For companies with recognizable brands, if you're measuring your marketing effectiveness today you're doing it all wrong. Traditional measurement focuses on the media channel and simple attribution and ignores the most important aspect of measurement: how the consumer makes purchase decisions. Analytics must be centered on this and nothing else. That's what we do. Through data-driven marketing we help marketers grow sales to meet and exceed profit, sales and growth objectives.
In this episode
Guy Powell of ProRelevant is famous for winning a large bet with an airline executive that every aspect of the effectiveness of marketing could be measured quantitatively. Guy won his $5 because he never claimed it could be measured for free. But he makes a critical point that the return on investment of allocating some of your marketing budget to measuring its effectiveness is astronomical. In this episode of the Best Kept Secret Guy shares the 4 steps to implement a marketing effectiveness program and why any CMO who wants to keep their job needs to put this front and center of a company's marketing efforts.
A glimpse of what you'll hear
03:13 The challenge to taking a data driven approach to marketing effectiveness
04:43 You can measure anything you do in marketing if you're willing to spend the time and money
06:59 How to measure the effectiveness of your marketing
10:58 The explosion of data requires sophisticated analytical methods including machine learning and artificial intelligence
11:55 The return on investment from marketing effectiveness studies can be phenomenal
15:30 Avoiding the embarrassment of failing in full view of the public
17:23 4 steps to implement a marketing effectiveness program
21:16 Learn about Guy. Email Guy at email@example.com.
(Note: this was transcribed using transcription software and may not reflect the exact words used in the podcast.)
Centricity Introduction 0:04
Welcome to the Best Kept Secret videocast and podcast from Centricity. If you're a B2B service professional, use our five step process to go from the grind of chasing every sale. to keep your pipeline full with prospects knocking on your door to buy from you. We give you the freedom of time and a life outside of your business. Each episode features an executive from a B2B services company sharing their provocative perspective on an opportunity that many of their clients are missing out on. It's how we teach our clients to get executive decision makers to buy without being salesy or spammy. Here's our host, the co-founder and CEO of Centricity, Jay Kingley.
Jay Kingley 0:43
I'm Jay Kingley, the co-founder and CEO of Centricity, welcome to another episode of our Best Kept Secret show where I'm happy to welcome Guy Powell. Guy is the founder and CEO of ProRelevant Guy in his team helped medium to large corporations measure quantitatively the effectiveness of their marketing with a focus on how the consumer makes purchase decisions. He's the author of four books with the latest, the post COVID Marketing Machine, being a number one bestseller on Amazon guy is based in Atlanta, Georgia. Guy, welcome to the show.
Guy Powell 1:23
Hi, Jay. Great to be here and definitely look forward to talking about marketing effectiveness.
Jay Kingley 1:29
Thanks, Guy. And, you know, I'm really excited about our discussion today. As an engineer, or someone who was trained in the art of engineering, what was drilled into my head was the importance of getting the right data, analyzing that data, and drawing the appropriate conclusions, and letting the data talk to you keep your emotion and your biases out of it. And then, later on, I did a lot of consulting, particularly on the revenue generating side of the house, to large multinationals and large domestic Corporations, larger mid-market companies. And one of the things that always surprised me on the marketing side was how many how so many of these companies really evaluated their marketing based on intuition, their gut, their sense of how things were? And yes, they would sometimes put hard metrics around it. But when you looked at the hard metrics, I mean, it was data was numbers, but you, but so often, it failed the what I call the so what test? How does looking at these metrics guide my decision making, in terms of what marketing I should and shouldn't do along with all the different variables of that now, someone who has spent a big part of their career wrestling with this issue? I gotta ask you guy, what is so hard about taking a data-driven, analytical approach to measuring market effectiveness? And why do so many companies including our best and brightest continue to struggle with this area?
Guy Powell 3:13
Yeah, there's definitely and you touched on a couple of those points, large, many companies, larger brands, smaller ones, data is is is a challenge and getting data in the right way in the right format without any holes is a big challenge. And then getting it in the time that a marketer needs that marketers are responsible for selling, I mean, in most of the cases, they are the primary driver of the top line of the business, and for them to make good decisions, they need data, they need it now, and they need to complete and then they need it, you know, properly analyzed using the right techniques and things like that. And it's usually around the data that a lot of them fail, and then they seem to take a shortcut. And you know, and then do that, like you're saying is make a decision based on gut feel.
Jay Kingley 4:07
You know, let me take the poor marketers side in this argument. Yeah, guy, I appreciate what you're saying. But the truth of the matter is, so much of what we do isn't really measurable in any kind of a detailed sense. So that there are some things which are qualitative, which you do have to use experience and, you know, even expertise in order to make a subjective judgment. And, you know, how do you respond to that counter-argument?
Guy Powell 4:41
My response is basically a story. And I was sitting with the CMO of an airline in Southeast Asia. And he said, he said to me, Guy, I don't think you can measure the marketing effectiveness of an airline. And I thought about it for a couple of seconds and whether I should take a, you know, kind of a hard line or a soft line. And I said I'm gonna go for it. And I threw my wallet down on the table, and it thumped and I thumped it on purpose. And, and I said, I bet you that everything that you do in marketing can be measured. And he, you know, kind of jumped back, pushed his chair against the wall. And he, I let them sit there for a little bit. And, and then after he kind of stood, it was probably only a couple of seconds, even though to me it felt like it was maybe, you know, 10 or 20 seconds. And he and I finally let him off the hook. And I said I didn't tell you how much it's gonna cost. Because what's critical is, if you're going to use data and analytics to determine, you know, your effectiveness, there's always a cost involved. And, you know, there is no such thing as a free lunch. And then he realized that, and he realized that yes, he is going to have to invest some of his marketing budgets, in measurement and analytics and in data to be able to really make significantly better marketing decisions.
Jay Kingley 6:11
The Guy, I guess, the punchline to that story is he had to match the $5 that was in your wallet because you certainly won that one you know,
Thank you, Jay.
You're, you're a big spender. But then it really sets up what I think is a great segue way into the thing that I am wondering, which is alright, so this idea that marketing is the seat of the pants, it's about a particular individual's experience and got them a subjective sense of the world is clearly false. How do you think about the right way to measure the effectiveness of marketing?
Guy Powell 6:58
Yeah, we found that quite often recognizable brands do things wrong. And what is what seems to be missing is that they're not really looking at how a consumer makes a purchase decision. Now, in an ideal world, what you what a marketer would love them to do is to see your ad, go to the website, click on the button and buy it right there. But unfortunately, that isn't the way a consumer makes a decision, what a consumer typically needs to do is, first of all, they have to be aware. So what that means is I really need to look at each level in the purchase funnel and see how my marketing affects that full purchase behavior as that consumer moves to becoming aware to driving purchase intent to building consideration and then finally, going to the website or going into the store. And then actually plunking down that $5 in my wallet and buying that that that that product that they are that they're interested in. So it really is a kind of a strategic change in the way that they're thinking they need to stop thinking about just what causes a conversion, but they really need to think about that whole purchase funnel from awareness all the way down to purchase
Jay Kingley 8:18
If I'm hearing you correctly, it's about putting at the center of your universe, how it is that consumers are making that purchase decision, and then measuring how your marketing is working against that central objective. So are we talking about looking at different channels that reach customers? Are we talking about, you know, evaluating messaging, what part of marketing are you really looking at? To understand how you're being effective?
Guy Powell 8:54
Yeah, it's everything Jay. And you're absolutely right about, you know, putting that consumer, the view of that consumer right in, right in the center of your thinking, you know, it's not just about one marketing channel, whether that's online, it's looking at all channels, it's looking at all different creative concepts, it's looking at the combination of marketing and media with pricing. So one thing that's kind of going on now, is that you know, there are a lot of supply issues, you know, there's a lot of ships that are stuck trying to get their, their goods unloaded in LA. And so if I'm a, if I'm a manufacturer, and I don't have enough product to sell, then you know, I can either stop advertising, or I could potentially advertise even more, but make up for that with higher prices, so that the demand which might be reduced is matched up with what they're able to supply. And with that, then be able to nevertheless be able to generate more revenue, more profit and then potentially grow the brand at the same time. So it's really understanding all the levers that a marketer has its product, price, place, and promotion, in addition to really putting right at the focus right at the, you know, that core of your efforts as to how that consumer is making their purchase decisions.
Jay Kingley 10:13
And Guy without wanting to get into too much technical detail, you've really described a multidimensional array of variables in data, some of they're going to be correlated in various ways against each other, it sort of has a flavor for me, that on the analytical side, we're not just talking a simple Excel spreadsheet that a junior analyst builds to figure this all out, what are some of the techniques that you need to deploy to effectively tease out cause and effect and understand the impact that all these different marketing variables have?
Guy Powell 10:56
Yeah, exactly, Jay, it is, it's really critical. And we've noticed that as well, with a, you know, a lot of clients, you really do need to think about what those analytic methods are. And, you know, that could be machine learning, it could be artificial intelligence, whatever they are. But what the best clients seem to be doing, though, is really matching those analytics with really good, solid, timely, timely data,
Jay Kingley 11:25
Making this shift along the lines that you're saying, is got to and I think this will resonate with you, as somebody who's a numbers guy and analytics guy is got to drive business results. So as companies have you, as you've seen, companies make this switch in their thinking, and how they look at the effectiveness of marketing, what's happening to the key drivers of the business as a result,
Guy Powell 11:53
Well, if it's not driving the brand, if it's not driving sales, then you know, then marketing is somehow doing something wrong. And so one of the things that we've seen is, if you can really do a good job with your analytics, even with a, you know, a company in the, you know, 5 billion, maybe 7 billion range per year, over the, we've done some work where we've actually generated about a billion dollars in incremental sales for them, and done that at a very good profit. So it really does pay off and, and that investment, in time, money and analytics, and data can really, really have a big ROI, we kind of call that the ROI of ROI. So if the ROI and the metrics aren't paying off, and it doesn't have an ROI, then, you know, then you have to work to make sure that that it does.
Jay Kingley 12:50
We all know the old saying that you make decisions emotionally, and you justify it with the numbers, let me explore a bit, you know, let's say you're a CMO, we've got a lot on the line, talk to me about emotionally emotional issues that that marketing executive is feeling and how does having a more quantitative, focused approach around measuring the effectiveness of what you're doing? How's that gonna make my life better?
Guy Powell 13:20
Yeah, absolutely. And, you know, the CMOS job is absolutely on the line. And this is especially true for, you know, recognizable brands, large brands that you'd see on, you know, advertised on TV, it is typically the CMO that is totally responsible for driving the top line, if he fails, then the company fails. And so when they're sitting around, you know, the boardroom or they're sitting around the executive table, and the other members of the C suite are complaining about sales, they all look to that, that CMO and his butt is on the line. And if he fails, everybody else at that table fails, they all lose their bonuses. And so they are the first to look at that CMO. And, and as you know, Jay The, the tenure of the CMO is one of the shortest amongst all those people that are in the C suite. And so if he is not really driving revenue, then he's failing, and analytics and marketing, effectiveness and really understanding how marketing drives incremental sales. It's what is what it's all about for him. And if he can get that right, the bonuses for him are, you know, can be in the six figures, the options for him can be in the seven, you know, seven figures or higher, and he can really, really make a difference for the company. And in my opinion, he's the guy that that really drives the business and but you know, when you're the driver of the business, then you know, your butt is on the line and, and he's you know, if he's not doing it right, he's sweating bullets. And so with data and analytics, he can get it right,
Jay Kingley 15:00
And not just I think in the financial sense, but reputationally, the types of brands, you're talking about your success and failure, it as a CMO very public that you don't you want to you don't want to go out, and have you walk into a restaurant have everybody whispering, isn't that the guy that failed and got his butt kicked out of, you know, big company X?
Guy Powell 15:25
That is absolutely true. And, you know, and if they do lose that, and if they aren't doing what they need to, to, to make those numbers and you're right, they end up, you know, out on the street and getting the next job, if they lose, if they don't do it right as a lot more difficult. If they do it right, then they can write their ticket, they can, you know, they can move on one of our, you know, one of my friends, he was, he was CMO. And he absolutely did a great job, was able to achieve 25-35% growth every year. And he ended up more or less retiring, nice new house paid cash for a multimillion-dollar house. And he's now president of a new company. And that is kind of the good side. And the bad side is, you know when you go to a restaurant, you don't want people kind of talking about you there and say that was the guy that didn't quite make it.
Jay Kingley 16:16
All those articles that people love to write, you know, in LinkedIn and medium, you know, here's the top 10, marketing failures, and how to appear in print and memorialize forever, on a list like that. Guy, incredibly, I think compelling arguments in order to have anyone responsible for marketing, really change their thinking and understand that you're not marketing, if you're not measuring the effectiveness, that old saying, you can't manage, which we don't measure, and managing the top line of any business is got to be job one. So if I'm not CMO, and I'm looking at you, as an expert in this space, and I'm saying, okay, Guy, what are the couple, three, four or five things that I need to do in order to get on the path that you're recommending?
Guy Powell 17:17
Yeah, what we've seen is, and what we recommend is, it's basically a four-step process. The first one is, is developing the business question and really understanding the nuance underneath that business question. And sometimes it has to be that there are trade-offs between what you'd really like to have versus the data that you have today, versus what you really like to have, and maybe get that data, you know, 12 months from now, that's step one. And really understanding that step two, then is data, data data. It's a four-letter word for a reason. And data is not free data cost money, getting it right is, is a problem, getting it complete, having it validated, and really matching that data, specifically to that business question is pretty critical. That was step two. Step three, then is, although it's not the easiest thing, you really, really need some good smart folks, and they're out there. And a lot, a lot of companies have good data scientists and data, analytics folks. And they can do the marketing, analytics using either machine learning today, or artificial intelligence, or some combination of all those things. But what we've found is that most of the effort of any of this work that gets put in and, and sometimes that's one of the fears that the CMO might have is that most of the work that you put in is on the data side. And then secondarily, of course, analytics is important. And the type of analytics is also important. But really, the bulk of the work is done on data, data data. The last step is then, you know, once you run these analytics, you know what good are they unless you can really get the insights out of them. And that's then where, you know, kind of the business analyst, the business consultant can support that analysts to make sure that the CMO, his business question is being answered specifically with the data that they have using the right kind of analytics to be able to say, you know, go right, not go left or go straight, or you know, spend more, spend less. And so those are the four steps business question data, analytics, and then insights and recommendations that come out of it.
Jay Kingley 19:38
You've given us a real wake-up call to change our approach to marketing. And I think I can speak on behalf of our audience. A welcome, wake-up call, but we're going to take a quick break. And when we come back, we're going to learn a bit more about Guy.
Centricity Introduction 20:01
Wondering how much longer you have to grind and chase after every conversation and client? Would you like clients to knock on your door so you no longer have to pitch follow-up and spam decision-makers. While centricity is that tipping point program uses a proven five step process that will help you get in front of the decision-makers you need by spending less time on doing all of the things you hate. It's not cold calling cold email, cold outreach on LinkedIn or any other social media platform, or spending money on ads. But it has a 35 times higher ROI than any of those things, leveraging your expertise and insights that your prospects and network value. The best part, even though you'll see results in 90 days, you get to work with the Centricity team for an entire year to make sure you have all the pieces in place and working. So you can start having freedom of time and a life outside of your business. So email time@Centricityb2b.com to schedule an 18 minute call to learn more.
Jay Kingley 21:00
Welcome back, let's take this opportunity to learn a bit more about Guy, let me get started by asking you, what are the pain points that you typically solve? And obviously, in addition to some of the things that you mentioned earlier for your target market? And why is it that they struggled to do that themselves and need to reach out to a company like yours?
Guy Powell 21:28
Yeah, I think there are three things, one of them is they don't have the capacity. One of the problems with marketing analytics is that you do it maybe once a quarter, maybe once a half year. And in the meantime, then what are those analysts do, and this is a very specific skill that they need. And so they may not have the skills on board, or even if they have the skills onboard, then during the interim, when the modeling is not being done, then that analyst is bored. And so it has to do kind of with matching the skills that are available with the skills that you have. And then secondly, it's also the capacity that you might have, you might want to be able to do it, you might have the skills to be able to do it. But you don't have the capacity or the time because there are just so many other priorities. And you know, so when that in that sense, then we help to augment your staff so that these kinds of projects can get done. The last one, though, is I think one of the big ones is, is understanding and having done enough of these projects, to really understand how you go through those four steps that we just talked about data. You know, as a four-letter word, I keep saying that for a reason. And we have developed a specific data framework that really helps to make sure that all the data is collected, and it's collected on time, and vetted and validated. And the last thing is, we don't give up easily. Just as a quick story, we're working with a furniture company. And I would say that over the first five weeks of the project, I said, Boy, it would be really great if we had this data. And so we just don't have it can't find that we don't have that. And then you know, as as you know, just kind of as the outsider, which kind of tests the assumptions of the insiders is that say, you know, it'd be really good if we had that in the next week point, it'd be really good if we had that, you know, what kind of data would be good to be really good if we had this particular data? Well, in this particular case, with this furniture company, after five weeks, they said, I think we found it, and they actually had the data. And there was complete, and it was good data. And so, you know, it does have to do with that data and getting that data and then and getting it so that you can really and truly be able to answer the business question, which is what the CMO needs. And the CMO is not asking for it for his own personal gratification. He's doing it because his butt is on the line, the C suite is looking at him and saying, where's my revenue, and he's got to be able to deliver. And so then if you can figure out that, you know, and figure out how to get that data, then then you're going to really be able to help that CMO, defend those against those arrows, and really grow the business.
Jay Kingley 24:17
One of the things guy and in particular word that I heard you use time and again, is the word skill, and doing what it is that you do require considerable skill and expertise. Now, when you're on the client-side, one of your big concerns, if I bring in a third party is how do I know that I'm getting a firm that has that skill that has the expertise that has that mindset is going to get us through the journey that you talked about. So they think in your case, a very critical question to you is what makes you and ProRelevant, really great at what you do? Because ultimately, that is what I am looking to hire as a CMO.
Guy Powell 25:07
Yeah, and there are three dimensions to your question. The first is, having done it before, and, and really knowing how to how to ask those questions. And then just being tenacious, like I said, on with this furniture company, on on the data, and really getting that right. The second thing is, we have a world-class analytics team and, and that, what that means is that when you're applying the machine learning in the artificial intelligence, you're not going to get these kinds of weird answers, you're going to get really well-vetted analytics answers. And so one of my partner's just to, you know, kind of give you a feeling he's on the UN Big Data commission, he is one of the guys that define stuff for the United Nations. Now, the last piece, though, is it doesn't do any good. And this was the fourth step in my process, it doesn't do you any good. If you get all this analytics, and you got a great model. And you can, you know, you can give out all these things, unless they can be operationalized. And that's kind of where our consulting, expertise, the fact that we've done this, you know, hundreds of times, and we really understand that there are challenges in getting certain things done. And it's up to us to help you the CMO to figure out how to actually implement these, these insights so that you can really, really drive the business forward,
Jay Kingley 26:33
I encourage everybody to go to LinkedIn, look up Guy's profile, and you'll see a very impressive if you will resume of guy your career. But what interests me perhaps even more, is not always what someone's done, but why they've done it. So what has happened in your personal life in your professional career, that you would look back on and say, the reason I'm doing what I'm doing today, with pro relevant really goes back to these things that happened in my past, what would those be for you?
Guy Powell 27:11
Yeah, thank you, Jay. You know, that's where I was a CMO. And, yes, my butt was on the line. And when the sales guys couldn't make their numbers, you know, they'd come to me and say, How come you're not generating leads? For me? Why isn't the Why aren't the phone's ringing off the hook? And, and so one time, I, you know, I was saying, Well, why don't we just see if I can get more money in my budget, and see what happens. So I go to the CEO, and he says, I said, hey, listen, I want to get, you know, I want to increase my budget by a handful of million dollars. And he says, Guy, why would I ever invest more in marketing when I can get more money out of sales? And that question, right, there really stabbed me in the heart, I'll tell you, and I go down, you know, four-letter word, you know, how am I going to answer that question? So, you know, I put on my consulting hat. And then I started to change how marketing was accounting for its actions, how marketing was measuring its actions, and then how marketing was in tying sales to them. And it took me about six months. But that then led me to really be able to answer that question, why should I invest a million dollars in you Guy when I can invest it somewhere else? And I said, well, here's why. And then, and that led me to write my first book Return on Marketing Investment that led to my second book, my third book, my fourth, and then now my fifth. But it was that one thing that really just stabbed me in the heart, and I thought, oh, man, I got to figure this out. So that was it.
Jay Kingley 28:48
This from my perspective is the start of a great conversation. And I know Guy, there are plenty of folks in our audience that would like to continue that discussion with you, what is the best way for them to reach out to you?
Guy Powell 29:04
Absolutely. You can go to my website at prorelevant.com You can email me at firstname.lastname@example.org. Either one of those and I'll be looking forward to talking with you and seeing how we can help you to move forward in your quest to really drive revenue from marketing.