A recent CMO magazine article called Connect the Dots refers to a survey CMO magazine conducted with 350 Chief Marketing Officers and CEOs about what they believe to be the most important marketing metrics – IOW, how should the marketing department’s success be measured? The top three responses shouldn't surprise anyone in the field of marketing – whether B2B (like most every HR service provider) or consumer marketing:
1. Customer Satisfaction (90%)
2. Revenue Growth (87%)
3. Customer Retention (80%)
What was the least important? Brand Value Calculation (22%) which, by the way, any marketing executive that even mentions the phrase “brand value calculation” should be relocated to the shipping department.
What’s most interesting about these survey responses is how obvious it is that the CEOs and CMOs surveyed primarily represented consumer marketing companies – not B2B.
How do we know this? In consumer businesses, it is not uncommon for marketing and sales to have near 100% control over the entire purchasing cycle, whereas in most B2B companies, marketing has limited control over the actual “purchase” which tends to be the responsibility of sales. So, if you were to ask marketing executives at most HR service providers how they feel the marketing department’s success should be measured, I doubt that “customer satisfaction,” “revenue growth,” or “customer retention” would make the top three.
For example, at Starbucks (one of companies mentioned in the CMO article) and other consumer marketing companies, marketing typically has control over everything to do with the product – what they are, how they taste, what they are named, how they are priced and packaged, etc. – as well as the store design, store location, number of coffee servers behind the counter, advertising and promotions. On the consumer side of the business, there is not an in-house or field sales staff that calls on consumers to pitch the benefits of coffee and why you should buy Starbucks.
Compare this to most B2B industries like the HR space where marketing has some “involvement” (or at least they should!) in product design and service delivery but rarely has operational control. So in theory, if the company has a HR software product that is poorly designed, has bad functionality and terrible tech support, the greatest marketing in the world will have no lasting impact on customer satisfaction, revenue growth, or customer retention.
Now, are all HR vendors structured in such a way that marketing has limited or no control over these operational areas? No, there are certainly exceptions but most do not and therefore should not be measured against something they have no control over.
So while we applaud CMO for their article, they (like most popular business and marketing trades) often ignore the subtle but important differences between consumer and B2B marketing.
So what metrics should be used to measure how effective marketing is in the HR industry? Well, we’re not recommending any specifics because they will vary for each company. But we do strongly advocate that marketing (and media relations which falls under the responsibility of marketing) be tied to some sort of measurable outcome.
At the very minimum, marketing executives in the HR space should be measured on how many qualified sales leads they generate and the cost associated with generating those leads. Yes, things like media placements and brand awareness are important but they are all tactical components of the broader marketing strategy – i.e., generating qualified sales leads. Everything else is secondary to generating leads.
So while every HR vendor’s marketing department should at a minimum be doing the following...
• Sending regular press releases
• Media relations
• Direct marketing
• Event participation
• White papers
• Byline placements
...the marketing department’s success should not be measured specifically against these tactics such as how many press releases were sent, to how many journalists, how many media pickups, etc.
It's a great thing for marketing executives to finally be thinking like this and getting away from the fluff that most PR firms and ad agencies lead you to believe are important like how large your media distribution list is, the likeability of your ad, media placements, etc.
While these are all important, they are tactical and only play a supporting role in achieving the broader more strategic marketing / company goals which are generating qualified leads, growing revenue and servicing the heck out of customers. Or, as Sergio Zyman, former chief marketing officer at the Coca-Cola Company says:
“The purpose of marketing is to sell more of your product [or service] to more people...”