What if you could make your current marketing budget compete with a phantom budget that is double or triple the size?
For those who haven't read the book or seen the movie, "Moneyball" is the old story (older than 10 years qualifies for "old" these days) of Oakland A's manager Billy Beane who brought Oakland to the MLB playoffs a couple of years in a row working with a budget that was approximately one-third of the top team's budgets.
He utilized a system called Sabermetrics that analyzed baseball statistics in a way that hadn't been done before. The premise was that measuring and selecting players via traditional metrics like batting average, RBIs, and stolen bases along with intuitive evaluations from managers and scouts was overvaluing players. Billy Beane, through Sabermetrics, realized that metrics like on-base percentage and slugging percentage correlated better to team wins than the traditional metrics and that intuition was overvalued. He thought he could get players who performed well based on these measurements at a cheaper rate and therefore do more with less money. That's exactly what he did and his team made the playoffs with a payroll of only $41 million vs. higher payrolls such as the $125 million payroll of the New York Yankees at the time.
So what does this have to do with marketing?
What if you could make your current marketing budget compete with a phantom budget that is double or triple the size? Marketing programs and content pieces are the baseball players and sales are the team wins. Relating a particular program (or player) to success is complicated and the role of the program can seem detached from the overall end goal.
How do you select and put your money behind the programs and content that will drive success? How do you build your arsenal with the best players at the lowest cost?
Start with "Moneyball." Are you using metrics that don't truly align with success? Or using just your intuition? Let's take an example. A particular white paper on your site happens to correlate very well with success. A large portion of eventual sales read this white paper at some point during the sales cycle. If you are measuring that white paper with metrics like traffic or leads, the white paper will look like it's performing poorly. If lead conversion is based on first or last touch and the white paper is in the middle of the prospect's "journey," it may not register any leads at all. To recognize its success, you would need to use nurturing metrics like repeat visits and engagement, and you would have to have attribution models that gave credit to all marketing touch points.
Marketing programs and marketing content are designed for different purposes. Some are designed to create demand, some are designed to capture demand, and some are designed to nurture prospects already in the sales cycle. The contribution of each to the overall success requires different metrics. What is the "on-base percentage" of the marketing world? It depends on the business, the product, and the objective of the marketing program or material. Paying attention to the metrics used to measure success may help your $42 million budget perform like a $125 million budget - well, the numbers are smaller but you get the point ;)
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Rob Cataford is Vice President of Customer Intelligence at BusinessOnline in San Diego, CA. Customer Intelligence uses customer and prospect data from many systems - web data, CRM data, lead nurturing data, sales data, etc. -and provides the in-depth analysis required for the optimization of marketing initiatives and customer experience. Rob has over 20 years' experience in data analytics. He has worked for several web analytics vendors and has assembled an in-depth knowledge of the data and analysis techniques required in the industry. His background includes undergraduate and Master's degrees in engineering.
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Wednesday, July 23, 2014