In last month’s blog post we discussed the first of the five core marketing processes essential to effective and efficient marketing operations — the lead management process. This was a great lead-in (no pun intended) for this month’s post on the reporting and analytics processes. Most firms, when they first dip their toes into the results reporting waters, look to report on their funnel results which depend entirely on having a functioning lead management process.
But, before we start, let’s agree on two definitions.
- Activities Reports: opens, clicks, visits, CTRs, visitors, duration, bounce, deliverability, etc.
- Results Reports: New leads, MQLs, SQLs, opportunities, renewals, new customers, bookings, Revenue, CLV
We are here to discuss the processes around producing regular, accurate, useful results reports that enable an organization to make better marketing decisions and evolve into a data-driven decision making organization.
As a CMO, I don’t have much time for activities reports; I need to understand how my department is impacting revenue on a regular basis.
Our learned colleagues at Gartner tell us that 76 percent of marketing organizations are accountable, or share accountability, for a P&L. But Aberdeen tells us that in reality only 19 percent of marketers have comprehensive tracking and reporting practices in place. Wow! There can only be one outcome if this significant gap between expectation of accountability and reality of reporting is not quickly eliminated — CEOs will be calling in United Airlines to accommodate marketing executives.
6 Steps to Build a Results Reporting Function in Marketing Operations
This dissonance between the realities of reporting and the expectation of P&L accountability led my colleague Justin Yopp and I to develop a straightforward process to transform the marketing department at The Pedowitz Group into a data-driven, decision-making organization.
Justin shared that “far too often, we see firms rush out and buy the latest in reporting software as if it were a panacea for all their reporting ailments.” We also see CMOs pursuing vanity metrics – metrics that “prove” the value of marketing instead of empowering better decisions for better performance. If you take nothing else away from this blog, please avoid being fascinated by the latest shiny software object, and do not focus on producing vanity metrics first.
Here is the process we developed for creating a results reporting function.
Step 1. Decide what you want to measure.
This is not as straight forward as you might imagine. You need to engage with the marketing team, determine their key performance indicators (KPIs), and find out what decisions they want to inform with these metrics. Are they trying to become more efficient, more effective, and redirect resources and budget? Are you going to measure marketing influence, and is there an attribution model for that?
Now prioritize these metrics and KPIs based on impact to the business. Notice we did NOT discuss how to measure them; where to measure them; and broader data, process and system requirements. That comes later!
Step 2. Determine what reports you will need to measure the KPIs and metrics you selected.
With the metrics and KPI requirements in hand, determine what set of reports are required to effectively provide that data. What are the parameters and dimensions that define these reports? In what systems will the reports be generated?
Step 3: Identify the data, processes, and systems that you need to create the reports.
Are the fields present and collecting data currently in the systems you wish to run the reports in? Are new integrations or file transfers required? Do your teams currently update the data in a reliable way? What data import processes need to be redesigned to support these reports? Will your existing technology stack support the reporting you need for effective decision-making? Will you use Excel, a marketing automation platform, a CRM, or some combination of all of these to produce the reports?
Step 4: Commission someone to build the reports.
Don’t send the initial reports to a wide audience because it is highly likely you will uncover unknown data issues and process issues. Also, there is a risk that the reports won’t conform to a widely held view of how things are, and you need to be pretty sure the data and the reports are spot on before you start that battle. You don’t want to lose reporting credibility just as you are getting started.
Step 5: Determine how to interpret the reports to generate meaningful insights.
Reports alone will not provide the answers and insights necessary to make better decisions. You need these reports visualized and contextualized to facilitate analysis. What dimensions should be used to slice the data into something meaningful? What time series should be used to present the data to unveil trends — week over week, month over month, quarter over quarter? Which metrics and KPIs should be presented together? In this step you’re doing the critical work of making your data consumable.
Step 6: Drive the change to becoming a data-driven decision making organization.
Start the cadence of daily, weekly and monthly reporting. Push your teams to provide data evidence to support their claims and decisions. Model this same behavior yourself. Also, be prepared to adapt the reports to what the teams really wanted in order to make decisions (there’s nothing like seeing the report you asked for to help you really understand what you wanted). This regular distribution and consumption of the reports is critical to truly embedding data-driven-decision making into your marketing organization.
Executive Leadership and Support for the Change
Getting teams to the point of analyzing the data and making data-based decisions on a daily basis will not happen just organically. Leadership has to lead in this practice and drive it down into the organization. Provide the training and resources necessary to bring the team up to speed. And allow time for the organization to acclimate to these new expectations.
It is a satisfying experience to attend a marketing status meeting and hear the broader team excitedly talking about changing their immediate plans based on last week’s or last month’s significant shift in a trendline.
Components of Your Results Reporting Process
- Metrics/KPI requirements — What decisions do they want to make based on the data?
- What is the right frequency for updating those decisions?
- What is the context for the data to support a good decision (comparison data?)
- Data Sources: what data is needed to support those decisions and metrics?
- Reporting technology: Where are the reports run? Do these systems support the output desired, subscription and distribution, have access to all the data required? Does your data architecture support running the reports you want in specific systems or was reporting a forgotten afterthought?
- Roles: Who owns, maintains and modifies the reports? Don’t assume that the report author is the same person who is familiar with the data — the data czar. Also the person who interprets the report might be yet a third person — a marketing business analyst. All 3 roles may need to be in the room when an important data-driven decision is being made.
- Standards: If your report creation is centralized it may not be as big an issue, but if you are global, and want to be able to roll up marketing reports from each of the regions, you have to drive standards for data collection, report building, naming, and presentation. The same business rules (think filters on the data) need to be applied and visible on the printed reports so people know they are comparing apples to apples.
- Media: What media will you use for delivering which reports? Are they online, emailed, PDF, Excel, Business Intelligence (BI) system, or MAP/CRM?
- Distribution: How can individuals subscribe and unsubscribe. How can you secure confidential reports? Restrict access and printing?
- Archival: Many firms don’t have a BI system and as a result some reports, which are snapshots of the results at an instant in time, are the only record of the data at that instant. Ie the same report cannot be re-run a month later, showing the exact results at that prior time for comparison to the current run. As a result there may be a need to archive all “runs” of a report, for comparison purposes in the future. How is this done without a BI? Build your own SQL database or use Excel? Obviously this can be laborious so it deserves attention and planning to keep it manageable.
Guiding Principles for Data-Driven Decision (3D) making
Data-driven decision making requires a set of guiding principles to be effective.
- The driving purpose of reporting is to enable data-driven-decisions.
- Do not succumb to ego/vanity reporting.
- Create reports that empower better decisions at the lowest levels – democratize decision making.
- Engender an inquisitive and investigative nature in your organization.
- Leave room for exploration and discovery of patterns.
You are probably already getting results reports. So ask yourself:
- Which of my teams are using these reports, how often, to make better decisions?
- What decisions are the reports informing?
- Are they vanity reports or reports for helping improve marketing performance?
If the reports aren’t driving any decisions or monitoring the health of a process, toss them and go to step 1 above! Audit all the reports in this way. Stop creating reports that no one uses for making decisions or confirming normal operation. My colleague Justin Yopp, who originated many of the ideas in this post also coined the phrase “Become a 3D marketing organization” – meaning Data-Driven Decision making. Are you a 3D organization? How did you do it? What were the biggest hurdles? Here are several examples of marketing dashboards that illustrate 3D thinking.
In step three above, we observed that the data and systems had to support our desired reports. This is a perfect segue to the next post on our Revenue Marketing Journey. Next month we will discuss the various parts to a data operations function within marketing operations and the associated processes.
Please feel free to share your experiences becoming a 3D marketing organization and other insights on the above topics in the comments section below or email me at firstname.lastname@example.org.