As direct marketers vie for a more strategic position at the executive table, they have a mighty weapon: numbers.
Deep inside marketing databases lie the answers to some of the most important questions being asked in DM departments today: How many customers do we have? Are they the right ones? When can we expect to have more like them?
GIVE ‘EM DATA
Here’s a smart move for DMers — and one that’s possible thanks to the technology you use every day. Mine your databases for essential data the CFO, CMO and CEO would love to see. Then build digital dashboards that display that data in an easy-to-read visual format. Allow the appropriate people to access the underlying data and feed it into their own measurement tools.
The following five dashboards can be created by DMers with relative ease:
- Marketing investment ROI
Measure your ROI progress and manage financial expectations proactively. Build an ROI dashboard by plotting investment and revenue on a time chart. Insert indicators that signal when ROI should be expected, when it’s been met and by how much. Include a function that allows your CFO to readily see the impact of subtracting investment dollars from the analysis. This chart helps management understand when to anticipate payback from marketing spending.
- Churn-LTV index
While it’s valuable to know how many customers a company has lost and gained each month, the real revenue indicator is the lifetime value of those customers. You can tell the larger story on attrition by calculating the average and sum values of lost customers and the same for new customers. Apply the difference, whether positive or negative, to an appropriate LTV model, and build a dashboard indicator in the form of a traffic light. Green means your CFO need not worry about attrition. Yellow would signal that attrition may lead to financial loss. And red is definitely a cue to take action.
- Channel ROI by product
Does your CFO or even your CMO understand if marketing and sales channels are being strategically utilized? Build a 3-D bar graph by plotting the average amount of revenue received from each dollar spent on marketing for each product group. Compare that to the total cost of marketing by channel and by product. Then measure the resulting ROI.
- Campaign performance indicator
CMOs always should be prepared to answer how current and recent campaigns measure against expectations. Compare impressions and response and conversion rates to expectations. A traffic light indicator can alert a CMO to trouble spots as well as successes.
- Segment profitability report
Companies spend significant dollars segmenting their customer audience. Tracking how marketing performs against those segments is critical. To gauge this, create a 3-D cluster report. Cross-reference customer segments with key financial tracking information.
MICHAEL TALBOT is chief technology officer at Alterian, Chicago.