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Established 2009

Marketers: Increase Your Value by Shifting the Focus from Outputs to Outcomes

Whether you are a small business owner responsible for marketing, you are a marketing manager, or you are the VP of marketing at a Fortune 500 corporation, you are being held accountable every day for your decisions – by somebody. Small business owners answer to themselves, their partners and their families. Marketing managers answer to senior corporate management. And, VPs of marketing answer to the CEO, CMO or CFO.

As marketers, it is all too easy to get caught up in the fun side of what we do: thinking of new slogans, writing ads, launching new online campaigns, designing logos, and writing reports to show everybody what you are up to. At the same time, it can be easy to forget that ultimately our very existence in this position depends upon our doing the job in a way that makes a positive financial impact on the company.

At the very least, we need to be saving (or earning) the company more money than the company has to spend to keep us around. But, of course, if we want to stick around for a while, we really need to be hitting it out of the park on most days. Consistently. That means keeping our eyes on what’s important: business objectives and business financials.

A great way to figuratively splash some cold water on your face once in a while is to sit down with your CFO and have a chat. Or, if you are small business owner, review your P&L statement. These activities can force you to remind yourself that ultimately, behind the fluff, marketing is about helping your organization sell more stuff (or, for non-profits and government organizations: get more donations, save more trees, keep more local mouths fed, etc.) with the minimum possible capital outlay.

Sure, it’s also about those intangibles such as building brand awareness and creating community goodwill. But, even those activities need to serve the primary financial goal eventually.

As this informative Marketing Profs article puts it, you need to shift your focus from “measuring and communicating outputs to measuring and commuicating outcomes.” This is a subtle, but crucial, distinction. To help you conceptually untangle outputs from outcomes, here’s a sample list of each:

Output Statements –> Fine, but Insufficient. Examples:

  • Our funny new TV ad – of which were are extremely product – started airing last week and has already received hundreds of thousands of views.
  • 9 out of 10 of test respondents rate our Internet ads as “clickable” or “very clickable”
  • Our e-newsletter had a 23.2% open rate last month
  • Our online sales of the 20 oz. size of our product is twice as responsive to online coupon offers than are online sales for the 12 oz. size
  • We added 3 new telemarketers to our team last month, and they are showing a substantial amount of outbound call activity
  • All of the above are all very typical-sounding output-oriented statements.

    Outcome Statements –> Should Always be Your Goal. Examples:

  • Our new TV ad resulted in $24,000 in incremental sales last week. If this trend continues, we will break even on the TV ad investment after just 6.2 weeks of airing them; if we include the anticipated positive effects of residual lifetime sales and cross-sell effects, the breakeven will come even sooner.
  • Our new Internet ads have a 30% better click-through rate than do the previous ads, but our cost per conversion is up 10%. We are considering switching back to the old ads.
  • Our e-newsletter has generated an additional 20 sales inquiries this month, relative to last month. Given an historical e-newsletter conversion rate of 20%, we estimate 4 additional sales have been garnered due to the new format.
  • Based upon recent testing, we project that offering coupons for the 20 oz. product size (for limited intervals) will increase gross revenue for sales of that SKU by 25% and will increase profits for the same by 3%.
  • On average, our new telemarketers yield a 22% lower average conversion rate than do the members of our seasoned telemarketer team. However, one of the new telemarketers actually has a 7% better conversion rate than does the average member of our seasoned team. We recommend advanced training and possibly a promotion for her.
  • Do you detect a pattern of difference between the two set of statements?

    Switch your focus from outputs to outcomes as a way to stay tuned in with what really matters in marketing: your short and long-term impact on company financials.