With many marketers planning and budgeting for the coming year, we’re frequently asked how a global marketing organization might look at planning and measuring performance. What are all of the steps and activities that need to happen?
During our recent webinar, Looking Forward & Back in Marketing Performance, Allocadia CMO James Thomas and I shared a real-world scenario with practical steps marketers can take to examine past performance and set meaningful targets.
Read my step-by-step recap below for a framework you can use with your 2016 planning and budgeting.
CMO, Monarch Tech Inc.
Creating the Strategic Plan: 4 Months Out
In our scenario, it’s September – the end of Q3 and four months before the start of the new fiscal year. The company, Monarch Tech Inc., has just completed its annual strategic planning conference.
Step 1: Create the Strategic Plan
The CMO outlines her top three strategic goals — what the company is trying to achieve. For example, one of the scenario goals is to drive $100M in net new revenue.
Step 2: Identify High-Level Targets
The CMO also identifies one to three top targets and KPIs — steps to align those goals and standards to measure the goals are being met. In this case, one of the targets is to invest 10 percent of revenue into marketing programs.
Step 3: Communicate Plan to Stakeholders
The CMO shares the plan document with C-level executives and marketing operations.
VP Marketing Operations, Monarch Tech Inc.
Operationalizing the Plan: 3 Months Out
It’s now October. Marketing ops receives the CMO’s plan and needs to operationalize it.
Step 4: Gather Data
The Vice President of Marketing Operations starts by gathering past performance data. In this example, he’s connected the company’s investment and returns performance data to his company’s central system of record (e.g. Allocadia), which provides a real-time view of spend.
Step 5: Analyze Performance
He also uses data visualizations to analyze past performance. As seen in the left side of the graphic below, he reviews the investment target versus actual by different dimensions, and by what percentage the investment is over or under. On the right side, he views the returns target versus actual across dimensions such as region, quarter or even product line.
Step 6: Fine-Tune Targets & KPIs
After reviewing past performance with a critical eye, the VP of marketing ops takes the $100 million marketing goal and divides it up into regions and business units, and sets quarterly amounts for spend. He also sets a new KPI that all business units need to be over/under target by three percent.
Building the Plan: 2 Months Out
Two months before the new plan kicks-off, the marketing team now needs to develop a plan to meets those targets.
Step 7: Empower Marketers to Build Plan
To empower all marketers to build their bottoms-up plan strategically, the VP of marketing ops communicates and provides visibility into the following targets:
- Functional targets. What is the allocated budget to spend by my region or cost center?
- Strategic targets. What percent do we need to spend by what objective?
- Estimated revenue impact. Based on funnel conversion or average deal size, if I output this many leads, what is my revenue impact?
Present the Operationalized Plan: 1 Month Out
Step 8: Present the Operationalized Plan
The VP of marketing ops presents the detailed plan to all stakeholders — showing the plan is in alignment with the CMO’s targets and objectives, and has enough output to affect revenue.
Implement the Plan
Step 9: Ongoing Visibility into Real-Time Performance
With the marketing team executing, the VP of marketing ops monitors performance in real time, and makes ongoing adjustments to the targets as needed to course correct. This helps marketing team understand whether it will achieve its goals and targets.
For example, if we continue to generate revenue (including our past actuals), and if we continue to spend (including what we’ve spent so far), what is our forecast to be over or under? What is our ROI forecast? Monitoring performance in real time provides both the company and marketers with a forward, holistic view of marketing performance.
Key Takeaways
1. Understand your business objectives to set meaningful targets.
2. Invest in communicating those targets and giving marketers visibility into their performance.
3. Aim for a real-time forward-looking view of performance.
Watch the full webinar recording for additional perspectives, tools and best practices for understanding past performance and setting meaningful future targets.
The post How to Build Your Marketing Plan Using Past Performance: A Real-World Scenario appeared first on Allocadia.