only at the data you have (or that which is easiest to collect) inevitably reinforces the current view of the world. Altruistic attempts to use available elements will almost always distract constrained resources from the path of progress. Effective measurement defines knowledge requirements beyond the information at hand and relentlessly pursues closing the gaps.
- Sound execution of research and analytics are the price of entry. Excellence in measurement requires effective experimental design and structured guessing , skills based on courage, and discipline in the face of easier alternatives.
- Partial solutions , absent the context of a comprehensive plan, accelerate the inevitable turnover of the CMO.
