There’s a lot of good stuff out there about marketing scorecards (see MarketingNPV.com for a number of good articles).
I’m not sure too many CMOs are reading these articles, however. Too often, marketing scorecards are overloaded with historical sales and marketing statistics, presented in mind-numbing detail.
Effective marketing scorecards strike a balance between measuring marketing ROI (the science) and reporting ROI (the art). Smart CMOs recognize that one piece of the marketing ROI puzzle is psychological — making other execs feel comfortable about how and where marketing dollars are being spent.
Reporting marketing ROI isn’t a “fill-in-the-blanks of the template” exercise (which too many scorecards appear to follow). Effective scorecards tell a story. And although there’s no template, there are common elements (or chapters) in good marketing ROI stories:
- Spending. Where did the money go? Marketing scorecards should show senior execs where the firm’s marketing investment went. What products did we invest in? Which markets? Which LOBs? Which customer segments? What did we produce (i.e., marketing assets) with the marketing dollars we spent? How much did we spend on lead generation vs. brand equity vs. marketing productivity?
- Results. What did the spending get us? CMOs shouldn’t confuse marketing ROI reporting with sales reporting. Marketing scorecards shouldn’t be detailed reports of sales by LOB, geography, etc. This chapter is the flip side of chapter one — what are the trends in brand equity, lead gen, sales, and operational effectiveness.
- Context. This is where the story transitions from science to art. Why did what happened happen? How did we do against expectations — i.e., budgets, targets, and the rest of the industry? With which customer segments did we achieve better (or worse) than expected results? How did the investments we made last year (and the year before that) impact last quarter’s results? How is the channel mix changing and what does this mean to our business? What adjustments in marketing investments do we need to make going forward?
Above all, effective marketing scorecards are documents of influence. They don’t just tell what happened — they tell why and what it means. (And they don’t take 40+ pages to it).