Get ready for the recovery: Part 2 – Metrics.

The metrics of marketing communications won't be the same when this recession ends. And the end may be in sight.

According to The Wall Street Journal, major company CMOs project a turn-around in the last half of 2009 or the first half of 2010. The longest economic decline the United States has experienced since the Great Depression may finally be ending.

When it does, marketing and communications may be significantly different than they were before the downturn began. Last week we examined possibly permanent changes in the basic nature of the marketplace. This week we'll explore changes in the metrics we use to measure marketing effectiveness.

1. Metrics matter more.

The era of "Let's run it up the flagpole and see if anybody salutes," was fading fast before the recession started. The recession gave it the coupe de grace.

The marketing metric that matters most today is bottom-line results. Not awareness. Not attitude. Not "Read Most" or clicks or liked most by the Super Bowl audience. It's profit. The return on the marketing communications investment.

There are obviously still a few brands doing things with no empirical substantiation of their effectiveness, but they're an endangered species.

Some may try to mend their ways to avoid extinction. Buick seems to be attempting it. Apparently someone noticed that their sales had plummeted 66% in the eight years they've used Tiger Woods as the focus of their marketing communications and killed the campaign.

Stopping an ineffective marketing communications program is a long way from implementing an effective one, but it's a first step. And more and more marketers – at least the ones who will survive – are taking that step and implementing metrics that measure the bottom-line impact of their programs.

Soon virtually all companies will evaluate their marketing communications programs on ROI. And a CMO who doesn't deliver ROI will be DOA.

2. The metric for success is shorter-term.

The Great Recession shifted the focus of virtually every marketer in the country – probably in the world – to immediate sales. Understandably. When consumers stopped spending, brands had to scramble for every sale to live to fight another day. (For more on consumers holding onto their money, see our earlier article, Good marketing for worse times: Part 2 – Price.)

The shift to a retail/transactional metric of marketing success has three serious implications for marketers in the not-too-distant future:

• Short-term metrics ignore the need to get a brand into the consideration set at the beginning of the sales cycle. In some product categories that cycle may be as long as two years. If a brand doesn't make it into the group being considered at the top of the funnel, it gets increasingly difficult to break in as the decision-making process continues.

• Short-tern metrics encourage promotional rather than brand-building marketing. As we often point out, a discount is irrelevant if no one wants the product or service in the first place.

• Short-term metrics tend to be susceptible to the last click fallacy. A substantial body of research indicates that as much as 60-66% of internet search is triggered by an impression in traditional media. But if that search leads to an online purchase, the last click is often the only factor credited with the sale.

Decades ago, P&G revolutionized share- and revenue-building by shortening the measurement cycle from annual to quarterly. The rest of the consumer package goods industry quickly adopted the new, shorter, planning cycle. What many of those imitators missed was that P&G's quarterly goals were established within the framework of long-term plans. (A BrainPosse principal used to dread slogging through those five-year brand books. In hindsight it's clear that the slogging was invaluable training in the nuts and bolts of marketing. So a belated thanks, P&G.)

Many of the brands which looked no farther out than the next three months are gone, but P&G is stronger than ever because their quarterly tactical goals were part of a long-term strategy.

The challenge for post-recession marketers will be applying metrics of short-term tactical programs while maintaining a disciplined tracking of a consistent, long-term brand strategy.

3. Metrics are going to be simpler.

The era of the hundred-page research report is over.

At sophisticated marketing organizations, it's been over for a long time.

When a BrainPosse principal worked on international Coca-Cola business, one Coke country manager had devised a single-factor survey which could determine share two years in the future. More important, that single factor could be influenced until eighteen months before the target date. So there was a six month window of opportunity for course corrections.

Unfortunately, it takes some experimentation to identify the key factor – or, sometimes, factors, to track to optimize marketing communications effectiveness. There is no equivalent to the Net Promoter Score for operations. (The Net Promoter Score is a single-question -- or, in our recommended version, two-question -- tracking that quantifies customer satisfaction and predicts share within category. Our two-question preferred version also provides prescriptive information to build on strengths and repair weaknesses.)

Developing a single metric that works for all brands' marketing communications is almost certainly impossible, because the process of persuasion is influenced by a number of variables:

• Relational versus transactional appeals

• Short or long sales cycle

• Considered purchases or impulse buys

• The stage the customer is at in the purchase-decision process

• High-interest or low-interest category

• Degree of personal identification with the brand/category

• Necessity or discretionary purchase

• Etc.

We stopped there pretty much at random. The list could go on for pages.

The point is that key predictive/prescriptive metrics need to be developed for individual products or services. The first step may be one of those dreaded hundred-page research reports. But if it's done right, you may never have to commission and read another one.

The Coca-Cola case we mentioned earlier is an excellent example. They discovered the timing and triggers that determine brand selection, the true market segment (it wasn't colas) and even the key intercept point at which to reach the target audience.

• The competition wasn't Pepsi. It was all refreshing cool beverages.

• Soft drink brand preference is solidified eighteen months before the individual quaffs the beverage.

• There is a fairly constant age at which preference is solidified. (We'll never tell what it is.)

• The consumer attitude that drives that preference is discernable six months before preference is solidified.

• One attitudinal factor is the principal preference driver. (Once again, our lips are sealed.)

Knowing those five facts, it was simple to track the key attitude among the target audience members of the optimal age two years out, then reinforce or correct perceptions over the next six months to solidify brand preference.

After establishing the consumers' preference for Coke, the next step was motivating them to drink one right now.

Coca-Cola corporate research identified a group of consumer need states that drive consumption. Not all of the need states are effective in every society. The Coke country manager identified five that were important in his territory, and used them to incite immediate consumption (most purchases in that country were for on-premise, point-of-purchase consumption).

Almost all advertising and all point-of-purchase materials focused on those five need states. (A small part of the ad effort was invested in building in-home consumption as a future business driver.)

The tracking data helped take Coke's share of the refreshing cool beverage market to over 70%. And focusing on one simple metric and one age group made the tracking quick, easy and cheap.

Have other thoughts about marketing metrics in the post-recession era? Please share them in our comments section. We welcome disagreement, amplification and corrections.

To find out more about marketing communications based solidly on metrics – including a quantifiable return on your investment – call BrainPosse at 865-330-0055 or click here.

Next week:
Part 3 – Media

Part 4 – Motivation


  1. Chairkey says

    One attitude and one age group are the magic factors for Coke but you can't tell us what they are? What a cop out.