Today, marketers are responsible for driving growth and meeting performance goals. But how can you be sure that your efforts are moving the needle? Marketing performance management is the process of tracking and analyzing marketing data to measure and optimize performance. Using this data, you can identify areas where your marketing needs improvement and make changes that will impact your bottom line. So why is marketing performance management critical for every marketer?
In B2B, many marketers would agree that marketing performance measurement is anything but straightforward. With multiple marketing channels, numerous contacts from an organization, and attribution issues, there’s often a lot of ambiguity in measuring marketing ROI. So, what’s the solution to accurately measure marketing ROI and make better marketing decisions? The answer lies in Marketing Performance Management (MPM).
What Is Marketing Performance Management (MPM)?
Marketing performance management (MPM) refers to the set of technologies and tools that help marketers measure the effectiveness of marketing activities. With MPM, marketers can better understand quantifiable benefits from marketing activities and gain insights to help make informed decisions about future strategies.
By definition, MPM is the process of tracking, measuring, analyzing, and managing the performance of marketing efforts and activities. At a tactical level, MPM involves leveraging business intelligence (BI) tools, ingesting multiple data sources, and analyzing marketing data to derive insights.
At a strategic level, MPM enables role-based access to data and KPIs related to marketing activities through interactive dashboards, visualizations, marketing analytics, attribution models, planning, data gathering, and optimization.
MPM can analyze marketing performance across various channels, such as SEO, email marketing, social media marketing, offline activities, and more.
Why Do You Need Marketing Performance Management?
In a crowded and competitive marketing environment, marketing performance management can help to develop high-performing marketing strategies and to allocate marketing investments better. Here’s why MPM has become essential for marketers.
Improve marketing strategy
MPM measures the performance of marketing initiatives and helps identify the marketing channels and activities that yield the most benefits. It also gives valuable insights that you can use to refine the marketing initiatives. With this, you can expect to continuously improve your marketing strategy, gain visibility into how marketing connects to revenue, and move closer to your marketing and business goals.
Justify marketing budgets
Demonstrating the marketing return on investment is a challenge for many marketers. Failing to do so can lead to budget cuts for marketing investments. MPM can help you show how the investment in marketing translates into specific business benefits and justify your marketing budget.
Eliminate poor marketing tactics
It's essential to eliminate marketing strategies that produce poor results so you can distribute the marketing budget to what works. Over time, you can better understand what is and isn't working through comparative analysis.
What Are the Benefits of Using Marketing Performance Management?
Marketing performance management is a holistic approach to improving marketing performance and ROI. It can lead to improved customer satisfaction and loyalty, increased market share, and enhanced brand equity. Some of the benefits of using marketing performance management are as below.
Improved Marketing ROI
Marketing performance management enables organizations to fine-tune their marketing strategies and allocate resources more effectively, resulting in improved marketing ROI. It also helps identify the marketing channels that work best for your goals to enhance your marketing performance.
Increased Transparency and Accountability
One of the significant benefits that marketing performance management provides marketing teams includes transparency and accountability. By tracking KPIs and establishing clear targets, marketing performance management systems help to ensure that everyone in the organization is working towards the same marketing objectives. In addition, these systems make it easy to identify improvement areas and track progress over time.
By collecting data from various sources and aligning marketing goals with business objectives, marketing performance management provides in-depth, detailed, and accurate insights about all the marketing channels. It helps organizations to make data-driven decisions about their marketing investments, strategies, and tactics. It also helps with predictive analysis and lets you plan future campaigns better.
Better Customer Experience
The marketing performance management data gives you insights into customer behavior and preferences. Over time, you can incorporate these insights into the business strategy to improve customer experience and retention.
3 Challenges Associated With Marketing Performance Management and How to Fix Them
While MPM is powerful, it does come with some implementation challenges. Below are some of the challenges that you might face.
- Difficulty in Measuring and Tracking Marketing Performance Accurately
A marketing campaign rarely operates in isolation in attracting new customers. Multiple marketing and sales channels typically engage prospects in their journey to becoming customers. Numerous customer touchpoints can make it difficult to measure, track, and attribute marketing performance accurately. Similarly, attributing the increase in sales to a particular channel can be difficult when you use multiple channels for marketing.
How to fix it
Multi-touch attribution tools are essential to building the data foundation for accurate marketing performance analysis. With the proper data foundation, marketers can utilize multi-touch attribution models to analyze marketing investments and all the touchpoints throughout the customer journey.
- Deprecation of Third-party Cookies
Marketers have long relied on third-party cookies to build and measure marketing campaigns by tracking customer behavior. Thus, Google's recently announced cookie deprecation can be challenging for businesses when it eventually takes effect.
How to fix it
Reduce dependence on third-party cookies to collect and connect data and look for alternatives such as marketing performance management software that enable marketers to gather and utilize first-party data. Since cookieless tracking options allow for more data collection, they provide a viable method for better attribution accuracy.
- Insufficient Data for Analyzing Marketing Performance
When your sales and marketing teams have poor data collection practices, this can lead to incorrect conclusions and poor data derivatives related to marketing performance management. At the outset, it’s essential to define and implement data hygiene practices to ensure that all marketing and sales data inputs are trustworthy.
How to fix it
Businesses must establish data collection best practices and train the marketing and sales teams to follow these guidelines. For example, missing data in CRM systems can lead to misreported metrics, and these poor practices can lead to miscalculations in marketing performance. Better data leads to better decisions.
How Does Marketing Performance Management Compare to Other Methods of Managing Marketing Performance?
Marketing performance management is a relatively new approach to managing and measuring marketing performance. It focuses on aligning marketing initiatives with business objectives and then tracking and measuring the results of those activities to optimize marketing budgets and performance. Marketing performance management differs from other approaches to managing marketing performance in several ways.
Emphasis on Alignment of Marketing Goals with Business Objectives
Marketing performance management emphasizes the alignment of marketing activities with business objectives. It is a holistic approach that prevents marketers from losing track of the overall business goals.
Strong Focus on Tracking and Measuring Results
Marketing performance management places a strong focus on tracking and measuring results. This data-driven approach allows content marketers to see which activities are most effective and makes it easier to identify opportunities for improvement.
Flexible and Adaptable
Marketing performance management is highly flexible and adaptable. With data and feedback as the basis, it’s possible to adjust to market or business environment changes quickly.
Marketing performance management is a process tied to continual optimization. Marketers can ensure that they are always getting the best results by constantly reviewing data and changing strategies and tactics. This process can be highly beneficial in helping organizations to achieve their goals.
What Are the 5 Major Components of Marketing Performance Management?
There are five major components of marketing performance management that you need to consider.
Setting Clear and Achievable Marketing Goals That Align With Business Objectives
One of the critical components of marketing performance management is setting clear and achievable goals that align with business objectives. It ensures that everyone in the organization is working toward the same purposes.
For example, suppose the goal of a business is to increase revenue at a 50% annual growth rate. In that case, it’s essential to establish the corresponding marketing goals that predictably connect to pipeline and revenue. In this example, the marketing goal could be to generate a certain number of opportunities with a particular pipeline value. You need to articulate this goal clearly (pipeline value) and then establish marketing activities to achieve this goal (channel, target audience, campaign budget, campaigns, ads, etc.).
Developing Key Performance Indicators (KPIs) To Track Progress Towards Goals
Another critical component of marketing performance management is developing KPIs to track progress towards the goals. It helps identify key metrics that measure success and indicate improvement areas.
For example, to increase revenue at a 50% annual growth rate, the marketing KPIs would include the number of opportunities, the pipeline value of the opportunities, the estimated opportunity win rate, etc.
Creating a Centralized System to Collect and Analyze Data
A centralized system to collect and analyze data is also a key component of marketing performance management. Critical data stored in different places can be detrimental to genuinely data-driven decisions. The Sona Growth Platform helps connect data from multiple sources to understand marketing performance. The data can be reviewed, enhanced, and exported into the tools that you leverage for MPM, where it can further track progress and business impact over time.
Choosing the Right Marketing Performance Management Platform
There are many software platforms available to help businesses with marketing performance management. Businesses need in-depth research to find the platform that best fits their needs.
In the upcoming section, we have provided valuable tips to help businesses choose the right marketing management platform.
Identifying Areas of Improvement and Taking Action to Improve Results
Another significant component of marketing performance management is taking action to improve results. It may involve making changes to the way you set marketing goals or the way you track KPIs. It could also include changing the way data is collected and analyzed. Whatever the case, it is essential to identify areas of improvement and take action to improve results.
For instance, if marketing activities such as paid search initiatives are not generating projected sales pipeline contributions, businesses need to evaluate the underlying metrics and consider levers such as landing page conversion rates, quality scores, and downstream metrics associated with search queries and targeted keywords.
Communicating Results to Stakeholders
The final aspect of marketing performance management is communicating results to key stakeholders. With a single data source for marketing truth, teams can ensure progress, make early course corrections as needed, and provide recognition around what’s working. A single trusted source of marketing truth also helps to build trust between marketing, other departments, and senior management.
Unified data drives better communication amongst senior management. With marketing and business goals aligned, marketing goals get the proper consideration in the overall business strategy.
How to Choose the Right Marketing Performance Management Software to Improve ROI?
Choosing the right tools is vital to measure marketing performance accurately and to help improve current and future marketing campaigns. Before choosing marketing performance management software, here are a few essential considerations:
Requirements and Features
Marketing performance measurement software will help you to set goals, track your progress towards them, and identify areas that need improvement.
Goal setting is a critical area to consider when choosing marketing performance measurement software. The right solution should help you understand how to outline strategic business goals, break down those goals into KPIs for the marketing team, and track those KPIs through completion.
Marketing performance management software is an essential tool for any marketing department. The right pricing plan and subscription model can help you make the most of your budget while providing a return on investment (ROI).
Comprehensive insight into marketing performance requires a software solution that seamlessly connects with other software, analytics packages, tools, and applications. With a connected solution, it becomes easier to gain timely feedback so that when changes need implementation, they can happen promptly.
A marketing performance management software solution must integrate with a best-in-class revenue attribution platform for the highest level of accuracy. An integrated solution would provide marketers with the highest level of data accuracy and enable marketers to understand a complete picture of performance across different marketing channels.
With marketing performance management and revenue attribution software tools available today, it becomes possible to connect business strategy to marketing performance. Marketing performance management can leverage the power that this data holds. At Sona Labs, our B2B revenue attribution platform works with marketing performance management software and makes it possible to connect marketing activity with pipeline contribution and revenue. The Sona Revenue Growth Platform provides a complementary solution to marketing performance management and planning software. Sona allows marketers to analyze the impact of every dollar, optimize marketing spends across channels, campaigns, and ads, and auto-synchronize segments with sales and marketing tools that can help skyrocket your marketing performance.