According to Marketing Sherpa, 60% of large companies have already made marketing cuts or are expecting cuts. But we're better prepared in today's recession than we were back in the recession of 2001.
The reason for our increased preparedness, said Melin, is an improved focused on monitoring and measurement. Melin began by isolating long and short term measurements.
Long term measurements:
Key tool to protect budgets, justify spending, and set goals. Turn to benchmarks when you don't know what you should spend. Melin pointed to IDC's benchmark on a variety of variables. (NOTE: IDC figures in parenthesis.)
- Marketing budget as a percentage of revenue (6.5-7.5%)
- Insource vs. Outsource (39% People inside/61% programs outside)
- Awareness vs. Demand/Content (49% Awareness)
- Program dollars by sales headcount ($42,788/Sales HC - this is for $1B is sales or more. For companies that are $.5B to $1B it's $52,581/Sales HC)
Almost all of the CMOs in the room are using NetPromoter or formal customer satisfaction measurements. Allows you to understand the customer and what they're thinking, but also a customer measurement tool's value is allowing you to think strategically.
Polycom, like many organizations, has been shifting its processes from being product-centric to customer-centric. This required shifting a group of engineers to stop thinking about building things just because it's cool. At Polycom, they're hearing the customer voice through advisory councils (influential customers that are providing input into the engineering and executive team), formal customer research, and spending time with customers and understanding why they're happy.
It's not about putting the customer first. Melin believes it's about putting the customer in the center of your decision making process.
Polycom uses real time NPS (NetPromoter) snapshot/dashboard from Zuberance so that they can respond to events. This tool is available online for all their executives. Overall feedback of company and also specific product. They have found that product experience
Top NPS performers beat 75%. Polycom's score started out as 25%. The NetPromoter score is calculated from a combination of your promoters and detractors. A high score (Apple) means you have way more promoters than detractors.
Short term measurements:
Lead management metrics
Demand generation funnel: This is a funnel about sales and marketing. Understanding your lead funnel is critical as is being able to measure those leads all the way to close.
Marketing automation: Investment in process improvement often doesn't require significant budget but can be significant in return. If you don't have a way to measure ROI, now is the time to invest.
Economic uncertainty offers an opportunity for the continued rise of the CMO. You can spend wisely and deliver measurable results. Drive customer insight into the business. Focus on process improvements to drive more return.
Next to doing the right thing, the most important thing is to let people know you are doing the right thing.
Check out all coverage at The CMO Club Peer to Peer Summit.