CRM plus MRM equals a better view of marketing performance
Papinder Kailesh outlines the importance for marketing managers to leverage both customer relationship management and marketing resources management.
Marketing managers must understand that customer relationship management (CRM) isn’t the only tool available to measure customer engagement. CRM is a powerful tool. However, it’s important that marketers recognise the growth of marketing automation and the other tools available rather than relying purely on CRM alone.
The traditional ‘general ledger’ approach to tracking business units’ financial results arranges these results along the lines of a formal organisational hierarchy. But marketers make spending decisions and forecasts based on the results of specific programs, campaigns, and activities. Generally, these markers bear little relationship to the accounts usually used by most corporate financial planners.
For an in-depth overview of all marketing activities, determining how cost effective and efficient they are, businesses should be looking at the information produced by their marketing resources management (MRM) systems as well. The lifeblood of campaign execution, MRM is a set of processes and capabilities designed to enhance a company’s ability to orchestrate and optimise internal and external resources providing better visibility into marketing execution and marketing effectiveness. CRM systems can offer businesses solid customer-based metrics, however, when combined with the attributes available from an MRM system, marketers can gain a much broader view of marketing campaigns and their effectiveness.
There are three major components in an effective marketing operation: productivity; improving spend effectiveness; and reducing marketing costs. Reducing costs should not be conflated with improving the outcomes of marketing spend, even though one will usually affect the other to some degree. These factors are essential to the success of a marketing project.
In many cases, it is difficult to pin down just how well these three major components are performing while using CRM data. Using the traditional metrics, organisations can certainly gain some understanding on their return on investment (ROI) simply by looking at customer activity following the main engagement points of a marketing campaign.
However, if organisations take the metadata from their MRM systems, which keep track of the operational activities, and feed it into business intelligence tools, they can use it to work out return on marketing investment (ROMI), which takes much more into consideration than just the customer response.
It’s no secret that, in this digital age, calculating ROMI has become increasingly challenging. This is because campaign costs and earnings consist of numerous metrics from each and every touch point between an organisation and its customers or prospects. From social media interactions to online advertisements and offline channels, it can be a challenge to make sense of it all.
To compound the issue, there is sometimes lack of a clear and consistent definition of what ROMI really is. It should not to be confused with basic campaign metrics, such as open rates and click-throughs. Likewise, software tools that are used to measure ROMI should not be confused with marketing automation applications that include reporting functionality around campaign ROI, which is not necessarily the same as marketing ROI.
If an organisation has a spend management module plugged into an MRM platform, for example, a marketing department can get visibility into marketing spend in real-time and view budgets in real-time. This helps reduce operational bottlenecks, and improve marketing activities’ productivity and cost-effectiveness.
With this kind of operational insight, companies can see where their spending in various campaigns are in real-time, and can see immediately whether they’re over – or under – budget. That visibility lets organisations change their spending immediately to be more effective at that moment in time whether that means reducing or increasing spend or even transferring budgets to another department. This is something that simply would not be possible with CRM data alone.
Programmatic buying is another trend picking up momentum in the marketing world. It is essentially automated advertisement buying. Companies can book a variety of media, predominantly digital, using automated systems, programmatic buying is pushing businesses to bring media buying in-house. Over time this will add another level of complexity to marketing department as it needs a specific skills set.
If MRM systems are already in place, programmatic buying will be easier to handle considering marketing departments will already have an end-to-end workflow management in place. With an MRM platform in place and its data being actively analysed, marketers can make active, real-time changes to their campaign strategies as they unfold. As such, it’s a valuable combination of tools to maximise the return on marketing spend. CRM is a common tool which majority of marketers are utilising. MRM, however, isn’t understood by marketers as well but its usefulness shouldn’t be underestimated. Using CRM combined with MRM provides marketers with a competitive edge by giving them even more insight into customers and the success of campaigns.
Papinder Kailesh is a business consultant at Teradata Marketing Applications.