Aussie marketers need to get harder on the numbers
Aussie marketers understand the importance of customer engagement, perhaps more than many of their overseas counterparts.
It’s one of the findings from recent global research from The Economist Intelligence Unit, sponsored by Marketo. When asked how their marketing was measured almost a quarter of respondents from Australia and New Zealand (ANZ) indicated ‘customer engagement’ was a primary indicator, compared to just 15 percent in the rest of the world.
It sounds like an encouraging finding. You can read it as a sign that here, more than anywhere, we understand the importance of building a firm relationship with customers, nurturing them to the point where they make a purchase, perhaps increasing their intending spend in the process.
And we understand how new software tools can help achieve this. Two thirds of respondents in ANZ said they were using technology to engage customers and build advocacy and trust. That compares with just 58 percent in the rest of the world.
So, does this all really mean we have a greater understanding of the importance of building relationships with our prospects? Perhaps. But it doesn’t seem likely does it? After all, there’s a lot of marketing nous in North America and Europe. Can we really claim to understand the importance of customer engagement more than they do?
Could it be, instead, that in other parts of the world they recognise that trust, advocacy and engagement, important though they are, are not metrics your CFO is going to love. The argument that prospective customers are more engaged with your company won’t hold much sway if there isn’t a subsequent upswing in sales. Those holding the purse strings might even be concerned that you are putting more resources into customer communications, without any idea of the eventual impact on your bottom line.
That’s why elsewhere in the world revenue impact is given by many as a primary measure of marketing effectiveness. Around the world a quarter of marketers say it will become a primary marketing measure in the next few years, but in ANZ only one in six thought that would be the case. Of course, ROI would be a better measure, yet. Sadly less than 5 percent of marketers in this part of the world agree with me.
I think this highlights an issue that many local marketers face. They are shying away from the hard metrics that drive a business. We place customer engagement ahead of revenue impact, and few see budget efficiency as a primary measure of marketing effectiveness.
Winning over your finance chief
Without accepting harder measures how can ANZ marketers expect to increase their spend on technology. And without technology how can they hope to communicate effectively using social, mobile and email marketing. For those planning to invest in these areas I wonder how many of them will present their intention to their finance chief, supported by fluffy metrics that don’t justify the expense.
In short, if you believe higher levels of engagement will have a positive impact on revenue, work out just how much extra you’ll make, and use that as the business case to support the investment.
Part of the problem is, of course, how do you make the connection? If you invest in social marketing, for example, you can set an expectation on the reach of your messages, but how do you know how many followers will eventually buy from you – and will they spend more than they would if you had reached them through other channels?
You’ll never know the answers to questions like that whilst you apply single purpose solutions to emerging channels. Instead, you need to focus on tools that can help manage your relationships across multiple channels, whilst providing sufficient tracking data to see the final impact of your actions on your company’s bottom line.
You should know the paths customers take to the point of purchase. Did they engage on social media, visit your website, attend events, download whitepapers or respond to email campaigns? Tracking the channels used by various customer types will build a clear picture of who are your most important customers, in terms of lifetime value, and the most cost effective way to get them to the point of purchase.
Talking the talk
With that sort of information on hand you start speaking the CFO’s language. Picture him (or her), reclining on his comfy chair as you explain how you can continually refine your marketing effectiveness, whilst providing a realistic forecast of future sales. He – or she – will splutter in excitement as you explain a process that could see other resources, throughout the business, effectively allocated based on these deeper insights from the marketing team.
Yet just 14 percent of ANZ respondents said marketing resource management was a technology they would be investing in over the next few years.
There’s no doubt that technology will transform the way marketers work over the next few years. Marketing automation – cited as an area of investment by just 13 percent of respondents - will enable more personalised engagement with customers and prospects, with deep analytics helping to continually refine processes, messages and audience targets. But it’s going to be difficult to prise money from the CFO’s grasp without taking on board top-line metrics that have a material impact on your business. Arguing that you are building greater customer engagement just isn’t going to make the grade.