The #1 question I am asked by clients and prospective clients alike has been “How can I measure the effectiveness of my Co-op (or MDF) program?” Interestingly, there are more answers to this question than there is space in this blog. However, in the interest of brevity, the short answer is below:
While that response is appropriate for most marketing related questions, my guess is that it didn’t completely satisfy your insatiable curiosity as to the answer.
So, here’s the longer response (you asked for it).
Each objective should have measurable goals. This becomes the basis for your program. As simple as it sounds, when I get asked the “Measurement” question, my response is another question: “what are your objectives for the program?” Interestingly, the response frequently is: “I don’t know.” While elementary, the appropriate follow-up comment is: “Then how do you know what ‘effectiveness’ is if you don’t know what your objective is?” If you treat your program simply as a cost of doing business, then that’s what you’ll get-a program that sucks money from your marketing budget without providing any realized marketing benefit.
Step One: Identify Objectives
So, as you probably guessed, the fi rst step in the process of measuring the effectiveness of your funding program is to defi ne your objectives. While this can include something as broad as “increase sales”, it can also include intangible objectives such as “Increase partner/retailer loyalty.” Either example has ways to measure the effectiveness against goals, albeit very different. The fi rst example would rely on a more quantitative approach of measuring sell-though, while the second example may include (at least in part) a more qualitative approach- such as a survey. Objectives may be either long-term (ongoing) or short-term to address certain market conditions.
Typical objectives for your co-op or MDF program may include one or more of the following:
» Increase sales overall
» Increase sales of specifi c products
» Increase partner share of voice
» Reinforce brand messaging
» Focus spending behind specifi c products, media, or events
» Increase utilization rates (overall, or from select channel partners, or from a select geography)
While these might be some of the more common objectives, there are many, many more. Each example is measurable, and you can choose more than one objective. Just be sure you have the strategies in place to attain each objective assigned to your program.
Step Two: Identify Goals
The second step is to identify goals for each objective and a basis for measuring progress. As you can see from simply reviewing the above list, each objective will require different metrics. While each objective will have a critical KPI (Key Performance Indicator), each strategy deployed to attain any one of the objectives will require associated metrics as well. So don’t expect to have this fleshed out on the back of a cocktail napkin after a brief 5 minute discussion at your local watering hole. Completing this step takes some consideration. Take my word for it.
Step Three: Set a Baseline
The third step is to determine the current baseline for each goal which will be used as your starting point. It’s often said, “If you don’t know where you are now, how will you know how to get where you’re going?” Truer words have never been spoken. By defi nition, all goals are measurable. So begin by identifying your starting point. ‘Nuff said.
Step Four: Set Up Reporting
The fourth step is to set up your reporting to identify trends over time. This will not only help you track progress, but it will help you understand the rate of change over time as your strategies evolve. It is worth repeating that you should track progress for individual strategies as well as tracking progress against each objective. It will be these tactics and strategies that you will be adjusting over time to accelerate the attainment of each objective. So, the whole effort is moot unless you track the individual strategies in your quest to deliver a more effective program.
While this sounds simple enough, apparently it isn’t and if you’re not doing this now, you’re not alone. The good news is that it’s not too late to start. I’ll explore in future blogs ways to assign and measure specific objectives.