• by Gray Hammond , June 3, 2009

Return on Marketing Investment is still the #1 concern among C-level executives. Accountability is new to most marketers, but others in our organizations have been here before us: Finance, Operations and IT folks have been measured [and have been measuring] for decades. Marketing is the final frontier for performance metrics.

To measure the right things the right way, we need to beware of cultural traps within our organizations. Here are several discovered by The Metrus Group, with my observations:

Myth #1: Measure The "Hard" Numbers, And The "Soft" Stuff Will Follow

In fact, the opposite is true: the soft stuff generates the hard results. To paraphrase one business book, "Shareholder return is the applause you get for keeping employees and customers happy." If you don't measure people's perceptions, you won't see the icebergs in your path. A drop in your brand's perceived quality or value relative to your competitors' is sure to precede financial trouble.

Myth #2: Metrics Are For Bean-counters

In fact, 'cascading' metrics throughout the organization guarantees that metrics will be both utilized and effective. When firms use a consultative process across the organization, good things happen: people's responsibility will reflect their level of authority; people can be empowered, feeling ownership from buy-in; and motivation won't suffer. Unfortunately, very few CMO's will talk to their HR Directors or CFO's about linking Employee surveys to Customer surveys and financials.

Myth #3: Metrics are too Rear-view

If you believe Myth #1, you will get Myth #3 as a result. Financials are lagging indicators; they don't give you early warning of problems brewing with customers, channels, competitors or employees. A Balanced Scorecard approach, including both leading and lagging indicators, ensures a sensible blend of metrics: strategic and tactical, perceptual and financial, long-term and short-term.

Myth #4: Measurement creates Reality

This is another way of saying things like, "Surveys put ideas in people's heads and create discontent" - if you believe that, you also believe that "ignorance is bliss". In fact, you need metrics to identify and understand the situation, set priorities and solve problems. Proven industry leaders - companies with consistently higher financial returns and respected by their competitors - conduct more surveys than laggards do.

Myth #5: Metrics Stifle Creativity

In fact, creativity and innovation need a defined "space". Peter Drucker discovered that the inventions from garage tinkering seldom pan out as viable products; Henry Ford and Hewlett Packard are the exceptions, not the rule. Focused and directed R&D, based on common understanding, has a far better success rate; without this you end up "sculpting fog."

Myth #6: Measurement Is Anti-human

In fact, motivation requires goals and feedback. NFL teams use "the board" in their dressing rooms, showing every player's stats - everyone knows how everyone else is performing. And those goofy thermometers painted onto plywood sheets that the local Elks use in fundraising drives? It turns out this simple metric is proven to raise more money.

Myth #7: The More Metrics, The Better

The IT department of a Canadian financial institution came up with 150 metrics; not surprisingly, few people understood them, nobody used all of them, and as a result no priorities could be set. Different departments and levels of the organization will have different Key Performance Indicators, some of which will filter up to the C-suite where a dashboard of up to 20 brand equity metrics might be required.

[On the other hand, beware the Silver Bullet merchants, claiming that one metric will reveal and solve all -- that's how we got Shareholder Value as the prime directive -- another nice mess that's gotten us into, Ollie!]

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