It’s the perpetual marketing question: “How do we know what we’re doing makes a difference?”  And it’s a question that’s only answered by the most ambigious phrase known to man …

“It depends.”

The inability to quantitatively answer the question and all it’s related derivations (e.g. “How do we know it will work?  What is going to work best? etc.) is the underlying cause for the continuous contraction and expansion of in-house marketing departments.  It’s also the driving force behind job changes for marketing people (average tenure is less than two years), the tendency for clients to look for new agencies every three years and the high dissatisfaction level with “Chief Marketing Officers” at major brands.

We live and work in an industry that is, by its very nature, creative and changing with the times.  As a result, it’s extremely hard to quantify.

And things that are hard to quantify are hard to measure.

But now, in the Internet age, where we can get “granular” with “metrics” and buzzwords (obviously) abound, there are some hard and fast rules about measuring performance that marketing professionals should follow.  The great thing is that these simple rules do not require marketing research departments, trade association memberships, sophisticated studies of consumer panels or even the knowledge of how to add Google Analytics code to your web site.

These rules are intended for any-sized business.  They should provide perspective on the business ethic of setting goals and measuring performance.  And they should be easy enough to implement right after you read this post:

Rule #1 – The client defines success.
This is probably the most difficult thing for those on the client-side of the relationship to understand.  But if the client owns the business and the challenges it faces, the client also owns the resolution of those problems … and that’s the definition of success. 

It’s important for the client to define – in quantifiable terms – where it would like to be and to challenge his team (whether in-house, outside or both) to find the best solution given the budget available and the time allowed. 

Be prepared for questions, though.  As soon as you start putting measurable objectives in place, marketing people like to know more.  “We want sales to go up 15%” is likely to be followed with a “Which products have the best growth potential?”  This kind of give-and-take is healthy and can be productive in its own right.

Once the client has defined “success”; the stage has been set and the productive work can commence.

Rule #2 – Understand the communications process that supports your marketing effort.
One of the great frustrations clients experience is acheiving a stated advertising or marketing goal and then not seeing the anticipated result on the bottom line.  How can you generate awareness and get the attention of a customer and then not make a sale?

It usually happens when clients (and their marketing team) don’t fully understand the relationship between their communication and the sales process.  There’s only one real cure for this problem: spend time making sales.

If that means shadowing a field sales rep for a while, invest the time to understand the myriad of minor challenges he or she has to overcome just to make the presentation to a client or new business prospect.  If you’re in a consumer-facing business, spend time on the front line, customer service desk or sales floor.  The insights gained from a day or two of one-on-one, customer interactions can change a marketer’s entire perspective on creative, messaging and the use of media.

More importantly, it helps re-set expectations for advertising, PR and other marketing strategies and their relative importance in achieving “success” in the eyes of the client.

Rule #3 – Identify key influences on the process.
As a client, you can only control so much of the information delivered to the customer about your product and/or brand.  Setting marketing objectives in an environment that doesn’t recognize the role or impact of outside influences is dangerous (and possibly career-ending).  More than one marketing director has been brought down because of a “blind spot” (either intentional or not) to the competition.

And while clients need to keep their eyes open to possible outside influences from competitors and peers, their agencies and marketing counselors need to keep their minds open to alternative media and marketing opportunities that may be “the next big thing” and capture the imagination of consumers.  National and international influences (whether they’re natural disasters or man-made problems) can also impact a marketing effort (who would have built in “Cash for Clunkers” into their marketing plan eighteen months ago?).

Rule #4 – Understand that things change.
Consider it job security for marketing people – but the world is a dynamic and changing place, and when you’re in the business of shaping opinions and riding the wave of pop culture, nothing stays the same for long.

As a result, the client’s definition of success this year is bound to change next year.  Not only does the client’s own success (or failure) change their perspective on what’s achievable but all those outside influences we’ve discussed also weigh differently on a brand from moment to moment. 

Understanding and accepting this change means that clients need to be “okay” with not hitting 100% of the desired outcomes 100% of the time.  In fact, some desired outcomes might be very un-desirable by the end of the year.  By the same token, some outcomes that might have been considered “stretches” may have become very attainable over the year.

As a result, successes and failures need to be evaluated in context.  Results should be booked and then used as a baseline for the next year.

Rule #5 – Take time out to look, learn and re-load.
Contextual evaluation of results is critical to on-going success in the marketing arena.  It’s one thing to list off a set of objective achievements or failure, it’s entirely different to really understand what those successes or failures might mean in the bigger picture.

We break this process down into three pieces: Look.  Learn.  Re-Load.

Look at the numbers and make sure you’ve measured and tracked all the critical pieces of data you need in order to complete a comprehensive (and meaningful) review.

Next, learn from your analysis of the data.  Turn all those bits and bytes of data into information by understanding where things sit in the larger landscape.

Finally, re-load your goals for the next year.  Keeping some of the goals the same (or, at least, on the same scale) is helpful because it provides a helpful year-to-year measurement.  Other goals, though, may need to be scrapped entirely or invented from scratch.  Don’t be afraid to do either.

Hopefully, these five simple rules will help you develop a new perspective on how you build and implement your marketing communications programs.  These same simple rules (with a few tweaks) also serve as a great foundation for evaluating your communications efforts aimed at employees or your peers in the industry.

Just remember the golden rule:  “The guy with the gold makes all the rules” – and if the guy with the gold can’t figure out how well you’ve done, he’ll rule you out.

One of the great things about online marketing is the ability to breakdown results to the most “granular” level.  It sounds great – but the biggest problem with all of the great measurement technology is that most marketers are still operating with a pre-online marketing set of expectations.  As a result, the assumptions they make about the impact their online marketing program will have can be way off.

Gary Stein, writing for ClickZ, outlined the five biggest mistakes people make when it comes to their social media campaigns.  I’ll summarize them here, but strongly recommend you read the whole article.

Gary points out that success in the world of social media requires more than just showing up.  The assumptions they bring into the new media marketplace can lead to some disappointing (and sometimes non-existant) results.  Gary’s list of big mistakes:

1. Don’t assume your fans/followers will see a post.  An occassional post from you will get lost in the wash of other tweets, status updates, notes, shared content and more.
2. Be careful not to double-count people as fans or followers.  Some of the folks who follow you on Twitter may also be a connected to you via LinkedIn.  But they’re still just one person – don’t count them as two.
3. Driving traffic to your site via Twitter, Facebook, et al requires more than just dropping in links on your updates … COUNT THE CLICKS!
4. Pay attention to how your brand comes up in search on social networks.  Tools like SocialSeek are very helpful when it comes to doing this.
5. Don’t get caught up in how many followers or fans you have – focus on the folks who engage with your brand.

Gary sums it up this way:

The bottom line with social media measurement: we’re in some really early stages and there are plenty of bright lights to distract us. The biggest mistake of all, of course, is not to measure. With the effort you’re putting into social media, it’s like that famous bumper sticker: “If you’re not concerned, you’re not paying attention.”

Check out the entire article here.