The typical marketing organization is not set up for proper business reporting. This leads to frustrations, mistrust, and the undervaluing of marketing in general. Here are 7 essentials for ensuring your marketing reporting matters, to prove the value of your work and investment.
1. Focus on #1 Metric
Marketing typically measures three things: input, throughput and output. Input is spend. Throughput is activities such as social posting or email campaigns. Finally, output is the number of shares or opens, etc. But the most important metric – outcome, or profit and loss – is often played down or missing altogether. Marketing reports must include outcome to answer the most important question: how much did marketing contribute to the financial bottom line?
2. Give Financial Details
Standard marketing reports are often misleading, and often “low” and “slow.” Low means low on detail. Too many reports focus on media spend, trade shows and similar line items. But they do not focus on the outcome of campaigns: profit and the bottom line. For marketing to remain relevant and valued, it must give ever greater details of its financial contribution to the enterprise.
3. Real Time
Marketing reports can also be “slow,” in that they focus on information from the past: last month, last quarter, even last year. The industry changes a lot from year to year. Marketing reports are not in the frequency that business happens today. They’re about the rearview, rather than real time. Business today happens in real time, and it’s essential that marketing reports are up-to-the-minute.
4. Looks Forward, Not Backwards
Another aspect of marketing reporting that’s changing is the increasing importance of looking forwards, rather than backwards. Take for example weather reports – they focus on today and the future, not the past. Yet most marketing reports are the equivalent of reports about last month’s weather. Marketing forecasting allows you to solve problems up front and in advance, rather failing and fixing afterwards. Businesses that continue to focus on the rearview, will fail.
5. Invest in the Best
With more than 60 marketing channels today, marketing is increasingly expected to act like mutual fund managers. Predicting which activities will be the most profitable is similar to portfolio management. Similarly, marketers increasingly need to say ‘we have done a lot of research on various opportunities and here are the top ones. We expect this amount of return on these investments by this time’. For example, we believe social media will give us the highest ROI in the long run, and we should invest most there.
6. Value for Investment
Businesses exist to generate a profit, to get something in return for their investments. Money is the metric of business success, not open rates. CFOs are ever more likely to ask “I gave you money, what I am getting in return?” Take for example another area of business: manufacturing. A CFO might give $1 million for a new printing plant. Why? To print more brochures, more efficiently, at greater profit. In this same way, marketing should create profitable demand. A CFO does not care about open rates, but rather wants to know how much money did marketing contribute to the enterprise bottom line?
7. Integrate the Enterprise
The new era of better marketing reporting will involve many areas of the enterprise. These include marketing, finance, sales, analytics and more. It’s essential to gather data from these disparate areas, and collate them into an executive level view. New software technologies make this possible.
Conclusion – Learn from the Past, Predict the Future
The two most important aspects of marketing reporting – from this date forward – will be these. First, marketing reports should analyze past decisions, and seek to validate them or not. Which efforts succeeded, and which did not? Second, marketing reports must increasingly focus on forecasting the future: these are the campaigns that we forecast will be most profitable, and we expect a return of X percent by Y date. Companies that embrace these changes will lead their markets and prosper.