The Hardest Thing We Ever Tried to Measure

In the past, I’ve talked about the importance of measuring everything your factory does from the number of units produced to the number of hours a machine runs to the amount of scrap you produce. You should also try to measure everyone in the back office too, including HR, the accounts receivable department, and even the various managers.

But one of the things I’ve found hardest to measure was the marketing department.

Before we started measuring everything at Robroy, we weren’t measuring anything in marketing, but we started once I implemented the measurement initiatives. I don’t know if I ever perfected it — If I had, I would be rich! — but we did what we could.

The problem with measuring marketing’s performance is that there are just so many variables and there are no baselines on which you can say, “this is always a constant.” Sure, there are standards that are thrown around the industry like gospel, even though no one knows where they come from: car dealer postcards get a .5% response rate, direct mail in envelopes gets a 2% response rate, and so on. But these are guesses and urban legends based on poorly-done studies years ago.

Measurement gaugesThese days, you can measure your digital marketing efforts, but even that doesn’t tell the whole story. If someone sees your ad online, but they also see a TV commercial and a billboard, which ad compelled the buying decision? When did they see the commercial or pass the billboard? How many times did they see it before they decided to buy?

See the problem?

The point is, these baselines are changing every single day. The one thing I do know is if you quit marketing, it will hurt.

I have a theory that what you don’t do today, you will pay the price for three to five years from now.

For example, when I was at Robroy, we worked with a country whose government has been historically hugely corrupt. And in the oil field business, people have a tendency to be risk averse. So you put the two things together, the country and politics being corrupt and the oil industry being risk averse, and then you look at the fact that this country has one of the biggest oil reserves in the world, you realize that there are a lot of outside equipment companies that just don’t want to get involved, but plenty of in-country suppliers who were happy to play along.

Their state-controlled oil company was also one of the most corrupt anywhere around. But without compromising my ethics — I refused to ever play their game — I just kept working with my licensee in that area, traveling there twice a year for several years, meeting with all the players, meeting all their requirements, and today, Duoline is benefitting from all of that by virtue of the fact that the country’s government has opened up bids to companies outside the country, and made it so everything is now equally considered on all the bids. And since Duoline has the only qualified product for that particular application, it definitely put us in the driver’s seat.

That’s how it goes with marketing. If I stopped doing it just because I couldn’t measure it, I might have seen some savings in the short run, but five years later, sales would have dried up, deals would have dried up, and nothing we could have done would have ramped everything up quickly enough to recover from it.

So while marketing professionals still try to hammer out the whole “how do you measure marketing?” question, all I can tell you is that if you don’t do it, three to five years later (if not sooner), that decision is going to bite you in the ass.

And then, your bottom line will be the easiest thing to measure, because it will say $0.

I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business. If you would like more information, please visit my website and connect with me on Twitter, Facebook, or LinkedIn.

Photo credit: Joshua Wilson (Pixabay, Creative Commons 0)



Author: David Marshall
I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business. If you would like more information, please visit my website and connect with me on Twitter or LinkedIn.