The need to measure a return on investment has always been there, but in recent times, executives have become much more sharply focused on particular areas within organisations and what value they are providing. So how do you measure ‘success’, in the context of marketing and business development?
The starting point
Firstly, some questions to consider:
- What are your company’s business objectives and plans (financial as well as non-financial?
- What are your marketing/business development objectives and plans?
- What key performance indicators (KPIs) are measured at the moment? Are they telling the story of success in the way you want it to be told?
- Where are the gaps in what you can or do measure?
- What is your Board’s or CEO’s view of how what value marketing and BD teams can provide and how you measure success?
The answers to these questions are a critical starting point because they challenge what’s happening at the moment. What you have in place now might well be just what you need, but my experience is that it often isn’t. In looking at marketing and business development KPIs it is essential that they link directly to the business objectives and plans and that they do not only contain financial goals. For one thing, it is not very motivating for employees to work only towards “10% revenue increase in the next financial year”. Consider instead working for a company whose goal is to “improve our customer service so that 95% of our clients rate us highly”.
A second point here is that you need to find out – and possibly challenge – what senior colleagues’ views are of ‘value’ and ‘success’ in the context of the marketing and BD team. It’s no good being passionate about value your team can give by delivering incisive research on the marketplace in order to launch a new product profitably, if your CEO thinks that a great measure of success is how many events you run and the number of people there.
Thirdly, what performance indicators is it possible to measure, given the capabilities of your IT systems? I worked for a company where I wanted to measure a number of things at a corporate level, e.g. how many and what value services each top customer bought, customer churn and life-time value of key clients, amongst other things. A very few were in my gift to provide, but most were not. I ended up, therefore, with what I could realistically measure. It was a compromise, and only went some way to demonstrate the value my team were providing, but at least it was a starting point.
Asking the right questions
KPIs are different within different companies, or rather, the combination of KPIs that is right for each company can differ. Of course, there are some standard corporate-level measures which appear in most organisations, revenue and profitability being the most common. And for some companies, there are standard marketing level KPIs, such as brand awareness or number of tenders won. Simply, KPIs should help to measure how well we are delivering on our key goals and strategic priorities. And they should be kept simple – a handful of key measures, easily reported on and easily digested and influenced.
To understand what the measures of success should be at both corporate and marketing levels, it is worth asking and answering the following questions:
- If we picture success, what does it look like, both quantitatively and qualitatively? (corporate level)
- Which marketing and sales activities are most relevant to this success (indirectly or directly) and help us to win new clients or win more work from existing clients?
- For each activity, what would a measure of success be?
Clearly it is easier to measure quantitative things, so some thought needs to go in to how you can measure the qualitative side of KPIs.
Assuming data are available for your chosen measures, it is possible to construct some key performance indicators, at both the corporate and tactical levels, that are linked to what the business wants to achieve, that can be measured, and are built around those marketing and sales activities most likely to result in achieving those business objectives.
© Bluegreen Learning Ltd