Paul Magill and Christine Moorman shared a roadmap for marketing metrics in April’s Harvard Business Review. Their overarching aim is to elevate the way marketers look at metrics. The authors don’t want marketing assessed only at the campaign level — “did this ad campaign work?” Better to focus at higher levels, “what is marketing delivering to the enterprise?”.
Roadmap For Marketing Metrics
The authors put their roadmap at five levels. From the bottom up they list 1) Campaign, 2) Sales and Satisfaction, 3) Brand, 4) Capabilities, and 5) Enterprise. (As in organizational level — not the Star Trek Enterprise, unfortunately. Given that Star Trek’s Federation doesn’t really use money, I’m guessing the Federation’s metrics are very different. Thinking about it I’m not sure the Star Trek writers have given much thought to the use of metrics in the distant future. What an omission.)
I like the idea of levels but it is a challenge to specify a hierarchy for all firms. It seems that brand will be central to some marketers’ lives, it may even be an enterprise-level concern. On the other hand, brand will be pretty minor to some others. There are surely different roadmaps. The idea of levels is helpful but a real challenge exists in fleshing them out.
The Precise Metric Matters
A small negative is that I was concerned about some of the looseness of the metric descriptions. If you are measuring brand then ‘brand affinity’ and ‘brand equity value’ are not really interchangeable. I would certainly say that brand affinity doesn’t show, “what’s the value of the brand asset?’, despite this being the professed aim of this stage of the roadmap.
Metric definition is a challenge in the CMO survey which drives some of this work. For example, customer profitability seems to be portrayed as equivalent to customer lifetime value. Yet, these are very different things. Customer lifetime value aims to overcome the problems in customer profitability but in doing so adds extra challenges of multiple periods and requires data/predictions from outside accounting records.
When they don’t do so, why are people not adopting these measures? This differs too by metric. Customer profitability may not be used because it is too financial accounting driven and typically not that useful to marketers. Customer lifetime value, on the hand, is theoretically better for marketers but may be too complex for some, especially because it involves predictions. The challenge of the two metrics is very different. These critical differences speak to reasons for (lack of) adoption.
CMOs And Metrics
Marketers’ use of terms, in general, is messy and this seems to come from the top. That said, I can appreciate the challenge for those running the CMO survey. When surveying CMOs, and marketers more generally, you either a) adopt their looseness in your descriptions of metrics or b) you seek to lecture CMOs on what they are doing wrong. Of course, I believe in the latter option. As a professor, I’d argue that a good lecture is always needed. (Even in these days of flipping classrooms, letting the students control things, and being funny and engaging). Still, I guess it would be harder to get a CMO’s views if you started by shouting at them that they were being sloppy in their use of metrics. (Think Michael Sheen playing Brian Clough in The Damned United). For example, “I know you are doing everything wrong — now tell me what you are doing” might not get a great response rate from CMOs.
Reach For A Higher Level
My writing here risks missing the big-picture point. The authors seem right to me in pointing out that marketers get stuck at the lower-level metrics. Marketing is seen as tactical. It is about delivering the immediate win. This financial accounting-driven view of marketing sees marketing as short-term. Yet, this isn’t really where a lot of the value of marketing comes from.
Why do marketers fixate on the lower-level metrics? Such as campaign measures for internal marketing reports and sales/satisfaction assessments when talking to the C-suite? Why do marketers tend to underplay brand and capabilities measures?
We think the answer lies partly in marketing getting mired at the sales/satisfaction part of the roadmap. These metrics can attract both scrutiny and skepticism from members of other business functions… As a result, marketing can invest in extensive and ever-deepening efforts to support and justify these measurements….Magill and Moorman, 2022
The authors’ big-picture message is an excellent one. In conclusion, do not get mired in the weeds. Marketers look-up. Reach for a higher level of metric.
For more on marketing metrics search much of this website including my popular marketing metrics pages see here.
Read: Paul Magill and Christine Moorman (2022) Do Your Marketing Metrics Show You The Full Picture?, Harvard Business Review, April 4, 2022