Which is more important to the health of the company?
On the one hand financial accounting systems are required by law. We have to file tax returns. We have to pay our bills. We need to shepherd our scarce monetary resources.
On the other hand, if the company isn’t happy with their revenue; If the revenue isn’t strong enough to support the company, then there are only three solutions:
- Wallow along not knowing why the company is failing
- Close the company, because eventually it will run out of cash
- Find out what’s wrong and fix it
How can you determine what’s going wrong in marketing without capturing the facts? So often we depend on the hipshooter VP of marketing to automatically know what’s wrong and know how to fix it. Of course they will always respond with, “My hands are tied. We don’t have enough money to do what we need to do. And I don’t want to waste any money on getting the concrete facts. I’d rather spend it on media”
We’ve heard it all before
I’ve heard this story so many times with small start-ups, even mid-sized companies struggling to get bigger. They want to measure marketing ROI, but don’t want to take the simple steps necessary in order to find out what’s working and what’s not. But it doesn’t have to be expensive. The solution does require rigor, however. It requires data and unfortunately it doesn’t come free. TANSTAAFL (also TINSTAAFL or TNSTAAFL) is the operative phrase. There are three types of costs to get the information necessary, and the company – rather the marketing VP – needs to be willing to invest in them:
- External data
- Internal manpower and tools (e.g., dashboard, spreadsheets, training)
- Management smarts and brain cycles
Sometimes we have to pay for external data. We almost certainly need to dedicate manpower to collect, collate and aggregate the data into some kind of report or dashboard. But it’s the third area that is often overlooked but is usually the most important. It is the time and effort that a senior manager with knowledge of marketing and of the business that can transform the collected data into actionable information in order to make the right strategic and tactical marketing decisions. He/she needs to determine how to build out the data infrastructure to capture the right things at the right time with the right accuracy. He/she needs to know the intrinsic value of the data, the value of the data in context of other market forces to truly interpret it so that it can be put into actionable insights and valuable strategic and tactical marketing decisions.
What do you choose?
If you’d like to speak further on this, I’d love to get your feedback and input.