·         “If we were to cut marketing in half, would we see any significant drop in sales?”

·         “Dollars are tight.  Where should we focus our marketing efforts to further our business goals?”

·         “Our competitors are putting a big effort into marketing via Facebook and Twitter. What are we doing in social marketing?”

·         “My neighbor told me that his company has cut back on events and advertising in favor of virtual conferences and webinars. Why don’t we do that?”

·         “Where do our marketing dollars go?”

If you have been in a management “offsite” or in a boardroom in the last year, you have certainly heard some or all of these questions.  But these questions don’t get to the crux of the issue.  What CEOs and boards are really asking is, “How do we know that our investments in marketing are producing results; which activities are working and which ones aren’t?”

Companies are getting tired of investing marketing dollars with very little feedback about what is working and what is not working. The latest round of buzz talks about capturing “mentions,” social sentiment, and other online social metrics. Truth is, this stuff is pretty easy to capture and there are a whole bunch of companies and tools (some of are even free) that give you all, or part of the picture. The following are examples of information you can capture with these tools:

• We had 534 mentions last week in the blogosphere; 65% of it was favorable, 20% was negative, and 15% was neutral.
• We now have 2300 fans on our corporate Facebook fan club.
• We were mentioned in 35 Tweets this week.
• Our corporate blog has had an increase of 5% in page views this month over last month

But what can you do with this?  How is this effecting business? How much effort are companies investing in pumping up these kinds of numbers, with little regard for what it is doing for their businesses?

Here are some concrete suggestions for getting your arms around measuring your marketing program:

·         Articulate your goals clearly at every possible opportunity. Maintain a meaningful scorecard that lets everyone know how the company is doing. For example, if these goals include generating brand awareness and buzz, then the statistics listed above should definitely be part of the overall marketing scorecard. If your goals include generating business, then find a way to connect these numbers to sales activity. If you can’t do it, you are probably wasting time collecting these numbers.

·         Remember that social marketing is only one part of your program. Track and measure the other elements, such as email response, sponsorships, Google/Yahoo Ads, webinars, promotions, events, etc.  Produce a single view of response rates from all activities to show the big picture.

·         Since marketing activities work in concert (e.g. someone saw your company’s ad running on a blog site and then got an email message), try and determine the best combination of activities and the optimum frequency of touch points.  This is really hard to do, but there are products and services that will be available in the near future that will greatly simplify this.

·         Keep outreach campaigns short so they can be analyzed and tweaked. Run controlled tests to evaluate the response rates based on the following:

• Specific outreach vehicle – email lists / newsletter sponsorships / ad location
• Specific marketing messages – test several
• Promotions you are offering, e.g. special deals, white papers, webinars, etc.
• Variation of outreach frequency – play with the frequency of the outreach and the specific day of the week/time of day

·         Most importantly, tie responses to sales activity. Follow marketing leads through the sales funnel. This requires upfront planning and not a small amount of data massaging, but this is really what you are after. If you can answer the following questions, you are on the right path:

• From “closed business,” where did the initial leads come from?
• What is the difference between the leads that generated sales and those that did not?
• What program (i.e. combination and frequency of marketing activities) provided the most bang for the buck?
• Can I show management how our activities are driving sales?
• Can I show management the value of each sales-related marketing activity?

I admit that these questions are not easy to answer. Most companies today don’t have the necessary infrastructure and tools to do this simply.  Sure, marketing analytics tools aren’t new, but they are typically hard to use, require a lot of integration with internal systems, and have to be run by highly-trained staff. The current shift to online activity tracking, both in sales and marketing, however, will make this easier over time.  In fact, the shift in the marketing mix will lead to a new category of “cross-channel analytics” tools.