There’s been a lot of talk over the last year or so about ‘return on investment’ particularly in the field of marketing and business development. One measure – sales revenue – is an easy measure of success. It is much harder to both demonstrate and realise value from other activities.
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. This article considers some ways in which you can measure ‘success’, in the context of marketing and business development.
The starting point
Firstly, some questions to consider:
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 set up my ideal dashboard with key measures all displayed on one page and then went to talk to the head of IT and the finance director.
The problem I came up against was two-fold:
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:
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.
To give examples of the possible answers to each question:
- Small-scale seminars: number of people attending with whom we have a follow-up meeting; number of people who signed up to receive articles on the topic.
- Articles: increasing the number of published articles from 2 a year to 4 a year; ensuring that at least 2 of those are related to this service.
- Improving each interaction with clients: mapping how we interact with them and when and, using a project group and research, ensuring that each point is ‘first class’, as perceived by our clients.
- Meeting with all of our top 20 clients in the next 12 months and identifying ways of enhancing the relationship (which might or might not involve more work from them) for 5 of those clients.
Assuming data are available for the above, 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.