The new MBO.   The term "management by objectives" was first popularized by Peter Drucker in his 1954 book 'The Practice of Management'.  Management by Objectives (MBO) is a process of defining objectives within an organization so that management and employees agree to the objectives and understand what they are in the organization.

What’s new is that marketing today has more metrics, better tracking and significantly great ability to measure than ever before.  A famous retailer once said that “Half of my advertising is working; I just don’t know what half”.  Fortunately, we have come a long ways since then and successful companies are focusing on MBO – Marketing Budget Optimization.

If you have more marketing dollars and more customers than you need or your competition has, you don’t need to worry about how hard your marketing is working.  Some could make a case that maybe General Motors should have figured out what was happening to their market before they filed bankruptcy.  Sadly, the writing was on the wall for GM for a number of years and they failed to take the actions necessary to improve their results.

Most companies are seeking different outcomes than GM and tools are available for every size company to optimize their marketing budget.  Here are a few steps you can take to make your marketing dollars work harder:

1)               Measure.  Set up systems to measure everything possible.  From Excel to QuickBooks to Google Analytics to enterprise level systems, most companies have financial and quantitative tools and are awash in data.  We recommend that companies build dashboards that summarize key metrics and seek to verify the correlation to sales and buyer behaviors. 

2)               Test continuously.  At the simplest level, you want to verify that the correlations you have observed in the past are meeting your expectations.  Call volume, PO’s, conversion rates, website traffic are all metrics that are part of the equation.  Challenge your thinking by breaking your marketing into test cells and/or segments.  If you are going to fail, you want to fail quickly and small.  Don’t bet the farm every time you or your CEO has an idea.  I can’t tell you how much resources have been wasted following the words “I had an idea while I was in the shower this morning…..”  The first test that should occur is creating a financial pro forma with all the assumptions expected to occur – response rate, return rate, ad cost. Etc.

3)               Balance.  Feed and care for your pipeline.  How often do you buy a product or service the first time you hear of it from a company you never heard of?  It would be great to go out everyday and land that big customer but in reality that sale is the outcome of a number of touches.  Build a marketing plan that is generating awareness and leads at one end of the sales funnel at the same time that you are closing sales at the other end.  In this internet age, too many companies are fixated on search advertising without any consideration to filling the pipeline at the other end. 

4)               Differentiate.  Success in the market is all about having a winning competitive strategy.  Lead with your advantages and build more.  Your point of difference and competitive advantage should be a theme that is consistent in your advertising, your branding, your sales process and your customer experience.  Knocking off the competitor is a common strategy that reminds us all that ongoing product development is a key strategy for long term success.

5)               Persistence:  Developing a path to customers is a discipline that required regular effort and nurturing - not too dissimilar from going to the gym.  You wouldn’t go to the gym a single time and expect to see results.  Prospecting for new customers, providing ongoing communications and increasing the amount of touches is an approach that will generate increasing result over time. 

Working smarter is the operative word here.  Better creative, positioning and messaging are part of the solution.  Ongoing analysis and evaluation is the discipline that will lead you to optimizing the impact of your marketing budget.  At Sick Consulting we work with clients to increase the impact of their marketing budgets as often their budgets are limited.  We would welcome an opportunity to help you to optimize your marketing budget.