The Mastery of Marketing Performance Management

Managing marketing performance is anything but simple. It requires establishing a unified approach to assess the outcomes of initiatives and projects and compare results with investments in marketing people and campaigns. In general, while performance management has been conducted effectively at the corporate levels, it has been a challenge for most lines of business, marketing departments included.

Almost 15 years ago, our firm introduced PerformanceCycle, a framework that enables businesses not only to measure performance but to manage it across the organization and within departments. This approach continues to help organizations think through what it means to manage performance and how to do it. PerformanceCycle is a three-step process of understanding, optimizing and aligning performance to specific goals and objectives. We find that many organizations do well at understanding performance, usually through use of analytics represented in dashboards and reports, but struggle with the two steps that follow. It is possible to utilize planning processes to optimize performance to specific goals and objectives, but doing it effectively requires capable software rather than desktop spreadsheets and presentations that are not integrated into the enterprise.

For marketing organizations, the focus has been on managing budgets and people through projects and in many cases campaigns to achieve specific goals that are aligned to basic expectations of particular groups, such as demand generation based on the number of leads or in social media based on the number of impressions. These steps are necessary but not sufficient. Managing marketing resources is only part of what is needed for effective performance management. As well as tracking people and tasks, managers should monitor activities, their results and the progress they represent toward goals, not the least of which is revenue augmentation. Viewed this way, marketing performance management is both a commitment and a process that goes well beyond reaching goals that are not intrinsically linked to the outcomes expected of marketing by management. It also supports an initiative for continuous process improvement by using software that facilitates managing goals, plans and metrics.

In beginning a marketing performance management initiative that should inevitably be a continuous process, we recommend setting goals that clearly identify in functional terms what marketing must achieve, establishing context by comparing the goals to the existing situation. As part of this planning process, take time to understand the roles and activities that will be involved, establish for each of them ways to measure their efforts, and provide flexible software that is accessible to everyone in marketing. Educate yourself about executives’ view of marketing performance, which typically is framed in terms of its cost and thus its cost effectiveness as applied to achieving targeted outcomes.

Be sure to examine whether to include aspects such as the relation of marketing performance to corporate objectives, sales efforts and new product introductions. Also be aware of the impacts of marketing activities and outcomes on other departments. Ensure that the process being developed to manage marketing performance is visible to all stakeholders in marketing and in upper management. With their buy-in, develop a centralized common budget and plan for the entire marketing organization. Before launching the program, develop or acquire a methodology to manage spend vs. results and adjust iteratively.

Also plan to standardize and integrate activities and results data supplied by marketing systems and team members. Identify relevant data from sales systems to integrate with marketing data; for example, use data on closed deals to track results of lead-generation efforts. Understand that you will need to have analytics software to analyze and interpret data for decision-makers. Our benchmark research finds that up to 10 information sources can be important for building marketing analytics. These begin with data from internal marketing operations such as budgets, goals and objectives and external online marketing activities, but they also include enterprise sources such as finance, sales, HR, ERP and billing and perhaps data from partners who might be involved in marketing activities.

The next step is to select software designed to manage marketing performance. It should be able to automate and centralize management of initiatives, goals, projects, budgets, resources, plans and analytics. Be sure that it provides analytics that will yield performance management metrics and enable you to derive key performance indicators. Both historical and current plan metrics are critical for comparing actuals to budget. Key process and people-related indicators are essential to determine if marketing activities are on track to achieve performance goals.

The software also should have a common dashboard for marketing operations and management. Use it to devise a consistent approach for presenting metrics that represent spend used and value generated. Analytics also can generate metrics and indicators to help determine the value of investments and the contribution of marketing to enterprise revenue. Such a data-driven approach can improve decisions by providing facts and removing biases from the process. Note, however, that analytics must be useful to nonspecialists. In our marketing analytics research more than two-thirds (68%) of Untitledorganizations said it is very important to simplify marketing analytics and metrics. But for more advanced marketing departments applying predictive analytics has helped provide insight to potential future outcomes.

As I’ve said, measuring performance alone will not enable you to manage marketing performance. Having defined goals that cascade across marketing and metrics linked to them is critical to determine whether the organization is on path to reach the goals and whether resources and budgets are allocated effectively. Visualization capabilities in the software enable planners to see the allocation over future time periods and to compare actuals vs. budget in the marketing plan. This can’t be done using spreadsheets and presentations, which are not centralized or readily available and are not designed to manage marketing performance.

A managed approach to marketing performance management can save time and resources, both of which may be in short supply, according to our research. Lack of resources is both the most common process barrier (for 44%) and the most common technology barrier (for 55%) to making changes in marketing analytics. This approach also can provide the ongoing visibility into marketing performance that the organization needs. Almost one-fourth (23%) of organizations want to compare actuals vs. budget during meetings, and nearly as many (18%) want to do so within an hour or two after meetings, according to our research on next-generation business planning. However, organizations that rely on spreadsheets often find themselves stuck in a perpetual cycle of chasing data and performing mashups to develop the metrics required to manage marketing performance.

The ability to quantify results using ROI and vr_marketing_analytics_03_assessing_impacts_of_marketing_spendbenefits metrics enables marketing leaders to demonstrate the department’s value to the business. It is very important to more than half (54%) of organizations to assess impacts of marketing spend on their goals and objectives, and important to an additional two in five (39%). Almost two-thirds (64%) of research participants said that marketing’s contribution to the sales pipeline is a very important way to determine that impact.

Our research delineates the challenges for marketing departments in justifying their expenditures and demonstrating the business value of their activities. Adopting software that analyzes and tracks the relations between spending and revenue can help them make processes more transparent and prove their worth to executives. It also can help marketing teams focus on revenue generation as the goal of all their projects. Thus, in assessing applications with which to manage marketing performance, don’t settle for those that only help you execute demand and lead generation or track social media; search for dedicated software that can help you understand, optimize and align expenditures and activities to desired outcomes.

In all, marketing performance management enables organizations to make better-informed decisions on plans for future initiatives and campaigns. It can enable marketing to increase productivity, improve performance and take a more central role in the enterprise. It establishes a foundation to understand and plan for a positive impact from marketing and quantify the value it delivers to an organization. Excellence in marketing requires managing to expected outcomes. Proper use of data and analytics can enable you to reach the goals outlined in plans and provide visibility into the use of budgets and resources. Analytics can provide metrics and key indicators that help you manage performance daily, weekly and monthly. If you take these steps, your marketing department will be more agile and adaptive in achieving the outcomes expected from its efforts.


Mark Smith

CEO and Chief Research Officer

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Can We Trust Salesforce for Business in the Cloud?

I have been meaning to write about Salesforce since its Dreamforce 2015 conference. Salesforce provides a platform, tools and applications for business and IT who claims to be the ‘no software’ company which as you will read is exactly what happened on May 10th. Heck, Salesforce is making a lot of advances on its platform, its applications and even with Analytics and the Internet of Things. These changes are at the center of what at our analyst firm calls digital business innovation. Much of what it’s doing is very good, but now I am questioning whether the company’s foundation of business processes and technology platform has reached a point at which it can’t grow any further without impacting its own customers’ operations and success. That may be a harsh statement, but I think my reasoning will become clear as you read this perspective.Salesforce No Software

This is not my usual focus, but it comes from a customer-centric perspective since we have been a customer of Salesforce since 2012. You’ll find this is different from most of my analyst perspectives, which take the approach of a technology insider; after all, as an industry analyst in 2011 I was the top-rated enterprise software analyst (if you don’t mind a little self-promotion). In this case, however, I won’t go into the research and best practices that show what Salesforce needs to do to be an effective provider of CRM and other business tools that help companies succeed in serving their customers and delivering the best possible overall experience.

The stimulus for this piece was something that caught the whole industry’s attention: the all-day #NA14 outage on May 10, 2016. What is #NA14? Organizations that rent Salesforce applications that are housed and served from the #NA14 cluster of servers (one of 37 clusters around North America) know what it is. On that date it experienced what I believe was the largest-scale outage in Salesforce’s history and maybe ever in the industry based on number of companies and users. While other clusters also had some shorter outages at the same data centers, it was #NA14 that went out for the entire day. So impactful that the humor of having a t-shirt that those affected can purchase.

Survived #NA14You might say, it was just one day, so what is the big deal? Well, thousands of companies that have hundreds or thousands of users each were abruptly denied access to their applications for marketing, sales, customer service, messaging and to analytics and any custom applications and all their interactions with prospects and customers. This means everything was down, and for businesses that operate on Salesforce’s platform – like ours does – across marketing, sales, customer service, operations, customer engagement and even accounting, this was a major inconvenience. Much of the #NA14 fiasco has been documented and reported by Information Week and eWeek. As well as the outage, customers lost five hours of data (according to their Salesforce Trust website) and I can imagine at least millions of dollars in worker productivity and potential new sales. The customer interactions that could not occur had a direct impact on the customer experience that companies were trying to deliver, and you can bet those customers were not happy.

Making it even worse, Salesforce did not substantively communicate to customers and users while all business using Salesforce was at a complete standstill. The company did nothing to relieve the internal confusion and panicky communications within organizations that wanted to know what was going on.

Why this lack of communication? After a little investigation I found that the customer information Salesforce needed to communicate with its customers resides on the same servers that were offline and so was inaccessible to the Salesforce account and customer service teams! This means that Salesforce does not have a centralized customer information store that is a replica or master of the data stored on its server clusters around the world. How is this possible for a company of its size and reputation? A lack of investment in process and infrastructure that has led to a brittle foundation for its cloud computing empire must be at the root of the situation. Any organization that depends on customer relationships should have its customer information available even when key software is not operational and should know how to communicate to its customers across any channel, voice, text or email. My colleague Richard Snow outlined this in his guidance for 2016, and Salesforce should heed his advice and apply what he has written about the innovations it provides to its customers to its own business.  When I look at the information Salesforce has about our organization, I see that it does not have fields to tell them how they should communicate urgent notifications and by what channel. Would it be most useful to call, text or email? Here are some serious places for improvement.

Salesforce eventually got past its consistently uninformative responses on Twitter to check its site. CEO Marc Benioff personally replied to some people’s tweets like mine with this: “I am sorry for our service disruption on NA14, please email me at so we can call you @parkerharris.” It revealed that the company does not link Twitter handles to customers and store centrally. The Twitter mob launched a flood of obnoxious, sometimes hilarious memes on the situation, like pictured here, and very quickly it became too late for Salesforce to recover. I did email and tried to follow up with Marc but got no response, so that gesture on his part was worse than nothing. I got basic responses to direct messages on Twitter but nothing that improved my confidence or trust in Salesforce’s ability to resolve the situation.NA14 Squirrel

Something that was not mentioned at all during this service disruption and data loss is that Salesforce uses Oracle’s database technology under its platform. Salesforce stated on its Trust website, “The service disruption was caused by a database failure on the NA14 instance, which introduced a file integrity issue in the NA14 database.” Salesforce was careful not to mention Oracle in any communications, though it noted during the crisis communications that it was a database failure. It is known that Salesforce has built its own abstraction layer as part of its platform, along with its own query interface; maybe that is the root cause of the integrity issues that eventually led to the five hours of data loss. If Salesforce was not able to shift successfully to backup data centers, let alone ensure against a power failure to a data center itself, we wonder whether its data centers are configured properly for fail over and disaster recovery. As a side point it is well known that placing data centers in major metropolitan areas like Chicago and Washington, D.C., is not a best practice; Google, Facebook and others have selected locations in Oregon that are remote and geographically stable and have lower energy costs and less risk of failure for power or human mistakes.

During the crisis, individuals at several levels of management in the support and services team tried to salvage the situation, but since Salesforce could not provide real updates online about service restoration, companies were left with their employees who depend on Salesforce sitting around, and many turned to Twitter for laughter. Two days’ later customers received a formal apology letter from Keith Block, Salesforce’s vice chairman, president and COO, that stated that a power distribution failure in a data center forced the company to switch to a backup data center, but there was also a database failure that created file integrity issues that led to the disruption. The letter apologized for the poor quality of service and encouraged companies like ours to contact him or our account team or even file a support ticket, which showed some humility. But it did not mention the lost five hours of data that was acknowledged on its Trust website, so you would have to do your own investigation to determine whether you had data being entered during that time. And no reference in the email or direction communications to customers that “#NA14 instance continues to operate in a degraded state that can impact the reliability from a performance and scalability perspective, or that they are planning a four-hour shutdown on Sunday, May 15th to attempt to do what they have stated as “bring the NA14 instance back to full functionality”. I guess that customer communication on the operations of its applications and software is still not a priority for Salesforce and making customers go and check the website is what they believe is a great customer experience.

What would you do to make up for a #NA14 situation if this was your company? I probably would offer incentives for future services or even apology incentives in the form of gift cards for every user – something to show you care about the customer experience beyond an apology letter that does nothing to help individuals who are on performance plans for quotas to customer engagement interactions. And the email was followed up by another email inviting customers of #NA14 to a special executive team conference call to probably further apologize on the situation. If I was any customer of Salesforce, I would want to be listening to this phone call and communications from executives to determine what might happen to them. Let’s hope that the time since the #NA14 crash has placed a level of seriousness and reconciliation with Salesforce executives.

All of this comes back to the overall customer experience in subscribing to software from Salesforce. Salesforce has become difficult to work with for businesses, especially small and midsize ones. Our own business made three changes to our subscription over the last 9 months to upgrade and purchase more licenses – changes that it should be simple and straightforward to make. But if you have experienced the Salesforce Checkout, you know it is anything but pleasant to review quotes, contracts, orders, statements and invoices, and the billing and payment system is even worse. You cannot pay for your subscribed changes by credit card and ACH like you can with any other software as a service on the Internet from, say, Microsoft, Adobe or even SAP or the range of services that a business pays for in healthcare, insurance, contractors and online banking. Salesforce asks you to mail a check because it is more expensive for it to provide online payment. Really? This is the most inefficient way to conduct commerce and make payments. When we refused to pay by check, Salesforce collections generated a new invoice with ACH/Wire information that a customer can manually use; but I refused to waste my company time and I called collections who took my credit card number over the phone. The company at this point doesn’t have an online payment system managed by the customer as is standard in the industry.

Even worse, communications to customers come from what is called the collections department, which is an insulting word, as if you were a deadbeat; why not call this team Customer Payment? My experience in three incidents suggests this team needs training in effective customer communications to maintain a quality customer experience. Salesforce’s customer engagement approach for requesting and paying for software is ludicrous, and it comes from a company that markets itself as providing a “customer success platform empowering companies to connect with their customers in a whole new way” – that’s in the About Salesforce statement in its press releases and website, and it could not be further from the truth when it comes to the experience it actually provides to customers. All of this could be fixed by using subscription and recurring revenue software from Salesforce’s partners and ensure the focus is on the subscriber experience like its partner Zuora provides today, and as Richard Snow has pointed out.

Another nagging issue stands as the largest impediment for companies that try to gain access to the latest innovations from Salesforce. I mean its new user experience, Salesforce Lightning. It was announced to customers in 2014 and begun to be released in 2015, but it is still not widely used. I have learned that thousands of companies have yet to migrate to Lightning as organizations have determined it is not ready for prime time in large and small deployments. Our experience has been that it is slow and not responsive to quick changes in the layout of information you are viewing and for getting to previous functionality requires switching to the classic interface. Plus not all of the entire suite of functionality from Salesforce has been upgraded to support this user experience, including the Console, Contracts,, Forecasts, Orders and even Getting Started. Yes, that’s right: Salesforce is struggling to get its own new user experience software up and running on all of its own applications, but it insists that it will be pretty much complete by the end of 2016. While this would be a good first step, Salesforce also has yet to make Lightning compatible with Windows Touch, which is now the standard method for the tens of millions of professionals who got a new notebook in the last year to scroll up and down, engage with the application and gesture through information. Today if you try to touch your way through Salesforce, it just does not work like it was turned off or not enabled. My inquiry on the situation to Salesforce found that my assessment was indeed true.

As an analyst firm that covers business applications that relate to the customer experience, from marketing, sales, service and operations all the way to finance, we conclude that Salesforce is not adhering to best practices. Any organization that cannot get access to its customer information to communicate to them in the midst of a crisis because it does not have a centralized customer database is set up to fail. It is a fact that systems will fail, and an organization should be prepared to have centralized backup of all of its customer information. When it comes to communications, an organization should not rely on a condescending top-down approach that some believe is a superhero type effort but be sensitive to how it communicates with customers and be honest in the information within the communication. Salesforce should be sensitive to other communications it is sending out during sensitive times like #NA14. For example, on the day of the #NA14 crash, Salesforce cloud services sent me an email message saying that “simple configuration changes improve business outcomes.” On the following day an email from invited me to explore how to best utilize my subscription, and this message had been assembled by copying and pasting text with different fonts and sizes of type. How embarrassing. All of which says to me that spinning out communications designed to learn more about me and get me to spend more with Salesforce is more important than my experience with the situation on hand. I had to reach out to our account executive to inquire about the #NA14 crash, but the rep was not able to offer any enlightenment beyond checking the site. In addition we’ve received no communication from the analyst relations group who should be proactively in dialogue with those that recommend and research their company; sadly, that’s not surprising, as getting information or updates on Salesforce is nearly impossible unless you go and find it yourself at Dreamforce.

Salesforce TowerSalesforce is investing massively in new real estate for its office towers around the world, and the largest of all is the new headquarters in San Francisco. Being the tallest and reaching into the clouds is a heavily marketed message. I hope that Salesforce is not falling victim to what my colleague Robert Kugel calls the headquarters effect. Unfortunately the reality of a cloud infrastructure is that it still operates on Planet Earth, and Salesforce needs to pay significant attention to that. I have pointed out issues in Salesforce’s cloud computing approach – in its processes, technology and people – that make it more difficult to work with from my viewpoint than hundreds of other technology providers. To provide customer relationship management (CRM), which is the stock ticker (NYSE:CRM) of Salesforce, how the processes are instrumented and people are empowered and enabled to communicate is more important than the technology itself.

I hope Salesforce will assess its people, processes, information and technology to ensure it can deliver the great customer experience that it espouses as the main value in working with it. From our point of view, as Robert Kugel has written on Salesforce and midsize company opportunity, it is clear that depending too much on one provider may not be the best recipe for success. Even Salesforce is rumored to be shifting away from its own cloud computing environment for its Internet of Things (IoT) and will operate on Amazon Web Services (AWS). Our organization is reassessing whether Salesforce is the right provider to support our marketing, sales, service, operations and customer management for the future. In addition, over the coming months we as analysts will assess Salesforce’s advances in marketing, sales, service, analytics and platform and write about them to help you make your own decisions on whether to reassess or invest with Salesforce for your future in the cloud. It is a serious question whether this company can be trusted to effectively support the business success of its users and customers and whether it can rebuild confidence that it can respond to the critical situations that happen to any technology provider.

Is Salesforce able to communicate with and engage customers for the best possible experience? Can Salesforce listen to its customers and improve their product as I have pointed out? Will it improve its business communications to its customers? Time will tell what Salesforce does and how it will recover from #NA14 and prepare itself for the future and how it communicates its plans to mitigate the risk of similar failures in the future.


Mark Smith

CEO and Chief Research Officer