Managing and Measuring Marketing in Changing Environments

The prime responsibility of Marketers is to generate and maximize sustainable profitable revenue for the business while minimizing the costs and the use of assets. Therefore, Marketers must be aware of the changing needs of customers and adapt their product or service and its delivery to satisfy them. Marketers must also have the skill to successfully manage and direct the marketing staff to anticipate and satisfy customer demand profitably.

Marketers must at all times look in two directions – inward into the company, and outward to the market. Internally, Marketers need to undertake a SWOT (strengths, weaknesses, opportunities and threats) analysis of the business, and there should also be a full marketing audit to establish the level of corporate marketing knowledge and to identify gaps. Externally, effective Marketers will assess the market environment by analyzing the political, environmental, social and technical aspects that affect customer demand. Marketers must also be prepared to ask the awkward questions - challenging accepted perceptions and assumptions, and must continually question everything about the process of anticipating and satisfying the market profitably.

Ultimately, the only way to know whether the marketing function is efficient and effective, and whether the CMO has achieved the objectives, is to measure the results. Every marketing action should be examined on its contribution to the overall marketing objective, and every marketing investment of time and money must be evaluated on how it will contribute to the business.

Marketing performance must be monitored by marketers using a measurement system that is based on key performance indicators and their specific revenue drivers, so that marketing actions may be adjusted to meet changing circumstances.

In seeking to select the right measurements metrics and benchmarks, marketers first need to identify the company activities which drive the cash flow. These cash flow drivers will originate from the company business plan, and may be based on high profit margins, and the rapid turnover of inventory. Cash flow drivers also result from the sources of cash such as customer acquisition and retention.

Marketers then need to identify those marketing activities that ultimately affect the company cash flow drivers. Each marketing activity identified as affecting a cash flow driver requires an outcome metric or measurement to enable the evaluation of how well the intended results were achieved.

Marketers have a large number of potential measurements and metrics available to them including brand awareness, customer satisfaction and website statistics, yet CEOs and CFOs are generally more interested in financial data such as revenue and costs, which are comparable with other areas of the business. Marketers must be able to demonstrate to the CEO and senior management, not only what they contribute to the business in terms of profitable revenue, but justify how they used the assets and investment efficiently to achieve it. Choosing the relevant measurements metrics and benchmarks will enable them to do so.