In my post last month, I contrasted swing-for-the-fence Powerball Marketers from companies that follow a scientific, Moneyball Marketing discipline. The quick summary is that Powerball Marketing is analogous to gambling, and unfortunately many companies continue to make big bets without investing in data or techniques that could improve their odds. Moneyball Marketers, on the other hand, represent a new breed of analytically driven, outcome-oriented practitioners who use new metrics and game plans to consistently beat their competition. While some readers took issue with my criticism of Denny’s “Free Breakfast for America” campaign as pure Powerball, no one disagreed that changes in technology and consumer behavior make relying on conventional marketing wisdom a career-limiting endeavor. To that end, this post will focus on what companies can do to become Moneyball Marketers.
In his book, “Moneyball: The Art of Winning an Unfair Game,” Michael Lewis describes how a handful of Major League Baseball general managers have succeeded in creating championship-caliber franchises despite substantially smaller budgets and supposedly inferior players. My view is that the approach these managers are taking is directly relevant to what marketing managers need to do. In my assessment, there are three skills that companies need to develop in order to win consistently.
Start with quantifiable outcomes. I continue to be amazed by how many agency personnel think that achieving a large number of impressions is the primary measure of a campaign’s success (a fact I have been exposed to when judging industry awards). In my view impressions, as well as reach and frequency, are a simple input into the marketing equation. Outcomes matter more, and if you can’t quantify them, then they don’t count. What are some good examples of outcomes? How about “grow 10% each quarter” or “increase customer retention five percentage points by the end of the year?” Defining great outcome statements upfront is the critical first step in marketing planning — and when they are quantifiable, they establish clear success criteria for your agency and media partners. Point: Don’t invest resources in a marketing program until the desired outcome is identified and you can connect the dots from program execution through to success.
Use new metrics based on new data. Data can be a blessing and a curse; in the end, the determining factor is knowing what to measure. In baseball, sabermetrics has emerged as the new math, complete with new data and metrics. “Run production” is the number one performance measure, and old school metrics like batting average don’t predict run production as well as innovative new metrics like on-base percentage and range factor. Similarly, conventional marketing metrics like purchase intent (collected via surveys) are no longer adequate when we can use consumers’ actual online shopping behavior to better calculate the brand and sales impact of a particular campaign.
Like sabermetrics, clickstream-based marketing measurement has proven to be a better measure of consumer purchase behavior than the conventional techniques it is now replacing. The best example of this may be in the auto industry, where consumers’ online shopping activities have been translated into a whole new class of demand, conversion and shopper quality metrics like cost per shopper, shopper conversion rate, and reverse cross shop. As a result of these new metrics, auto makers now have a better understanding of how their marketing is performing, and precisely what they need to adjust in order to hit their monthly and annual sales goals. Point: Discard old-school data and metrics in favor of rich, new clickstream-based analytics.
To see what other skill Moneyball Marketers like ING Direct and Hyundai possess, check out Compete’s monthly post on MediaPost.