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In this month's issue: Methods of Measuring Marketing ROI
October 2005 
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News & Events

Consulting to Management review of Marketplace Masters (PDF), September 2005 (C2M site)

Suzanne Lowe spoke at the Legal Sales and Service Organization Raindance Conference in June 2005. See the LSSO Web site for details on the conference.

CMO Magazine article Perception is Reality June 2005

Kennedy Information's Consultants News article How To Adjust To Marketplace Shifts Successfully (paid subscription required, see July CN archives) July 2005

Recent Issues

  • Does Your Firm Measure Up? September 2005
  • Don't Bore Me With Your Blog August 2005
  • Consulting Case Study on Account Planning and Relationship Management Programs July 2005

    You can order Marketplace Masters from Barnes & Noble, Amazon, or your favorite online bookseller. For bulk sales please contact CEO-READ.


    The Marketplace MasterTM is a monthly email publication on professional service marketing from Expertise Marketing, LLC.


    Greetings

    In last month’s newsletter, we introduced the topic of measuring marketing initiatives and its challenges for professional service marketers. This month, our focus is on what firms decide to measure, and how they do so.

    As I got started, it was tempting to call this month’s article “ROI Measurement Shortcuts” to get your attention. Indeed, when I talk to professional service marketers, many tell me that they are looking for a quick way to measure ROI. I would suggest the issue is not really about speed or ease of measurement. I think marketers are looking for measurement techniques that can deliver tangible results to their internal clients – the professionals of the firm.

    On another note, Patrick McKenna, co-author with David Maister of First Among Equals, has reviewed Marketplace Masters in the September 2005 issue of Consulting to Management.

    Suzanne Lowe

    Suzanne Lowe
    Author, Marketplace Masters: How Professional Service Firms Compete to Win
    President, Expertise Marketing, LLC


    Methods of Measuring Marketing ROI

    Some people say that dreaming up creative, savvy marketing campaigns is a right-brained activity – the very essence of the “fun” stuff about marketing. But professional service marketers know that they are also expected to oversee the very left-brained activity of measuring the ROI of their efforts. Practitioners are applying growing pressure on marketers to provide evidence that their marketing investment is worth it. And, not only do marketers have to be accountable for marketing expenditures, they also need to prove that measurement itself is even feasible. No wonder that getting early results from ROI measurement is so important!

    "It’s clear that professional service marketers are keen to prove that measurement itself is a worthy activity. It’s also clear that most have chosen to succeed at measuring mostly tactical marketing activities."

    This imperative to get quick results influences the types of initiatives that professional service marketers choose to measure. It also influences the way they measure.

    My sense is that, in general, marketers start out by focusing on tactically well-defined internal and external marketing initiatives so they can prove to their firm’s internal clients that the very act of measurement is a good idea. Then, as they develop more expertise in measurement, they move on to measuring more strategic initiatives.

    Results of a recent survey

    At a recent presentation to an audience of professional services marketers, I asked them to respond to a quick survey about how they were using technology to measure the effectiveness of their marketing programs. While this is by no means a scientific sample, it still provides some insight into what other firms are doing and may get you thinking about where your firm is directing its measurement efforts.

    The bulk of what people were measuring falls into what I call the “internal” category – that is, inside-the-firm initiatives that support a firm’s endeavors to attract and retain clients. As you’ll see below, many of these internal measurement initiatives are made possible because of a firm’s technological infrastructure (e.g., contacts management databases, spreadsheets and intranets).

    Internal measurement initiative examples:

    • Client Relationship Management (CRM).
    • Business Intelligence (BI).
    • Sharing knowledge within the firm – some use internal blogs to share best practices with colleagues.
    • Tracking business plans – some have automated systems to track goals, activities, schedules, and responsible parties. Management uses them for performance reviews.
    • Creating a detailed database of the skills of everyone in the firm.
    • Performing 360 evaluations.
    • Tracking sales pipelines.
    • Improving the effectiveness of the sales process.
    • Creating reports on each practice’s financial performance.
    • Online benchmarking.
    • Creating dossiers on client companies.

    Some of the marketers in the audience indicated they use a variety of technologies to measure the actual marketing initiatives themselves.

    External measurement initiative examples:

    • Capturing data by requiring clients and prospects to register for webinars and events – this was one of the more popular externally focused methods of measurement. Some firms maintain copies of webinars permanently on their Web sites so clients have 24 x 7 x 365 access, as long as they register their data.
    • Opt-in email lists – not only is it possible to track who subscribes, you can track the open and click-through rates of every email you send.
    • Extranets – available only to clients, these require a registration process.
    • Web analytics – firms can learn the most popular items clients are viewing and downloading on their Web site, what key phrases they entered into search engines to find the firm, and what other Web sites are driving the most traffic to the firm’s site.

    Of course, professional service marketers are measuring other tactically well-defined external initiatives, even if they don’t use technology to do so. For example, many are measuring prospect inquiries from activities such as advertising, PR campaigns, firm-sponsored conferences or speeches given by the practitioners.

    You’ve measured the low-hanging fruit. Now what?

    It’s clear that professional service marketers are keen to prove that measurement itself is a worthy activity. It’s also clear that most have chosen to succeed at measuring the low-hanging-fruit – and mostly tactical – marketing activities like those cited above. This is entirely understandable.

    Thanks mostly to those professional service marketers who are “breaking measurement ground” for future marketers, I predict that professional firms will soon begin to measure more strategically robust marketing initiatives, such as the following:

    • How are we doing at defining and identifying the most strategically appropriate clients?
    • Beyond the simple measures of revenue generated, who are our most strategically important and loyal clients? How are we doing at retaining them?
    • How are we doing at increasing our revenues from these most strategically important and loyal clients?

    I believe technology will indeed play a part in the heightened profile and sophistication of marketing measurement. For example, looking at the list above, it’s clear that a firm’s financial systems, when linked to its client relationship management platform, will help the firm define and identify the most strategically appropriate clients, and keep track of the firm’s “share of wallet” with those clients. In addition, data mining practices of client behaviors will help reveal those clients who are true evangelists.

    Our upcoming research study on measuring the ROI of marketing in professional firms will shed further light on the complex, strategic measurement techniques that firms choose to use. In next month's issue, we’ll provide specific details about how to participate.

    For now, marketers should aim to incrementally push the envelope on their firms’ investment in measuring marketing’s ROI. Start tactically, gain some early measurement successes, and then urge your practitioners to invest in more strategically meaningful techniques.


    Talk Back

    Betsey Lynch, who has led marketing in several offices for large service firms, shared her thoughts on last month’s article on measuring marketing ROI.

    “Thank you for your article on measuring marketing ROI, Suzanne. In all three service firms where I worked, I continually recommended we conduct written and verbal client service surveys. The opposition from some in leadership was amazing, even though I showed them I had written surveys that did not set up false expectations or compromise confidentiality in any way.

    Often, leading consultants are afraid of what the clients’ responses will be. (Not a good sign!) At one large firm, around 1999, one of the Midwest offices composed a survey that involved having a consultant conduct the survey one-on-one with a client with whom the consultant was not involved. My office decided to try it, but a decision was made to conduct the survey for our large district, which included several offices. The survey was well written and gathered very good comments, but the process for gathering statistics for a whole district was the most laborious one I’d ever seen, making the effort unusually time-consuming and fraught with problems. Therefore, the survey was discontinued. As a note-taker, I accompanied several of our best consultants on their interviews. The discourse was exceptional. I would have loved to have used that instrument again, but with a very simple methodology for reporting and following up on the feed-back just for my office.”

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