We all know each industry has its particularities in all senses. Marketing is not an exception. These unique characteristics lay the foundation for most organizations’ challenges. However, there are many challenges that belong to the moment we’re in. Regardless of your market, your type of product or your competitive situation, these challenges are common to most marketing departments.
Challenge 1: Omnichannel Distribution
If you haven’t done some digitalization within your business, you’re already late. Digital transformation is neither a fad nor a need anymore. Digital is the standard that gave birth to omnichannel, and with it, the inability to define a clear customer journey. The question is: Do we really need it?
While marketers keep trying to entertain segments of one, why would you want to define the erratic path of many? Consider this: If you work with nine marketing touch points, you have 362,880 (give or take) possible customer journeys. Do you really think you can figure it out?
Challenge 2: Catching The Attention
In a world of overinformed and media-bombarded customers, how can you get your target’s attention? Well, this is not really the challenge. If you are fighting for attention, it means that you are not interesting. Your customers and potential customers are not looking for you; you are trying to appear on their radar. That’s the real challenge: to become interesting rather than being an attention-grabber.
Challenge 3: Proving Marketing ROI
Old, less-demanding communication metrics such as opportunity to see (OTS), gross rating point (GRP), purchase intent, Net Promoter Score (NPS), etc., are out of date, or at least out of the scope of attention of the rest of the organization beyond the marketing department.
When was the last time, if ever, that you reported these types of key performance indicators (KPIs) to your CEO or general manager? Was any financial, business-related decision ever made based on that information? How many times were you asked the dreaded question: “What’s this marketing campaign going to contribute to the business?”
You know the answer is a real return on investment (ROI). But you may not know either how much or how to calculate it in a credible way.
The curious matter is that the answer to all these challenges is the same but seen from different angles: value.
Marketers and businesses have gone from a product-centric management model to a client-centric one. The customer is the center of everything, and everything is aimed at satisfying customer needs. But which needs, and at what cost?
We all know it is difficult to define the customer journey — they buy everywhere in an unpredictable order. Each customer has (and expects to satisfy) their own particular needs. Filling the needs of massive segments of customers is a daunting task, if not impossible.
The answer to managing omnichannel sales is not in the customer journey but in the value generation. Value for whom? For the customer and for the company. Same word but different meanings. The only way you can figure out what value means for your customers and potential customers is through quantitative — not qualitative — research. And the only way to define value for the business is by knowing the actual economic contribution of marketing to its bottom line (ROI).
On the other side, looking at the second challenge, in order to become interesting, you also need to generate value for your clients and potential clients. The only way your customers are going to “look for you” and what you have to say is if it generates value for them.
This value doesn’t necessarily come only from the actual purchase or use of your product or service; it also comes from the other issues and experiences that are important to them (society, environmental, etc.). How are you doing in those terms? Are you building social equity through your marketing and business activities? Are you somehow contributing to healing environmental damage? Becoming interesting equals generating value.
We all know marketing generates real economic value. To define that value, marketers keep showing metrics that do not report real economic figures. What’s the value of your NPS for the CFO when it comes to defining your marketing budget? How does purchase intent help your CEO choose alternative investments? For the few marketers who go a step beyond showing some return figure, is this amount based on some sort of secret algorithm from your media supplier or on an estimation? Does your CEO or chief financial officer believe in it?
For those who make an extra effort to prove marketing ROI, I have good and bad news. The good news is that it can be calculated in a robust, credible way. The bad news is that it requires marketing departments to build their own attribution models. There’s no way out. Businesses that use predefined attribution models (such as time decay, last click, etc.) will generate an entropic indicator that is useful only to the marketing department, as the rest of the organization will not believe in it.
To build their own attribution model, marketers need to isolate two things: the number of acts of purchase that have been impacted by the marketing campaign, and the influence of the campaign on the decision-making process of buying customers. The first one can be done through a wide variety of traceability tools. The second one requires quantitative research again — you can use the same research to define value and the influence of marketing in customers’ decision-making processes.
Summarizing, the solution to the most pressing marketing challenges relies on good research to define value for the customers and on building your own robust, credible attribution model to define value (ROI) for the business.
Regardless of your industry’s particularities, marketers need to do something to overcome these challenges in order to avoid a slow but steady decline into obsolescence.