Jim Lenskold and I met at a board meeting for the Marketing Accountability Standards Board (MASB). It is the world’s only board that is successfully developing Marketing Standards, like the Financial Accountability Standards Board (FASB) did years back.
It was there we both discovered our common passion to help C-level executives understand how define, measure, monitor, and optimize marketing ROI. This aligns with the MASB mission: To establish marketing measurement and accountability standards across industry and domain for continuous improvement in financial performance. I know it may be a mouthful, but in short, it means demonstrating marketing’s business contribution to continuously improve performance using common language and definitions.
Jim, you played an important role at AT&T back in the day. Was there an experience you had there that inspired you to become the industry thought leader you are today?
Response: Yes, early in my career as a marketer, the finance organization introduced ROI requirements. The initial framework did not work for Marketing so I lead the push-back. Fortunately, I had a great counterpart in Finance who helped balance financial integrity with decision support. From that point on, marketing ROI became a powerful tool to guide strategic and tactical plans.
You wrote a marketing book the American Marketing Association Foundation considered a top 5 of 2004 called “Marketing ROI.” What do you believe has changed since you first published it? Are the principles still constant even with the proliferation of the Internet and the other new media channels available?
Response: Fortunately, the book outlined core principles and practices for assessing and optimizing marketing return on investment that still hold true today. While media channels and tactics have changed since that time, a good marketing ROI framework works across all forms of marketing, regardless of how the message is delivered. The need for multiple touchpoints to lead buyers through the journey to revenue generation remains central to marketing optimization. The biggest difference today is the improvement in data and automation that improves the ability to run more measurements and advanced analytics.
Black Ink ROI recently conducted research with the F2000, including some very notable brands such as Walt Disney, Fruit of the Loom, Toyota, Stanley Black and Decker, Mutual of Omaha, Frito-Lay, Cleveland Clinic, and more. The chart below demonstrates that 3 out of the top 6 KPIs C-level executives require, marketing is to demonstrate their fiscal contribution. Yet, when asked if marketers can deliver these today, there was a very large percentage gap between requirement and their current ability. Only on one KPI did marketers achieve a higher ability versus need, and it was based on tactics (e.g. +6%). What do you make of these results? Expected, surprised?
Response: This is great insight. I’m not surprised by the research results but I experience this challenge every day. What does surprise me is how slowly the industry moves to close these gaps. Measuring marketing’s contribution to revenue, profit and ROI have been high priorities for many years now. There are tools, techniques and best practices that help companies manage and maximize financial outcomes.
How then can companies do a better job to help close this gap?
Response: The most significant barrier to adoption of marketing ROI practices is the culture. The gap between the need and the ability to deliver results can appear significant so I recommend building capabilities in small increments. Take steps to introduce new measurements or metrics, run ROI scenarios for select campaigns or run pilots for new processes.
You often engage with cross-functional teams at very large global firms. What learnings can you share about their ability to be more customer-centric?
Response: This is certainly a priority for large firms that have many business units and relationships. The most advanced companies have worked to establish a single view of the customer, understanding their total value, their contact history and their needs. Other companies work toward integrating, or at least coordinating, marketing campaigns. While marketing optimization tends to start with campaigns, it ultimately delivers even more returns at the customer level.
Being a native Jersey guy, how do you feel about the New England Patriots having 11 past/present Rutgers’ players on their roster?
Response: As a Rutgers graduate, we are not quite competing for national championships so we have to take pride in every accomplishment of our football team that comes our way. Our players on the Patriots make great contributions and Coach Belichick’s high regard for RU players says a lot about the quality of players. And as a NY Giants fan, I’m not bothered too much by the Patriots success in four of their last six Super Bowls.