Last week I had a meeting with one of the largest spending attorneys in his state. When you look around his city and state, David is everywhere ranging from the web, billboards, TV, radio, social, print, you name it. David had literally become a household name in his community over the years and clearly created a strong strategy of both visibility and branding resulting in a dominant position within his market.
Earlier this year I met with another prominent attorney, let’s call him Barry, who also ran a very successful and effective marketing campaign in a number of major metros and just like David, used all the major marketing resources and also had great success. But there was one major difference between David and Barry and it all came down to one thing…
HOW THEY TRACKED THEIR RESULTS
In business it is said that you “cannot manage what you cannot measure” and when it comes to marketing, this has always been a problem – and it is only getting worse. Recent studies have shown that only 21% (or 1 in 5) companies are now able to fully measure marketing’s contribution to revenue growth. If the average business today in the US spends around 12% of their annual revenues on marketing, that is a big number to be guessing at. But for most businesses, that is exactly what they now do.
WHAT I LEARNED FROM BARRY
When I met Barry, he made nearly ALL of his marketing decisions based on his lead management system. First off; kudos to Barry since 82% of companies surveyed still largely use excel spreadsheets to support their tracking. Barry wanted to be better and his automation was an indication of that. So confident was Barry in his system that he pulled all data and made all marketing decisions based on that data. At least that is what he said. But when asked how his 545 billboards were performing relative to his other marketing vehicles, his reaction was subjective and not empirical “I know they work because when I pull them down, my business drops.” The same principle applies to his TV, radio, and all other outdoor ads for that matter – which combined constitute fully 80%+ of his current advertising budget. So how could he possibly know what is working and what is not? His response: “That is what our clients are telling us” as displayed in his lead tracking system. Naturally I wanted to know more so I went straight to the source of his data entry: his case manager.
When I first contacted Barry’s case manager, I asked him one simple question: “Exactly how are lead sources produced for your firm’s lead tracking system?” The case manager said that each new client is screened and data is entered into their system on their behalf by members of his team. When I asked a few of his team members how they asked for this information, a couple actually smiled and chuckled when responding “I just need something quick to fill in the blanks” and “most clients will say whatever first comes to mind.” In short, the data used to populate Barry’s system was based on case managers who wanted to quickly complete a form and from new clients who likely couldn’t even remember exactly what all really led them to Barry’s firm.
WHAT I LEARNED FROM DAVID
Unlike Barry, David is much more subjective in how he allocated his marketing spend. He told me that after years of asking customers how they got to his firm, he quickly decided that top of mind answers such as “the internet”, “TV”, and “I saw your ads” was not the information he needed to make informed marketing decisions. Moreover, David also said that he was kidding himself if he thought just one of these sources alone contributed to his marketing success. And David is not alone in this thinking. Only 6% of companies recently surveyed feel that their marketing measurements can accurately help determine their next best marketing actions.
“Most people today will see my ads on TV, billboards, or hear me on the radio for months and even years. They may then do a search and see my name again in online search, paid ads, and social and when they do, they will then check me out further on review sites to see if they want to call me” said David. “So to me, all of these elements are important and work together and even though we ask when they come in, I only really only pay attention to the trends and not the raw data.”
SO WHO IS RIGHT?
Being in the marketing and information management business for over two decades now, I have developed a couple of undeniable truths and one of them is that when it comes to data management; “garbage in equals garbage out.” We all want to make smart and informed marketing decisions but with the explosion of newer marketing mediums and ever-changing consumer behaviors, it can feel like a losing battle at times – just ask CMO’s at any major company. Nearly all are now expected to contribute to revenue growth yet less than 1 in 5 can even confidently claim to do it and worse yet, only 1 in 16 can tell you how they can do it better as a result of that data.
Adding to this problem is HOW we measure marketing information today. As I have previously written, attribution marketing is now making many traditional forms of marketing measurements obsolete. Far too many people who use marketing reports still think “linear” when it comes to marketing attribution and unless your marketing manager can clearly articulate these changes above, it will always put their position at risk. This can be clearly seen by recent studies that show that fully 30% of CMO’s (Chief Marketing Officers) are at-risk in their jobs in 2017. A lot of this has to do with strategic alignment as well. For example, we know from studies that organizations were marketing and finance are aligned typically have higher levels of growth yet in most companies today only 14% of CMO’s view finance as a trusted, strategic advisor.
So does this make Barry’s data analysis and decision making any better or worse than David’s? Maybe, and maybe not. Barry continues to maintain very high levels of spending on TV and billboards simply because that is what his marketing lead reports are telling him – even if that data is suspect based on sourcing alone. David on the other-hand is more likely to try new marketing mediums and does not make his marketing decisions based on data which he largely does not track any longer due to own discovery of inaccuracies and inconclusiveness.
In my own experience, marketing trends can be just as important as raw data but you cannot have one without the other. For example, nobody wants to know their house is burning down after they are surrounded by fire. That is why we have smoke detectors to help alarm us of little problems to put out before they become major problems. Some of the most successful business owners I have ever worked with over the years were the ones who saw the power of and took full advantage of phone books ads, TV ads, radio ads, online marketing, social ads, etc. long before their competitors did. If they were to have made these decisions based on their tracking data alone, they would have missed the first-mover advantage in marketing and would have been surrounded by fire before they got out of the house. Moreover, the most obvious alarms can come from a declining trend in marketing by sources (the smoke alarm) which cannot be supported without data to show the trend to begin with. In short, a “consistently” suspect trend line will still trend.
For example, we know what broadcast TV viewership declined by 10% year-over-year this past year alone. The TV advertisers will be the last to tell you this because they want organizations in the US to continue spending $73B+ on TV ads each year. And many will continue this spending simply because this is what had worked for them in the past – simple plausible deniability. But the smart ones are now smelling the smoke and many are now telling me that they are seeing declining returns in their TV ad spending. I have been seeing this as well from their own website analytics reports that in years-past would spike during TV ads and now barely even move. This is the power of trending and can be seen on many fronts yet only a few would listen…until now.
To this day I continue to work with Barry and David and respect them both. Each have very different approaches to tracking their marketing results yet both are currently very successful. What they can learn from each other would make them even stronger which is where I can come in. Successful marketing requires a number of key elements to be successful including: organizational alignment, market alignment, innovation management, and especially proper data management, trending, and decision making. But most of all it requires strong leadership and direction to make all of this happen.
Marketing today for most companies is becoming very different and dynamic and this is not your father’s Oldsmobile anymore – even if those who run the show may continue to think otherwise. And if 12% of your revenues are allocated to getting it right, it is time to start now…since most companies indicate they are still not even close.
If you need help in building successful marketing alignment and strategies for your business, contact us today!