Can you prove to executive management that your marketing communications programs and strategies are performing? It's a simple question. Finding the answer, however, is a challenge.
In today's healthcare marketplace, constantly redefined by increasing competition, tighter budgets, more demanding customers and greater pressure from senior management, it's more critical than ever to back your marketing decisions with proof that they work.
To benchmark business-to-business marketing measurement practices, Ketchum Pittsburgh's B2B group conducted a national survey of 480 marketing and communications executives. We found that although it's common sense to document results - and more discriminating CEOs are demanding it - there's still greater focus on doing the marketing than on proving it works.
Which 10 percent?
Nobody knows who first said it, but it is oft quoted: "Ten percent of my marketing is working well; I just can't figure out which 10 percent." Frequently, when executives are asked which of their marketing efforts is effective, they pose as many questions as they offer answers.
Still, some constants emerge. For instance, the survey found that 90 percent of executives do some kind of ROI assessment. Of this group, nearly two-thirds track increases in sales volume and measure the number of leads generated by each marketing strategy.
More than 50 percent of those surveyed said tracking media impressions is important too, despite the lack of evidence that this is an effective ROI tool.
Marketing executives also rely on several communication tools to measure ROI, including:
- news releases - 95 percent
- Web site - 88 percent
- sales literature/brochure/catalogues - 85 percent;
- direct mail - 77 percent;
- trade shows - 76 percent; and
- feature articles in local newspapers - 71 percent.
Future Trends
As we approach the new millennium, here are some ROI trends to anticipate:
The Internet is essential: A few years ago, Ketchum did a Web survey to measure corporate usage. Back then only half the companies surveyed had a Web site, today 88 percent do. The future of the Internet as a marketing tool is solid as 84 percent of the companies surveyed that are online planning expect to increase their usage.
In spite of this growing Web presence in marketing plans, only 60 percent track Web site hits. This is a key ROI opportunity often missed.
Traditional Tools Won't Become Passe: Marketers will continue to rely on more of the same ROI tools they've used throughout the years. At least 80 percent of the executives surveyed plan to maintain or increase their use of their current ROI tools.
Even in the area of corporate downsizing, few companies are applying the brakes on marketing and most are not planning to cut back on their use of any ROI programs. Notable exceptions include a handful of companies scaling back their trade show marketing (14 percent), specialty advertising (11 percent) and trade magazine advertising (10 percent).
Increasingly prevalent in reaping marketing value will be partnerships, say 67 percent of executives who presently use them and plan on doing more in the future.
Market Research Role Will Expand: In the next three to five years, expect to see an increase in market research. More than 50 percent of those who rely on research currently plan to use more in the future:
- 57 percent will increase their reliance on research to determine market strategies;
- 54 percent will expand their use of research to evaluate marketing, communications or advertising ROI; and
- 50 percent will conduct more proprietary promotional research to generate publicity.
The Bottom Line
You are not likely to see any increase in your budget without your ability to demonstrate your marketing worth to upper management. ROI can no longer be a distant goal. It must be thoroughly incorporated into your planning process and considered a key barometer for a well-executed effort.
More importantly, the criteria for measurement must be discussed and agreed upon by top management at the outset. If success isn't defined early on, how will you know when it's been achieved?
With more planning, systematic measurement, defined standards and research, marketers will feel less frustrated and more confident in their campaigns.
Lloyd Corder is VP of marketing research and leadership communications at Ketchum's Pittsburgh, Penn., office.
Mark Deasy, VP and Jerry Thompson, SVP and director also contributed to this article.
Evaluating ROI
When it comes to assessing ROI, there's plenty of room for improvement. More than 70 percent of marketing executives in the survey believe they need to do a better job of determining ROI. Top areas of improvement include:
- Better planning. Only 61 percent of executives have a plan with predetermined, measurable ROI goals.
- Consistent evaluation. Only 17 percent evaluate every marketing project and 11 percent don't evaluate their programs at all.
- Universal standards. Nearly half (44 percent) couldn't define "good" marketing ROI, suggesting a need for industry benchmarks.
Source: Ketchum