Thursday, March 8, 2007

Revenue - Still The Only Way To Keep Score

The Only Statistic That Counts For Marketers Is Money

By David Miranda

A client, who had just been appointed the new senior marketing executive of a mid-sized company, asked me to attend an internal marketing meeting where the results of a recently completed marketing campaign would be presented. The meeting was scheduled for one hour including four presenters each representing a specific discipline. The first presenter, representing the interactive component, paged through an impressive powerpoint including various charts and graphs. As the last slide appeared, he summarized as follows:

"We generated a lot of eyeballs with this campaign, but we are disappointed with the number of impressions and although the click through rate is quite high considering the overall site traffic and limited number of page views; we are happy with the response rates that have contributed to our conversion rate exceeding our campaign targets. Any questions?"
All eyes focused on my client, their new boss. After a pregnant pause, he asked, "How much revenue did this initiative contribute to our fourth quarter results? Isn't that what's really important?" "Yes sir, it is, but I'm not sure I can answer that question.", was the response. No sooner had the boss asked his question, the other presenters quickly reviewed their own presentations in anticipation of the same question. They were right, although no one could answer to the boss' satisfaction. I could tell he wanted to make a point and he did. He concluded the meeting with sound advice, "we are here to make money and money is how we keep score. From now on, let me know what the score is."

In marketing, we have devised many performance metrics, particularly in recent years. There are the eyeballs, impressions, site traffic, unique visitors, and page views. Then there are the "rates", as in click through, click-to-call, conversion, response, and recall to name a few. Too many times, marketers like to demonstrate their professional acuity with lingo-laced jibberish. The only metric that counts, however, is revenue, money, moolah.

Straight talk must be the official language of the marketing department regardless of the individual specialty. Does the advertising, promotions, direct mail, or interactive initiatives contribute to the brand's revenue objectives? If so, how much? If not, why? Impressions, eyeballs, etc. are irrelevant if revenue targets are not achieved. If your hometown team played an important game, what is the first question you ask? Of course, "What was the score?" If the person you asked said "we completed 10 of 20 passes and rushed for 230 yards"; you would say, "who cares about passing and rushing, what was the score? Did we win or not?"

Revenue is the only statistic that matters in marketing. It's the only way to keep score on who wins and who loses.