Since the beginning of time, it seems marketing teams have not gotten along particularly well with sales teams, and vise versa. The last several years have highlighted that marketing teams are struggling to get a “seat at the executive table.”
It’s baffling how a function that has existed for so long and is so critically important to the success of an organization struggles so much to be understood and appreciated. Having thought about this for several years, I think the underlying reason for this is that marketing is difficult to measure.
Two Schools of Measurement
I’ve witnessed two schools of measurement here. One school focuses on measuring that which is easy to measure. It highlights impressions, media mentions, audience exposure, ‘likes’, ‘follows’, etc. The problem here is that while these are easy to measure and report on, they mean nothing.
At best they correlate with success, but they certainly don’t focus on causation. The senior level of these organizations understand that these measures don’t really mean anything and as a result they ignore too much of what excellent marketing brings to the table – and experience some tremendous opportunity costs.
The second school realizes that what is easy to measure is rarely valuable and either ignore measurements all together or focus on measurements they don’t directly connect to. Measurements like sales and new customers are important to know, but they are the result of many factors, not just marketing.
What Should Be Measured
At the end of the day, marketing is responsible for two important variables:
- The lifetime value of a customer,
- The cost of acquiring a customer.
When your marketing is working, lifetime value increases and the cost of acquiring customers’ decreases. Every expenditure or action marketing takes should be viewed through the filter of impacting these two measurements. Stay tuned for next week’s post where we’ll share some of the tactical measurements that lead to these results.