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Romek Jansen, 17 Sep '15

Marketing Objectives and KPI Misalignment

All too often there is a misalignment between the marketing objectives and the KPIs implemented. Here are two examples from my own projects.

It is surprising to see how often marketers stick to their existing KPI set when their marketing objectives have changed. What has been measured is not always what should be measured.

Just after college, somewhere mid-nineties, I got involved in the quest to find a new sponsor for a professional cycling team. I had to write the sponsorship proposal and convince a company to spend millions of pre-Euro currency to have their brand name printed on lycra. It was a dream project combining cycling and marketing analytics, two topics I love.

Back then the generally accepted method to show the value of a sponsorship was what we called the shoebox. It was a combination of brand exposure reports and scrapbooks showing “seconds visible on screen” and “millimeters printed on paper”. We then compared the exposure costs of sponsoring vs. exposure costs via regular advertising, and BOOM…  ROI.

We experienced most traction with prospects from the banking and insurance industry. Without exception the brand awareness of our prospects in their respective market was higher than 90%. Awareness was obviously not an issue.

The problem these financial institutions all faced was how to differentiate themselves from competition. The products and services were perceived as a boring, complex and anonymous commodity. Not name awareness, but brand identity was the problem.

How about some speed, dirt, wind and heroism to activate the brand?

We had brand identity waiting on a shelf for them. No better, faster and cheaper way to transfer the image characteristics from a sport to a brand than sponsoring a cycling team. Deal closed.

The cycling team earned its position in the peloton and I moved on to another job. Two years later I met one of the marketers from the team and asked about the “results”. He smiled. He knew I was not asking about the sports results but the marketing results and started talking about the shoebox that was pilling over. I was very surprised the team was still using exposure as the main KPI and not measuring their currently changing image. There was a misalignment between the objective (related to image) and KPI (related to exposure). That was 20 years ago.

More recently I was talking to a marketer responsible for a Marketing Resource Management project. They had implemented a tool to mass-customize dealer magazines, delivering a more local and relevant message, to be “closer to the customer”. They explained the project was a big success because the new tool allowed them to operate more cheaply, although cost efficiency was never an objective when they started this project. I asked if they actually got closer to the customer, but they did not have KPIs in place to measure this and my question even seemed to come as a bit of a surprise. There was a misalignment between the objective (related to customer intimacy) and KPI (related to cost reduction).

These 2 examples are no exaggerations nor exceptions. All too often there is a misalignment between the marketing objectives and the KPIs implemented. I fully acknowledge that it is not always easy to find and implement the correct metrics, but in such cases I always think about the quote “It is better to be approximately right than to be precisely wrong” from the book “How to Measure Anything: Finding the Value of "Intangibles" in Business” by Douglas W. Hubbard.

Hubbard describes how abstract concepts like happiness, compassion, public influence or creativity can be measured. If that is possible, then setting up marketing metrics for image transfer or customer intimacy must be a piece of cake.

There is always a correct metric to be found to measure the progress on marketing objectives. It just requires some effort and the acknowledgment that what was measured in the past does not automatically fit the new marketing objectives.